Investor's guide

Everything you need to know to invest successfully in the stock market and grow your savings

Introduction

Investing in the stock market is a unique opportunity to grow your savings over the medium and long term. This guide aims to support you throughout your investment journey.

The 4 pillars of successful investing

  1. Define your goals: Retirement savings, real estate project, inheritance...
  2. Know your risk profile: Risk capacity and tolerance
  3. Diversify your investments: Don't put all your eggs in one basket
  4. Invest regularly: Benefit from dollar-cost averaging

The fundamentals of stock market investing

  • Diversification: Spread your savings across different assets to reduce risk
  • Investment horizon: Match your investments to your time horizon
  • Risk profile: Choose products that match your risk tolerance
  • Regularity: Invest regularly to benefit from averaging over time.

SA2IF provides with tools and advisors to support your investments.

Why invest in the stock market?

Stock market investing offers several advantages over traditional savings:

Higher potential returns

Over the long term, stocks have historically delivered higher returns than bonds or cash savings.

Portfolio diversification

The stock market allows investment across different sectors and regions to balance your portfolio.

Inflation protection

Equity investments generally offer better protection against inflation than fixed-income products.

Liquidity

Listed securities can be bought or sold quickly, providing high flexibility.

Performance comparison

Investment type Average annual return* Risk level
Stocks 7-10% High
Bonds 3-5% Medium
Savings accounts 1-3% Low

*Indicative long-term returns - Past performance is no guarantee of future results

Investment products

The BRVM offers a wide range of financial products enabling institutional and retail investors to position themselves on the regional market. It offers equities, bonds, ETFs and other instruments suited to different risk profiles and investment needs in West Africa.

Main investment products

Stocks

Ownership interests in a company, providing entitlement to dividends and voting rights.

  • High potential return
  • Risk of capital loss
  • Possible dividends

Bonds

Debt securities representing a loan issued by a company or government, with fixed or variable interest.

  • Predictable income
  • Moderate risk
  • Priority in case of liquidation

OPCVM

Collective investment schemes offering exposure to diversified portfolios.

  • Automatic diversification
  • Professional management
  • Choice based on risk profile

Derivatives

Financial instruments whose value depends on an underlying asset (stocks, indices, commodities...).

  • Significant leverage effect
  • Very high risk
  • For experienced investors only

How to choose your investments?

Questions to ask before investing

  • What is my investment horizon?
  • What is my risk tolerance?
  • Do I need liquidity in the short term?
  • What are my financial goals?

Investment strategies

Several strategies can be adopted depending on your investor profile and goals.

Main strategies

Passive investing

Long-term strategy aiming to replicate the performance of a stock market index.

  • Low fees
  • Automatic diversification
  • Less time required

Active investing

Seeking outperformance through stock picking or market timing.

  • Higher return potential
  • Requires more time and expertise
  • Generally higher fees

DCA (Dollar-Cost Averaging)

Regular investment of a fixed amount regardless of market conditions.

  • Averages the purchase price
  • Reduces timing risk
  • Investment discipline

SA2IF advice

For most investors, a diversified approach combining passive investing (core portfolio) with some active positions (satellite) offers the best risk-return balance.

Risk management

Investing in the stock market involves risks that are important to understand and control.

Main risks

Market risk

Market fluctuations that can lead to a drop in portfolio value.

Credit risk

Default by a bond issuer or company whose shares are held.

Liquidity risk

Difficulty selling an asset quickly without significant loss.

Political risk

Regulatory changes or political instability affecting markets.

Risk management techniques

Diversification

Spread your investments across different asset classes, sectors and geographic regions.

Asset allocation

Determine the optimal allocation between stocks, bonds and cash based on your profile.

Stop-loss

Place automatic sell orders in case of excessive decline.

Taxation of investments

Taxation of financial products is an important factor in your investment strategy.

Main taxes

Income type Tax rate Social charges
Capital gains on shares 20% 10%
Dividends 10% ((flat-rate option)) 17%
Bond interest Progressive tax scale 17%

Tax optimization

Standard securities account

Standard taxation with annual declaration of capital gains and income.

PEA (Equity Savings Plan)

Tax exemption after 5 years (subject to conditions). Social charges apply.

Important

Tax rules change frequently. We recommend regularly checking our tax section or contacting an SA2IF advisor for up-to-date information.

Conclusion

Investing in the stock market requires a methodical and disciplined approach. By following the principles outlined in this guide:

  • Clearly define your goals and investment horizon
  • Choose suitable products matching your risk profile
  • Diversify your investments to reduce risk
  • Invest regularly to benefit from averaging over time
  • Stay invested over the long term

SA2IF by your side

Our advisors are available to help you build and monitor your investment portfolio. Feel free to schedule a personalized review.

Book an appointment