Stacking for Strength: The Power of Building Volume in Stock Investing
Dear Investors. When we talk about succeeding in the stock market, we often focus on buying at the right time or finding the next “hot stock.” But one strategy that quietly builds solid, compounding wealth over time is this: Building Volume.
What Does “Building Volume” Mean?
In simple terms, building volume means increasing the number of shares you hold in a stock—especially those with strong fundamentals, growth prospects, or consistent dividend history. It’s about accumulating more units over time, not just buying once and hoping for magic.
Just as consistent savings grow your bank balance, consistent accumulation grows your shareholding, leading to greater returns through:
• Price Appreciation
• Dividend Earnings
• Bonus Shares or Rights
• Voting Power and Influence
Why Building Volume is a Smart Investor’s Secret Weapon
1. It Maximizes Compounding
Imagine this:
If a stock pays ₦2 per share in dividends, and you hold 1,000 shares, that’s ₦2,000.
But if you steadily build up to 10,000 shares, that’s ₦20,000 in dividends.
That dividend can be reinvested to buy even more shares—and so the cycle continues.
2. It Reduces the Impact of Market Fluctuations
When you build volume over time (especially through dollar-cost averaging), you don’t worry too much about the perfect price. You smooth out your entry price and spread your risk, especially in a volatile market.
3. It Boosts Your Return When the Stock Performs
Let’s say you bought 2,000 shares of a stock at ₦5.
Later, you buy another 3,000 at ₦8.
Eventually, the stock hits ₦15.
The more volume you have, the greater your capital gains when the stock rallies.
How to Build Volume Strategically
✅ 1. Choose Quality First
Volume without wisdom is risk. Focus on fundamentally sound companies with strong earnings, visionary leadership, good corporate governance, and consistent growth.
✅ 2. Set Volume Milestones
Decide your target per stock.
For example:
• Target 10,000 shares in Zenith Bank
• Target 5,000 in Transcorp
• Target 3,000 in Dangote Sugar
Set milestones monthly or quarterly and review regularly.
✅ 3. Reinvest Dividends
Don’t spend every dividend. Use it to buy more units, especially during dips. This habit alone can double your holding over time.
✅ 4. Buy More During Price Weakness
If the stock is fundamentally sound but the price is down, that’s your signal to accumulate more—not flee.
✅ 5. Track Your Cost and Growth
Keep a record of your average entry price and volume growth. Watching your average price reduce as you buy lower or hold over time can be encouraging and empowering.
Real-Life Example (Simplified):
Ade buys 1,000 shares of a company at ₦10 = ₦10,000
Every month, Ade buys another 1,000 units.
After 12 months:
• Volume = 13,000 shares
• Let’s say the price grows to ₦18
• Investment worth = ₦234,000
• If annual dividend is ₦1.50 per share = ₦19,500 dividend income
Just one year of disciplined volume-building has led to both capital appreciation and passive income.
Final Word:
Many investors focus on how high a stock can go—but smart investors also focus on how much of it they own.
Ownership matters. Volume gives you power. And volume, built wisely, is a quiet force that grows your wealth in multiples over time.
Closing Call-to-Action:
“In your stock investment journey, don’t just ask, ‘What’s the best stock to buy?’
Ask: ‘How can I build volume in the stocks I believe in?’
Let’s start a conversation. What stock have you quietly been building volume in—and what has that taught you about long-term investing?
Dear Investors. When we talk about succeeding in the stock market, we often focus on buying at the right time or finding the next “hot stock.” But one strategy that quietly builds solid, compounding wealth over time is this: Building Volume.
What Does “Building Volume” Mean?
In simple terms, building volume means increasing the number of shares you hold in a stock—especially those with strong fundamentals, growth prospects, or consistent dividend history. It’s about accumulating more units over time, not just buying once and hoping for magic.
Just as consistent savings grow your bank balance, consistent accumulation grows your shareholding, leading to greater returns through:
• Price Appreciation
• Dividend Earnings
• Bonus Shares or Rights
• Voting Power and Influence
Why Building Volume is a Smart Investor’s Secret Weapon
1. It Maximizes Compounding
Imagine this:
If a stock pays ₦2 per share in dividends, and you hold 1,000 shares, that’s ₦2,000.
But if you steadily build up to 10,000 shares, that’s ₦20,000 in dividends.
That dividend can be reinvested to buy even more shares—and so the cycle continues.
2. It Reduces the Impact of Market Fluctuations
When you build volume over time (especially through dollar-cost averaging), you don’t worry too much about the perfect price. You smooth out your entry price and spread your risk, especially in a volatile market.
3. It Boosts Your Return When the Stock Performs
Let’s say you bought 2,000 shares of a stock at ₦5.
Later, you buy another 3,000 at ₦8.
Eventually, the stock hits ₦15.
The more volume you have, the greater your capital gains when the stock rallies.
How to Build Volume Strategically
✅ 1. Choose Quality First
Volume without wisdom is risk. Focus on fundamentally sound companies with strong earnings, visionary leadership, good corporate governance, and consistent growth.
✅ 2. Set Volume Milestones
Decide your target per stock.
For example:
• Target 10,000 shares in Zenith Bank
• Target 5,000 in Transcorp
• Target 3,000 in Dangote Sugar
Set milestones monthly or quarterly and review regularly.
✅ 3. Reinvest Dividends
Don’t spend every dividend. Use it to buy more units, especially during dips. This habit alone can double your holding over time.
✅ 4. Buy More During Price Weakness
If the stock is fundamentally sound but the price is down, that’s your signal to accumulate more—not flee.
✅ 5. Track Your Cost and Growth
Keep a record of your average entry price and volume growth. Watching your average price reduce as you buy lower or hold over time can be encouraging and empowering.
Real-Life Example (Simplified):
Ade buys 1,000 shares of a company at ₦10 = ₦10,000
Every month, Ade buys another 1,000 units.
After 12 months:
• Volume = 13,000 shares
• Let’s say the price grows to ₦18
• Investment worth = ₦234,000
• If annual dividend is ₦1.50 per share = ₦19,500 dividend income
Just one year of disciplined volume-building has led to both capital appreciation and passive income.
Final Word:
Many investors focus on how high a stock can go—but smart investors also focus on how much of it they own.
Ownership matters. Volume gives you power. And volume, built wisely, is a quiet force that grows your wealth in multiples over time.
Closing Call-to-Action:
“In your stock investment journey, don’t just ask, ‘What’s the best stock to buy?’
Ask: ‘How can I build volume in the stocks I believe in?’
Let’s start a conversation. What stock have you quietly been building volume in—and what has that taught you about long-term investing?