going long
Going long means buying an asset because you believe its price will rise, so you profit by holding it and selling later at a higher price.
In plain English
There is a particular kind of aunty at the market in Mile 12 who buys three baskets of tomatoes in December, and not since she needs them, but because she knows Christmas and dry season will push the price up by January. She is not eating three baskets of tomatoes. She is holding them, waiting, betting on tomorrow's price. That, in its purest form, is going long.
In the stock market, going long means you buy shares because you believe the price will climb, and you plan to sell later at a profit. It is the opposite of betting against something. It is the ordinary, plain way most people invest, and most Nigerians who buy shares on the Nigerian Exchange through their stockbroker are going long, whether they use that phrase or not.
Say you buy shares of Dangote Cement because you believe the company will keep growing as construction booms across the country. You are not trying to be clever or fast. You buy, you hold, you wait for the value to rise, and someday you sell. That patience, that calm confidence in a company's future, is the whole spirit of going long.
Someone in London sending money home to invest in a Nigerian bank's shares is doing the same thing from a distance. They are long on Nigerian banking, betting that the sector will grow as more people open accounts and businesses borrow to expand. The distance does not change the logic, only the wire transfer fee.
Going long is not reckless. It simply means you have chosen a side, the side that believes in growth, and you are willing to wait for it to show up in the price.
You buy 500 shares of a Nigerian bank at ₦28 each, spending ₦14,000. Eighteen months later, the price rises to ₦45 per share, and you sell everything for ₦22,500, a profit of ₦8,500 for simply believing and waiting.
Questions people ask
Is going long the same as just buying shares?
Yes, in everyday investing, buying shares because you expect the price to rise is exactly what going long means. The term becomes more distinct in advanced trading, where people can also bet on prices falling, but for ordinary stock market investors, going long is simply buying and holding with hope for growth.
How long do you have to hold shares to count as going long?
There is no fixed rule. Some people hold for a few months, others for decades. What makes it going long is the direction of your bet, believing the price will rise, not the exact length of time you hold the shares.
What is the risk in going long?
The main risk is that the price falls instead of rising, and you either sell at a loss or hold on hoping it recovers. Unlike some short term trading strategies, your loss is generally limited to what you invested, since the share price cannot fall below zero.
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