I belong to an online discussion group where we talk about Investment opportunities in the capital market among others. One of the common questions that comes up almost at a predictable interval is usually “how can I invest in US stocks from Nigeria?” It’s a big challenge.
After my experience with the NSE (article here), I have inadvertently also developed an appetite for US securities as I believe the market is more efficient and if I do my homework, I can be abundantly rewarded. Hence, I wasn’t left out of the frequent question and continual search for how to invest in US security from Nigeria. Quicker than I had expected, the predictable interval question surfaced again and someone asked the same question except that this time, a member of the group now has a definite and precise answer to give, “check out Trove.”
Little did I nor anyone know that one Oluwatomi Solanke (CEO Trove Technologies) and his friends and many others who are now using Trove have been facing similar issues. Appetite for foreign stock on a micro level with no cure for the cravings.
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“Check out Trove” was the answer given by my group member and I chose to take a deep dive at understanding the architecture that enables Trove, the risk involved and opportunity that abound.
Architecture
Trove is the solution to the age-long problem of the typical retail investor. Trove allows you to start your investment journey with as low as N1,000 or $4, which is a low amount if you understand the workings of stockbroking.
Trove completes your KYC check within 48 working hours, after which you can make deposits in your Trove wallet that can then be used for investment in Stocks, ETFs, Bonds and more traded securities.
In Nigeria, Trove partners with Sigma Securities for its stockbroking activities and ARM as the investment manager for managed portfolios.
In the US, Tove is in partnership with DriveWealth, a technology firm providing the trading architecture for second parties who are interested in trading in the US Securities market from anywhere in the world.
DriveWelath CEO Robert Cortright said:
“Making U.S. securities available to investors of any size in countries all around the globe is an essential element of the mission of DriveWealth. We are delighted to work with Sigma Securities and Trove Technologies on this effort to democratize investing in Nigeria by bringing to its retail investors the largest and most liquid, transparent financial market.”
Risk Involved
For the question of “how safe is my money,” Trove has this to say:
We pride ourselves in the quality of strategic partners we work with. Nigerian assets bought on the Trove app are held by Sigma Securities Limited, a company registered with the Securities and Exchange Commission (SEC) and a dealing member of the Nigerian Stock Exchange.
US assets are held by Drivewealth, LLC a regulated member of FINRA/SIPC. Drivewealth is a member of SIPC, which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). We also work with Microfinance banks who are regulated by CBN.
Lastly, we use state-of-the-art data encryption when handling your financial information.
All in all, you are rest assured that your money and assets are super safe.
From Trove you can be sure your money is safe. But that’s not the only risk involved. The normal risk that accompanies any investment still lies on you to manage. You will need to perform your analysis and choose which security to buy/sell per time. Trove will not do that for you, at best, Trove is only providing you with a platform to buy securities of your interest.
Remember currency risk as well. While doing your analysis, remember to make room for this. USD/NGN has become a variable for consideration while analysing.
Opportunity that abound
Equity has historically been a way to grow wealth and it will continue to be. The opening up of securities in the US to retail investors in Nigeria presents a new way to grow wealth for the enterprising retail investor.
If you do your homework well, it might open you up to wealth and if not, you know what it means.
Visit Trove website today to know more.