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Investment Tips

Where to invest N1 million right now

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

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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.

READ: Cowrywise launches 6 new mutual funds

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.

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

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?

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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.

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READ: Japual Gold & Ventures Plc partner with Chinese firm to mine gold

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.

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:

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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.

READ: How declining interest rates, others drive a shift in Nigeria’s investment sector

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.

READ: Dollar Addiction: Nigerians spend over $35 billion on travel allowances

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.

READ: Why it makes sense to invest in foreign equities from Nigeria


 

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.

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Follow Olumide on Twitter @tokunboadesina or email [email protected] He is a Member of the Chartered Financial Analyst Society.

1 Comment

1 Comment

  1. TITILOPE

    January 13, 2021 at 4:32 pm

    what advise can you give on piggery farming, is it something one can invest into?

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Investment Tips

Retail franchise investment next gold mine for Nigerian investors- CIG

Retail franchise investment curbs unemployment  and create buffer for people looking for side hustle

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The Choice International Group (CIG) has tasked both unemployed and employed Nigerians to embrace retail franchise investment, as the initiative would curb unemployment in the nation  and create buffer for people looking for side hustle.

In line with a recent FBDS Study, there are over 450,000 Nigerian career professionals with minimum investible funds of N1 million, looking out for investment opportunities.

In the majority, these funds are looking for franchise type opportunities for ease of venturing and minimal failure risk.

As far as CIG chairperson, Diana Chen, is concerned, such investor should look no further but consider the group’s retail franchise investment opportunity, which offers Nigerian community mouth-watering offer of owning Gree & Lontor retail stores.

According to him, Gree is the world’s residential air-conditioner manufacturer, while Lontor provides high-quality, energy-saving and convenient rechargeable home appliances and lighting products for global consumers.

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He said, “Both brands have been built by the CIG into a world-class electronic retail chain in Nigeria opening no less than 20 brand shops in Lagos and Oyo over the last 18 months.

“The sales performance of its existing stores in the country makes Gree & Lontor one of the most profitable businesses in Nigeria with yields of an average return on investment of 50% and above per annum.

“CIG is offering investors the opportunity to own any of six regional logistics centres, or any number of Gree & Lontor brand shops in viable locations across Nigeria.

“It is the decision of the company to open up these opportunities to the investing public through a Franchise Retail partnership.”

 

He added that the company has mapped out two investment models it says are simple, transparent, and hassle-free.

“The first model involves only six regional logistics centres located across the geopolitical zones in Nigeria.

“Whoever invests in this will require a capital outlay of $1 million, and become a mega distributor partner of the Gree & Lontor brand, and service a network of brand shops.

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“The second investment model involves the Gree & Lontor brand shops – retail franchise stores that require an initial capital outlay of N20 million.

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“The investor will secure a store size of 120-150sqm at any choice location, shopping mall, plazas, high streets and even residential neighbourhoods.”

What they are saying

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Nigeria is a growth market for franchising and franchise development services.

Gbenga Ajayi, an Entrepreneurship analyst, said, “The retail industry comes second to the food industry among sectors with best franchising opportunities.

“As with other emerging markets, one of the challenges of franchising in Nigeria remains the strengthening of intellectual-property regimes so that franchise companies can transmit knowledge and franchise system concepts with the confidence that such know-how will be protected.

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Investment Tips

Where to invest N500,000 right now

Nairametrics interviewed financial experts on what assets they would invest in if they had N500, 000

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Since a full economic recovery this year is off the table, Nairametrics interviewed some investment experts, entrepreneurs, and corporate heads, on the assets they would invest N500,000 in. The responses varied from buying gold to investing in mutual funds or starting a business.

The world economy is projected to fall by 4.4% in 2020, an upward guide from an earlier predicted rate of -4.9% made in June. The IMF projected that social distancing due to the COVID-19 pandemic will linger till 2021, but the transmission of the virus will plunge globally by the end of 2022.

Get Stock Trading Guidance Via the Nairametrics SSN Newsletter

READ: BUA Cement shows resilience to marginally improve bottom line

Temitope Busari, CFA

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With fixed income yields at the current levels, my N500k in today’s market will go into a dividend-paying stock or alternative investments.

  • Depending on whether or not I can afford to risk some capital and barring timing constraints, I would buy a stock that offers periodic cashflow in form of dividends.
  • For alternative investments, I would explore high-yielding fixed deposits in the on-lending space.

READ: Thrive Agric: “Where is my money?”

Michael Nwakalor, Macroeconomist at CardinalStone Research

  • The yields in the fixed income markets are currently on the low and producing negative real returns, the equities market provides a viable alternative to earn a total return above inflation.

(READ MORE: Trading and Investment for beginners: How to prepare for the stock market)

  • I like stocks in the banking sector, as a number of them remain undervalued by fundamental metrics. Several names are on the course to post near double-digit dividend returns by the year-end. A portfolio that includes the following counters – GUARANTY, STANBIC, ETI, FBNH, and ZENITH, should provide adequate exposure to the sector as well.

READ: Onyema, Oniha highlight opportunities for investors in fixed income market

Adaobi Okonkwo, Currency Trader of a leading Tier 1 Bank

  • With a few things to invest in, the most reliable investment that comes to mind is a mutual fund. The fixed income and money markets are currently experiencing a downturn; hence, investing in them could reduce my income spread.
  • However, with a mutual fund, my portfolio of investment in the capital markets is determined by the fund managers with a decent return on investments certainly above the risk-free rate. Gold is a commodity that would yield a good ROI within a specified time frame if I wanted to invest by myself.

READ: FG to inject over N198 billion on capital projects in power sector in 2021

Silas OZOYA, President/CEO, SUBA Capital

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Though quite a small capital, it might not do much if you want to play the long-term investment game. However, it can set the ball rolling.

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  • I would invest it in a high yield investment platform that pays at least 5% returns monthly to cover running costs.
  • Put the money in a fixed deposit and leverage it as collateral to take a debt fund, with a 6 – 12 months moratorium from a commercial bank for a possible expansion of a profitable business. This way, you gain on the debt and still have your N500,000 intact.

(READ MORE:Nigeria’s Macro-economic dashboard for Q3 2020 – Comercio Partners)

Ugonna Thelma Ohiri-Anyanwu, CFA

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With a gift of N500,000, my risk appetite and drive for higher returns,

  • I would invest 50% of the funds (N250,000) on dollar and Eurobonds. This is mainly because of my future needs for FX and also as the need to hedge my currency risk.
  • I would invest 25% of the balance (N125,000) in Ethereum, which would give me a steady cash flow with medium risk.
  • The balance of N125,000 would be invested in Value company shares with low P/E and also stable dividend payments.

READ: CBN reveals framework for the N75 billion Youth Investment Fund

The overall investment portfolio allows for diversification, stable cash flow in both local and FX currency, and currency hedge. These would provide a solid mix between ownership of materially underpriced assets and high dividend-yielding assets.

READ: Cryptos: Nigerian financial experts talk risks associated with trading digital assets

Bottom line

Amid the rising COVID-19 caseloads prevailing globally, the financial experts interviewed above showed significant diversity on the assets they would invest in, coupled with their different appetite for taking risk reflected on their preferred choices made amid a blurry global economy era.

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Investment Tips

Where to invest $10,000 right now

Entrepreneurs, financial experts and investment analysts suggest what sectors or assets to invest in if you have $10,000.

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Where to invest $10,000 right now

The upsurge in COVID-19 cases around the world has kept global investors flocking the world’s safe-haven currency at an exponential rate, the high demand for the greenback is coming on the high geopolitical uncertainty prevailing in today’s financial market.

Also, it’s important to note at the currency market, the U.S dollar remains king. According to the International Standards Organization, 90% of currency trading done globally involves the U.S. dollar, most crypto assets, virtually the most liquid commodities are priced in the U.S dollar not forgetting about 40% of the world’s debt is dominated in the greenback.

READ: If you have N1m today, how would you invest it?

READ: Hackers, expose crypto wallets worth $150 million at Kucoin

So Nairametrics felt it paramount to ask a hedge fund manager,  entrepreneurs, and financial experts, about what sectors or assets they would invest in if they had, say, $10,000.

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Their responses were revealing and diverse as they were varied—ranging from; buying global equities, local stocks, real estate holdings to investing in digital assets.

READ: Key ‘side-hustles’ Nigerian Bankers supplement their income with

READ: What BBNaija winner, Laycon can do with N30 million  

Gavin Smith, veteran trader, and managing partner at Panxora Crypto Hedge Funds.

I would scale into BTC $2,000 now, $2,000 when it comes off to $10,000, then add $2,000 at $9,000 and another $2,000 at the $8,000 level. If BTC then breaks above $13,000 I would buy any of the above orders that had not been filled of the remaining $2,000. I would put $500 into each of these four DeFi protocols: LINK, COMP, KNC, and OMG.”

READ: Real Estate Developers express fear over selection process of CBN’s N200 billion Housing Fund

DeFi is an exceptionally volatile market and these would need active management, but they represent an opportunity with exceptional upside potential. This is a market our analysts are building a profile in, to advance our DeFi hedge fund later in the year.

READ: Real Estate: A universal convertible survival tool

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Debo Adejana – Founder, MD/CEO – Realty Point Limited.

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I follow the investment wisdom that says, ‘invest in what you know and understand’. I know and understand real estate probably more than any other investment asset class.

So, the decision as per what I will invest in with $10,000 which should be upwards of N4m is simply; Real Estate. I will either do rental income property as part of a properly organized shared-ownership structure or speculate on land depending on how much time I have with the money. The reasons are very basic, real estate investments have been known to survive and surpass any and every challenge.”

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

Darlington-Morsi Onyemaka, Co-founder Quba Exchange Forbes Accelerator Cohort ’20.

One of the main pointers to a good investment portfolio is diversified across multiple asset classes which should be according to the investor’s risk appetite. Looking at my long-term investment strategy, real estate fits in perfectly for Ten-thousand dollar investment. My portfolio is already jam-packed with high-risk assets and Real Estate will do a great job at hedging the risk factors without minimizing profitability in any significant way.”

READ: Foreign investment inflow into banking sector falls by 95% in Q2 2020

Francis Obasi Cofounder and CEO of Lead Wallet.

If I have a spare $10,000 right now for investment, first, I’ll invest 55% of the funds into new crypto startups being run by professionals and backed by companies like Coinlist; LID Protocol, and Binance. Second, I’ll invest 20% of the funds into Lead Token as there is still potential for massive growth in the coming months/years. Third, looking at the situation of Nigeria, and not knowing where the current protest (uprising) on #EndSARS is headed, I’ll reserve the rest 25% in USDC/USDT to hold against a potential Naira crash. I’m confident that there is every possibility that the Dollar will become scarce again in the coming weeks/months due to the ongoing protest, thereby returning instant gains for immediate spending on basic needs.”

READ: Ethereum robber transfers $1.5 million worth of Crypto

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Dapo-Thomas Opeoluwa Global Markets analyst and an Energy Trader.

“There are so many ways to invest $10,000. The real question depends on the investor. His risk appetite, his investment horizon, when does he or she want to liquidate? The answers to these now limit the options of investments. So for safe and long-term investments, I always advise investing in index funds, Eurobonds or the Nigeria International Debt fund. This is with the caveat that says ‘low risk equals low returns’. Also, I usually would say, invest in investments that beat inflation so you won’t suffer negative real turns.”

READ: Total, GTBank, Zenith Bank up, Bulls return to Nigerian Stock Market

Victoria Njimanze Investment Analyst at a Nigerian Investment Bank

Well, off my head I’ll go with Bonds, cryptocurrency, Stocks, and then alternatives.  I would definitely make my findings first, but I’ll make a larger portion go into Bonds say 40%, 30% in cryptocurrency, 20% in stocks, and 10% in alternatives like commodity market so as to have a diversified portfolio.”

READ: Cryptos: Nigerian financial experts talk risks associated with trading digital assets

READ: A mysterious Bitcoin Whale causes brief panic sell-offs at Bitcoin’s Market

Akinsola Esan, a credit risk analyst at Nigeria’s Tier 1 Bank.

Basically, the goal is to earn substantial returns on investments – dividends, capital appreciation, and secondly, beat inflation in naira which is currently about 12.85%. With $10,000, I’ll spread my investments across foreign equities such as purchasing and holding stocks of companies like Apple, Facebook, Google, Fastly, Nio, Amazon, to list but a few, and also buy some top-performing dollar-denominated Mutual funds such as Vantage dollar funds and some other ones recommended by Nairametrics. Lastly, I will look in the area of cryptocurrencies by investing as much in bitcoin, Ethereum, and other recognized Cryptos. There are some dividend-paying stocks listed on the Nigerian stock exchange as well, I will consider holding a number of them.

Explore Data on the Nairametrics Research Website

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Bottom line

Due to the present fickle nature of global financial markets, most financial experts interviewed above are unsurprisingly keen on mostly U.S dollar-dominated financial assets, thus reflecting the greenback’s dominance in demand amid the COVID-19  infection exploding at an alarming rate.

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