With the unprecedented times brought on by the COVID-19 pandemic, more individuals are asking, “What next? What are the opportunities as the world slowly recovers from the impact of the crisis?”
To help answer these questions, M36 – a new digital lifestyle and investment platform powered by Union Bank – hosted a webinar tagged, “Investing in These Times.” The webinar, which was held in collaboration with Sankore, a local boutique wealth management firm, presented an opportunity for participants to get insights and ask questions about wealth planning and trends to watch and jump on in today’s economy.
Speakers at the webinar included Olayemi Agbe-Davies, Chief Dealer at Union Bank, and Titi Odunfa-Adeoye, Founder and Chief Investment Officer, Sankore who shared insights on Nigeria’s economic outlook, the investment outlook for this year, and how to set the right investment strategy.
Here are the five key lessons we learnt from the webinar:
#Lesson 1: Fixed income investing should be a focus for everyone!
Investing in fixed income instruments such as FGN bonds and Treasury Bills should be a focus for everyone. The pandemic brought about considerable volatility and uncertainty in the financial markets and highlighted the importance of developing a rigorous long-term asset allocation plan while understanding the ‘risk and return’ dynamics within the asset classes.
All investors – risk-averse, moderate and aggressive – need a long-term asset allocation, no matter what the yields are, as fixed-income returns give the security and confidence to take risks and make returns.
If you don’t have a long-term investment allocation, it is important to create one now. With that in place, you can then think of the various channels to grow your portfolio.
# Lesson 2: Diversify your portfolio and stay liquid – cash flow is essential!
The stock market reacts to what goes on in the world and is ultra-sensitive to existential crises such as a pandemic. Therefore, diversification of a portfolio is the key to going through tough times. The purpose of diversification is to spread the risk associated with your investment portfolio– or more simply, not putting all your eggs into one basket. Having a diversified portfolio across stocks, fixed income and other asset classes can help to smoothen out these peaks and troughs and generate more consistent investment returns.
Also, an integral part of a good investment strategy requires that a significant part of your portfolio stays near liquid as this can come in handy as a buffer against any unforeseen events. Staying liquid and allows you to tap into new investment opportunities as and when they emerge.
# Lesson 3: Buy Real Assets
Inflation & rising interest rates are some common themes for both long and short-term goal setting, and the primary purpose of real asset investments in a portfolio is to serve as a hedge against rising inflation.
Unnecessary risk can be avoided with clearly defined objectives and real assets such as gold and real estate. They also deliver many benefits, including strong and steady returns, protection from inflation and portfolio diversification.
# Lesson 4: Look towards Tactical Trades
Many individual portfolios tend to be unprepared for shocks, and the pandemic highlighted the need for investors to be prepared for the unexpected. This can be achieved with tactical trading which is a style of investment that involves long or short-term view in different asset classes, as opportunities arise. Tactical trades help investors optimise their returns to improving their returns in the short-term returns. recommended asset classes for 2021 in the long and short term include: Real Estate, S&P 500, Agriculture, Treasury Bills, FGN Bonds Private Equity/Venture Capital opportunities & NGN/US equities), and Gold.
While these are the suggested trades for 2021, it is important to remember that your core portfolio should be in fixed income and near liquid.
# Lesson 5: Seek expert advice
While many individuals believe they can navigate the investment landscape without expert advice, it is important to seek the services of an experienced investment advisor who can guide you. Investing in today’s world comes with a lot of uncertainties and having the right investment partner that understands your lifestyle and investment goals can make all the difference.
Your portfolio needs to be set up for unprecedented occurrences like a pandemic and even if your portfolio was not initially ‘COVID ready’, the goal is to make it ready for whatever will come next!
Professional wealth managers like M36 not only deliver a wide range of investment products, but also ensure you make sound investment choices that can help you navigate unforeseen hurdles, ease your investing worries and grant you the Freedom to Choose.
To get the full scoop and learn about where and how to grow your wealth in today’s world, click here to watch the replay of the webinar. Also, look out for more webinars by M36 designed to equip participants with an in-depth understanding of wealth management, investments and savings.
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