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Investment Tips

How to invest in uncertain times

Financial planning is having a plan for your finances in a manner that protects your cash flow from dissipation and/or loss.



Nairametrics Financial literacy, invest intelligently, portfolio diversification, treasury bills, Your next of kin, or not?, Investing in uncertain times, Things to accomplish during COVID-19 lockdown

Financial planning, in simple terms, is having a plan for your finances in a manner that protects your cash flow from dissipation and/or loss.

Financial planning is a process; if you wanted a step by step guide on how to establish a financial plan, it would be: First, agree on a plan ⁠— what do you want to achieve? By when? Then, start an Emergency Fund, and settle your life insurance to protect your dependants from loss of your income. Only after you have done these can you start the journey of investing current income into available asset classes.

Investing in uncertain times

What should an investor do in these uncertain times of financial loss and meltdown in asset values?

Don’t panic

Look at your financial goals. Have they changed? If they have not, do not make any strategic financial decisions that will change your investment portfolio because of current uncertainties. If you have an RSA, or any investment fund set aside to invest money for the long term (more than 36months), then absolutely ignore the noise today and keep investing.

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Being worried is understandable in this time of global economic uncertainty, but do not simply dismiss your carefully prepared, long-term investment plan. If you own a good dividend-paying asset, be careful about selling because the price of that asset is falling. Selling an asset as prices fall is simply actualizing that loss, i.e., you move that loss from paper to reality.

[READ MORE: Between saving, investing, speculating, trading & gambling)

Review your budget

Remember, cash is king; it’s time to go over your budget and cut back on discretionary spending plans that drain cash away and reposition your budget for saving and only necessary spending. The coming months may see job losses and bulk buying of commodities, e.g., food. Prepare for this, keep non-essential capital investment down, and keep physical cash nearby. You can use your emergency fund and prepay for purchases, then simply replenish your fund later.

Tap into your emergency fund

Even with a plan, you still have to pay bills, so if you need cash to cover non-discretionary expenses, this is the time to tap into cash and near cash saved in your Emergency Fund. An Emergency Fund is where you save 3 to 6 months of your non-discretionary expenses, i.e., expenses you must make like food and rent. An emergency fund is an important part of any financial plan, as it stops you from selling down your assets at a lower price to meet expedient cash needs.

Keep paying your bills

If you have credit cards and loans from banks, make sure you are making the minimum payments to ensure your credit score does not take a hit. Yes, it’s tough, but a good credit score is very important, as you can get lower Annual Percentage Rates on new applications for loans.

Continue investing

As the market prices fall, keep investing if you already do so on a constant basis. If your employer matches your retirement contributions, then keep investing, don’t lose that benefit. The goal for you is to adopt a Naira Cost Averaging approach. Naira Cost Averaging is simply buying same amount of a share at regular intervals, no matter the price. the volatility in uncertain times means that as share prices fall, the investors are also able to buy shares at that lower costs, helping to reduce the average cost per share and positioning the portfolio for positive return.


Keep in mind that this strategy only works with shares, not fixed income instruments like bonds. 

Look for opportunities

Keep in mind that the market prices of many assets are indeed falling, but the values of these assets may not have fallen in same proportion.

For example, Zenith Bank Plc’s share prices have fallen by 46% over one year, but the PE is 3.87 with an implied divided yield of 23% (on N2.80 divided) higher than the double-digit Nigeria inflation rate of 12.2%. Look at the market prices falling as an opportunity to own quality stocks at a good bargain price.

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Another example? The S&P 500 has fallen 31% since February the 19th, the market is essentially pricing in a zero earning for most of the 2020 year; there are also headwinds with crude oil price war between Russia and Saudi Arabia, but does anyone believe the markets will remain at negative 30% for the coming 9 months? Is this a buying opportunity? What about China? Down 16% YTD, are Chinese stocks a discount today?

We have no way of predicting the future, but it’s better to acquire blue-chip, well-capitalized stocks, in a growing market segment like Alibaba, at a significant discount to her 52-week closing price.

investor, Steps to investing, Steps to developing a growth plan for your business, Breaking down the biggest misconceptions young people have about investing , Here’s how your business can grow revenue in tough conditions (PART 1), Here are ways to find the right investor for your business, How to build up your investment knowledge, This simple advice could help solve your investment challenges 

Pay down debt

Corporations also have cash needs. If you owe debt, significant debt, it may be a good exercise to call up your creditors and seek better terms on those loans. The enemy of bank lending is uncertainty, however, lack of bank credit in the system will create a cash crunch and most institutions will offer great terms if you were paying down your loans. 

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[READ ALSO: Is investing in commodities only for the brave?)

Position yourself

Start to prepare a list of possible assets you want to buy. What should be your criteria for buying risky variable return assets?

  • Companies in a sector producing essential goods and services.
  • Highly capitalized blue-chip stocks.
  • Price Earnings Ratio below 15.
  • Dividend yield offered well above the market average of 4.5%. Keep in mind inflation rate of 12.2%.
  • High volume traded, average 1m traded share volume in 90 days.

However, you can keep it simple by looking at buying the index that tracks the stock markets, e.g., for equities, the Global X MSCI Nigeria ETF (NGE) invests in the largest and most liquid companies listed on Nigeria Stock Exchange. To hedge, buy fixed income; I prefer bank Commercial Paper because it offers higher yields than Sovereign bonds, but watch the issuer.

Remember, investing is risky. You can lose 100% of your capital; always seek advise before investing.





  1. Ayomide Afolabi

    March 23, 2020 at 9:07 am

    How do i invest in apple or facebook stocks from Nigeria

    • Jessica

      April 18, 2020 at 7:26 pm

      There are some apps that can buy through. E.g Trove, Chaka, InvestBamboo.. I would advice you join the Money Africa Forum to know more.

  2. kanmi

    April 25, 2020 at 6:10 pm

    how do i join the Money Africa Forum

  3. kanmi

    April 25, 2020 at 6:11 pm

    how do i join the Money Africa Forum?

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Investment Tips

If you had $100,000 in cash, where would you invest it in US markets?

What an American investor would do if he had to invest $100,000.



America is a nation of options. Take water for example, you can buy bottled water, water with mineral salts, water without salts, carbonated water, fruit-flavored water, or even water that is infused with oxygen. This example holds true when it comes to investing.

You may walk into your financial adviser’s office with a clear idea of what you want to do. Let’s say you want to save for retirement, and then you are presented with options — do you want long-term investment options? Should you buy bonds? Okay… what kind of bond; interest-paying or non-interest paying? Inflation-indexed? Real Estate backed bonds? Convertible bond? 100-year bonds? The options are endless.

How would an American invest $100,000?

Let us start from a plain vanilla bank savings account. I got Fig 1 below from a J. P. Morgan Asset Management (JPMAM) presentation, and it tracks savings account return from 1994 to 2020. If that investor had put $100,000 into a savings account in 2000, those funds would have earned 6%. Today, however, those same funds put in the same account will only return 0.28% per annum. Keep in mind that inflation in the United States is currently at 0.3%. So, the investors are just barely hanging on in terms of earning a yield.

More questions to consider…

  • What if the investor decides to earn a return that is higher than US inflation?
  • How can the investor beat inflation?
  • What about bonds?

Well, the US Treasury Bonds are quite safe. The US dollar is also very strong. Can a dollar bond beat inflation? The simple answer is no. Take the 10-year bond yield in Figure 2; the yield has fallen from a high of nearly 5.5% in 2007 to just about 0.74 in 2020. Bond yields move in the opposite direction as interest rates. So, as interest rates in the US fall, bond prices rise, thus yields fall.

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(READ MORE:5 key steps to a successful investment journey)

Investing in bonds does get the US investor a real rate, but certainly no daylight. How else can the US investor boost his returns to real gains? Keep in mind this desire for yields will necessitate having to expose the portfolio to more volatility (risk). What about equities?

Investing in US equities 

In 2020, the US stock market has been essentially flat, as Figure 3 shows. However, 2020 is an outlier and can be attributed to the economic malaise caused by the COVID-19 shutdown. The annualized return of the S&P 500 index between 1919 and 2019 is 10.47% (dividends included). So, whilst we cannot predict future earning, we can use the average returns as a guide.

So, if that investor was looking at a fixed guaranteed return, with lower risk, the US Treasury Bonds will be the way to go. If, however, the investor wanted to take more risk and potentially grow his capital, investing in the capital market is the way to.


Figure 4. shows the relationship in terms of yield between both asset classes. From 1901 to 1958, the dividend yield earned on US equities exceeds that paid by US bonds. From 1959 to 2008 however, the dividend yield on US Government bonds surpassed that from Equities.

What is happening is simple —as stock prices rise, their dividend yield falls. This is because there is an inverse relationship between the two. Thus, in the earlier part of the century, bonds did not pay a lot in terms of coupons. Therefore, dividend yield from equities outperformed bonds. However, as America raised interest rates in the 1970s to combat inflation, bond yields rose and overtook stock yields. Fast-forward to the year 2007 when the Federal Reserve dropped rates to combat the global financial crises, equity yields again started to do better than bonds.

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Explore Advanced Financial Calculators on Nairametrics

The lesson from this analysis is clear, and that is the need for investors to know what exactly they seek: returns or yields. While stocks may have outperformed bonds by returns, bonds have beaten stocks in terms of yield earned.

In closing, the asset class with the best return in the US for the last decade has been Real Estate Investment Trusts (REITS).

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Investment Tips

5 things you can do to attract equity funding for your business

Equity financing is a reliable funding option.



5 things you can do to attract equity funding for your business

One challenge that is peculiar to all Micro Small and Medium Enterprises (MSMEs) is that of funding. Of course, the level of challenge depends on the size of the business and the plan that needs to be executed. It is even more so for start-ups looking for funds to bring their business ideas to life.

To solve this challenge, entrepreneurs and business managers explore several sources including applying for loans, grants, partnerships and so on.

Equity financing is a reliable funding option. It basically involves giving out some equity or ownership in your business, in exchange for capital. This could come from friends, family members or potential business partners, and it is often aimed at raising money to pay short-term bills or financing long-term expansion plans.

READ ALSO: COVID-19: Abuja Sheraton suffers 88% drop in revenues

Recently on the weekly Nairametrics “Business Half Hour” with Ugodre, Tokunboh Ishmael, Co-Founder and Managing Director of Alitheia Capital, discussed the topic “Private Equity Funding for SMEs” in detail.

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Among other things, Tokunbo gave some pointers as to how business owners could attract the right equity financing for their business options. The points summarized below tell you what potential equity finance partners (individuals or partners) look out for.

READ: WARNING: Why you should avoid investing long term in Nigeria’s stock market

Management (Who is the manager?)

Any company or individual who puts up money for your business, in exchange for equity, is definitely concerned about the management.

They want to know if the manager of the business has had any experience managing a similar business before. This is considered a form of apprenticeship and it is expected that whatever knowledge gained would help make you more efficient in dealing with issues that may arise in the course of the business.

READ MORE: UK’s CDC Group invests $39.2 million in West Africa

Does he have the requisite educational background? It does not always take someone with a Masters in Business Administration (MBA) to grow a successful business. But that MBA degree could suffice, especially when you do not possess any other relevant experience.


Do you have the relevant track record? What happens if you have overseen a business which eventually went bankrupt or crashed due to management problems? Does this make the Equity fund partner more or less willing to put money into the business? Obviously not!

Some people can wake up and be successful entrepreneurs at first try, but this is not usually the case. Most will go through years of rising and falling, or working under others to gain the relevant experience of running a business.

Management is a critical point that any company or individual will look at, when you approach them with the offer of equity in exchange for funding.

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READ ALSO: Between loan and equity funding, which is best for startups?

Opportunities (What opportunities does it bring to the investor?)

Every business idea is an attempt to solve a problem. But what separates successful business ideas from others is that there is something unique about your solution.

First identify and understand the problem you want to solve, and from there work out a sustainable business solution. Every equity investor will be concerned with the uniqueness of your solution. Is it peculiar to you? Or is it something that everyone else is doing?

If your business idea has an easy entry point, meaning your idea is not unique to you, it would be difficult to get equity funding. Why? The potential investors already understand that you would soon have to deal with serious competitors who might end up doing what you do even better.

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READ MORE: Digital economy: How to move your organisation from ‘surviving’ to ‘thriving’

If your business idea shows a potential to make investors part of something big and unique, then you are more likely to get the funds you need. No company or individual wants to invest money in a business idea that will soon be drowned by competition.

You may get some sympathy funds from family members and maybe friends, but not any significant sum that will take you far.

ROI (How soon can investors get returns?)

Returns on Investment (ROI) are a key consideration for any investor (except perhaps charity organisations).

An investor’s concern with returns can best be likened to a retiree’s concern with pension. It is a most sacred topic and in fact, one of the first things they want to find out before putting in their money.


Based on your business idea and model, do I have to wait a year, two or three years before getting any returns?

A quarter may be too short to expect returns, but maybe three years would also be too long to wait. It all depends on your business venture, and of course, the investor’s plans. If he has plans to start channeling the returns into other ventures within six months, then a two-year wait would not be for that investor.

READ ALSO: Google’s advertising revenue plunges

Returns are not always financial, they could also be social. If the equity company is one that is more disposed towards a certain sector of the economy, say tech or agriculture, then the success of the company brings not only financial returns, but social returns to the company.

This is something you should also look out for before approaching any company for equity funding. You do not want to approach a company with an agricultural business idea, when the company is more disposed towards technology or education.

Ability to scale (Is the business expandable and replicable?)

A private equity partner is also concerned about how soon your business can expand, and how replicable your strategy is. Can it scale up?

Do you have a business idea that is so built around you, that it cannot function without you? Do you have a business idea or structure that will likely crumble if you die? Do you have a process that can be replicated?

The investor wants to know for sure that there are growth and expansion potentials. There is a need to be sure that the business idea you have is not one that can only remain confined to your bedroom. They want to know that you can move from offering your services in one state to serving several states and even the global community.

READ: Why you should consider selling Bitcoin now

Why is this even necessary?

Because, it affects how attractive the business will become to the next level of investors who will take over from the private equity investors. This leads us to the next point they consider.

Exit potential (How can they sell out their equity and exit the company?)

Private equity investors are often not interested in taking over your business from you. Their aim is to bring in money for you when you are starting up, provide you advice and partnership, and sell out when it grows. They are not interested in having investments in different sectors of the economy. This explains why they are often concerned about the exit potential in your business.

Is there the likelihood that we can exit sometime in the future? Or do we just invest and get stuck? How attractive can this business become for the next level of investors – the institutional investors who will come in to own the business with you and stick to the end?

One of the most frightening possibilities to the private equity investor is that when he is ready to exit, there is no one to buy in and take over. So you need to answer the question – how attractive is your business idea to investors, and what is the exit potential?

If all five questions are dealt with satisfactorily, then you are well on your way to getting a good private equity partners to provide you financing for your business.

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Where to invest N1 million right now

Financial and investment experts tell us where to invest a million naira today.



As financial markets around the world begin to settle down in Q3 2020, despite the resurgence of the rampaging COVID-19 pandemic, Nairametrics interviewed some investment experts, entrepreneurs, and corporate heads, both within the country and in the diaspora, asking for their opinions on what assets they would invest in if they had N1 million.

Their responses were as interesting as they were varied—ranging from buying stocks to investing in treasury bills, BTCs, Nigerian Stocks, and even agricultural assets.

Peter Omoregie, CFA Head of Proprietary trading at CardinalStone Partners

If N1 million is up to 0.5% of my net worth, I will invest in fundamentally sound stocks; gives me a good hedge against the rising inflation.

READ ALSO: 6 easy steps to securing a financially balanced future

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If N1 million is all I have saved, I will invest in TBILLS, because I can’t take the risk – I have less ability even if I have the willingness. If one million is 0.05% of my net worth, I may just invest it in Bitcoin – I don’t mind losing it. It’s subjective.

Oladayo Oladele, France-based computer engineer, COO Feldel Gas Limited

I will invest N400,000 in FGN short term bonds because of the less risk associated with this option. The rest will go into shares with sound fundamentals such as Tier 1 banks (GTbank, FirstBank, and Zenith Bank) not forgetting blue-chip stocks like MTNN and DANGOTE.

What comes to mind at first is “invest in small business,” but due to experience, most small businesses lack enough structure to give appropriate ROI. I would rather choose investment options with low risk, even though they give fewer returns.

READ ALSO: Silver surpasses three-week high, joins Bullish momentum

Temitope Busari, CFA, Treasurer of a leading consumer finance institution in Lagos, Nigeria


When it comes to investing, I’m always quick to note that it’s never a one size fits all approach. It typically depends on the individual’s preferences; risk appetite, short to long term obligations, financial goals, etc. Is this money you can afford to forget for the next 5 years or would you be needing it for rent next year?

Personally, if I had an extra N1million in investment capital today, I would convert it to USD and invest in global stocks. At only about $2,500 it would be a welcome opportunity to cut my teeth in the post-COVID-19 US equity market.

Afolabi Durojaiye, ACCA, Accountant at a multinational alcoholic beverage company

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Deciding on how to invest N1 million depends on whether I want to invest it for the long or short term. If it is for the short term, I will be investing 70% in mutual funds, which currently have ROI of an average 6%per annum, and the balance of 30% will be invested in Agrotech with an average return of 35% over a 9-month period. If it’s for the long term, considering the best time to invest in stock is when there is depression and equity instruments are cheap, I would use 80% to buy blue-chip stocks like GTBank, Zenith, etc. and 20% will be invested in mutual funds.

READ ALSO: Nigeria’s Capital Market: Equities, ETFs, Bonds and Beyond

Silas OZOYA, Managing Partner/CEO SUBA Capital

With N1 million as a personal investment portfolio, I would invest N500, 000 in Agriculture through an AgriTech or agro-investment fund management company.

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Corn investment would be a good fit now, given the ban on importation of corn by the Federal Government of Nigeria. So, the price would go up now, which means the return in investment would also be good.

READ MORE: CrowdFunding: Who is qualified according to new SEC Guidelines

I would further split the balance N500,000 in three ways:

I would invest N200,000 in foreign stocks via verified brokerage apps, and the other N300,000 in local stock, foreign exchange, and cryptocurrency trade to spread and manage the risk.

Anyone reading this should do due diligence on the AgriTech company, agro-investment managers, foreign exchange, and cryptocurrency traders they intend to leverage, weigh the risk, and understand their charges.


Adebayo Juwon, FTX consultant for African markets

To start with, N1 million isn’t a lot of money like it sounds, considering the current status of the NGN. I’d recommend that a business-minded person should keep most of his/her funds in USD. The crypto space has made this a lot easier; you don’t have to enter a banking hall to convert NGN to a more stable asset like USDT.

A quick illustration of what has happened to NGN in the past few months: USD appreciated 25% against NGN, this simply means if you had 1M in January, your N1 million will now be worth N750,000.

READ MORE: Where to Invest N5 Million right now

As a crypto trader and investor, If I have N1 million lying idle, I’d consider staking in decentralised finance (defi) project, which gives the advantage of hedging and gaining better interest over time.

Chimezie Chuta, founder Blockchain Nigeria User Group

I will simply invest in Fish Farming business, with a focus on smoked fish packaging and sales. I believe the fish market in Lagos and across Nigeria is really big and investment will yield profit up to 25% monthly. With the right marketing strategy, I have no doubt about the returns as food is essential in life.

You would wonder why I will not invest in Bitcoin or cryptocurrency trading. My reason is that I expect to repay the loan and investing in crypto is not too different from gambling. There are no guarantees. You can lose all the money or double it. But practical businesses like this one offer better investment protection and chances of going down to zero are minimal.

But what I personally do with that kind of money is to buy and hold bitcoin for a long period, say 1 year. I’m betting on the long-term profitability of a few crypto assets so I’m bullish on them for a 1-3 year period. Bitcoin, Kinesis, Ethereum, Vite are a few of such.


Disclaimer: Please note that these are opinions and should not be construed as an investment recommendation or financial advice by Nairametrics. Kindly consult your financial adviser for a professional advisory service.

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