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NewsDay

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The invisible stock exchange

Opinion & Analysis
In its simplest form, the stock exchange is like a continuous auction of company reputations. Buyers and sellers make competitive bids based on the perceived value and level of trust in the stock of various companies.

In its simplest form, the stock exchange is like a continuous auction of company reputations. Buyers and sellers make competitive bids based on the perceived value and level of trust in the stock of various companies.

Opinion: Thembe Khumalo

The Zimbabwe Stock Exchange (ZSE) website cautions us that stock market investments require “professional advice on stock exchange and portfolio management”, then provides the following steps for those wishing to invest:

  • Setting investment goals;
  • Identifying the risks and your risk appetite;
  • Identifying your constraints;
  • Choosing and making your investments
  • Opening a trading account with a stockbroker, registering with a Central Securities Depository and opening a custodial account.
  • Seeking advice from stockbrokers;
  • Educating yourself on the recommended ZSE investment products.
  • Monitoring your investment

(www.zse.co.zw)

If only we devoted this level of care and consideration when we play on the invisible stock exchange. Yes, there is an invisible stock exchange that we all participate in everyday.

It is the continuous auction of one another’s reputations and we trade in it all the time, sometimes intentionally, sometimes unintentionally. The stocks we trade include those of our friends and family members, those of complete strangers, public figures and even our own. Essentially the invisible stock exchange is where personal brands are built and bruised.

While stock exchanges on regulated financial markets all over the world impose stringent rules on traders and investors, the invisible stock exchange is a much more high-risk, unfettered space.

People can build and damage reputations with little evidence, and sometimes those who have invested are not even aware of what is happening to their investment. That makes building and managing personal brands rather tricky.

But what if we followed the simple guidelines provided by the ZSE, and applied those to our personal brands? What would that look like? There is so much we invest in building our reputations: the clothes we choose, the friends we associate with, the words we say — all of these choices can either add to or subtract from, the value for our reputational stock; our brand equity if you like.

So we would start, not by investing, but by setting out some investment goals. Where do we want to take this investment? How much do we want it to multiply?

Are we looking at a short- term investment, such as a promotion at work, or getting an invitation to the coolest party, or a long-term investment such as a career in politics or marrying the woman we have loved since high school? Is the amount we want to invest going to change the world, or just make a dent on our immediate family’s fortunes? The answers to these questions and others like it will determine how you go about investing, how much you invest and where.

It is also important to assess our risk appetite. Some people would say that entrepreneurs have a high appetite for risk. So if you prefer to play it safe, you know not to attempt to build your personal brand in the entrepreneurial space.

Doing so would create discomfort for you, and the essential congruence that others seek would be missing, making them less likely to support your brand.

Investments constraints in personal branding might look like this: Let’s say your investment goal is to become a highly-influential church leader. But you don’t have a Bible, live in a remote area without any churches, and have only ever heard someone preach a few times in your life. These are serious constraints in light of where the brand wants to go, and although the attainment of this goal would not be impossible, it may be very difficult indeed. You would then have to make some strategic decisions to change either your circumstances or the vision itself. Companies (particularly start-ups) do this all the time — they learn to pivot.

So with goals and strategic assessments and decisions made, one can finally begin to trade. This may involve taking on a public platform such as a leadership position in a group, or a more private effort, like enrolling in a university degree or adopting an exercise regimen.

The investments all depend on where you want to take the stock; and the level of pain involved might reflect the gap between where the brand is, and where you want it to go.

A start-up company that wants to be worth a billion dollars has a lot more work to do than a market leader looking to maintain its position.

I like to think of personal brands as having their own boards of directors, the same way companies do. This would be the equivalent of seeking advice from a stockbroker.

We all have people we rely on for advice about the important decisions in our lives. Sometimes the board has too many members for the size of the company. Sometimes the directors are too few or their viewpoints too similar.

An effective board has a diversity of skill sets and views, an appropriate number of members, and both executive and non-executive directors (internal and external in the case of a personal brand).

It is often the strength of the board which allows a company to weather difficult conditions, and the same is true of personal brands.

In fact, the board of directors can be highly-influential in the process of education yourself about investment.

Finally, the sound advice is that one should monitor one’s investment. This goes without saying in the case of a personal brand. An intentional effort to audit one’s brand every now and then, and taking appropriate strategic action can make a big difference in preserving brand equity.

So, are you ready to invest on the invisible stock exchange? You’re doing it already! And remember as you trade in other people’s reputations, that they may have invested as much effort into building their brands as you have in yours — don’t be the one to damage them.

Thembe Khumalo is a brand-builder, storyteller and social entrepreneur. Find out more on www.thembekhumalo.com or follow her social media accounts @thembekhumalo