In many quarters, it has been reported that global economic recovery this year is on the cards. Global growth is projected to reach 6 percent in 2021, then moderate to 4.4 percent in 2022, according to the International Monetary Fund. Compared to the October 2020 world economic outlook, the forecast for 2021 and 2022 is stronger.
Several people have alluded to mutual funds investments, starting a business, and choosing safe-haven assets as the way to go in growing one’s assets and wealth. In a survey of investment experts, an entrepreneur, and a venture capitalist, Nairametrics sought to uncover where these individuals would invest one-million-naira today.
Fiyin Ogunlesi, VC Investor at Oui Capital.
Interestingly, one million naira is still a sizable amount equivalent to $2000 somewhere else in the world – enough for monthly rent or a modest vacation. Beyond the regular financial instruments – bonds, commercial papers, treasury bills, mutual funds, that are accessible with these amounts, the private markets have seen incredible interest by investors, coupled with recent waves for investing in start-ups and tech-enabled businesses.
Nigerian Investors – young and old are seeking to secure their investments in a more stable currency like the dollar and most private funds are dollar-denominated.
Investing in private markets provides that opportunity to secure patient capital and deliver returns that help keep its value.
Although High network individuals and Institutional investors still represent the private market space, middle-income class individuals have joined the train by pooling funds, with 1million naira/ $2000 or less and investing through syndicates or just as a group.
We have seen locally owned private market funds – mostly venture capital players be more receptive to such amounts. For local fund managers, these smaller amounts may make sense because it matches the kind of smaller ticket amounts, they invest in at the early stage of these start-ups across the continent.
So Nigerian investors are able to reach out directly to such local funds or through investment groups and invest in Nigerian and Africa focused start-ups – creating an opportunity to grow the continent and their wealth.
Olamide Adeboboye an investment analyst, at FSDH Capital.
1.) Equities: Earnings season is a good time to look out for stocks with impressive performance. Also, investors can look out for stocks with high dividend yield.
2.) FI Instruments: Risk-averse investors can look out for bonds and bills with relatively high rates.
3.) Investors can also pull funds with either family or friends to invest in high-yielding commercial papers and other alternative assets such as real estate.
Mosope Arubayi SSA Economist (West & Southern Africa) & Market Strategist at IC Asset Managers.
Inflation and currency risk are a thing now, so my investment choices will be centred around protecting my investment against the adverse impact of both. My first consideration will be dollar-denominated assets as they could help with value preservation. The choice of assets and level of expertise will then determine the level of profitability. Top on my list of asset choices will be commodities and stocks.
While commodities have had a great run this year, I believe there is still some upside risk as inflation risks mount on the back of countries ramping up vaccinations, and economic re-openings deepening.
The upbeat sentiment about the global economy in the near term should drive the prices of risky commodities higher, even though there could be some corrections. A much severe global delta variant episode could make me skew my investment in favour of gold, but ordinarily, my bet would be on riskier commodities – especially agriculture and industrial commodities.
To beat the recent inflationary pressures, I could also gain exposure to the global stock market. Skilled, active traders could invest in individual stocks while the moderately risk-averse investors can access the market through Equity ETFs. A blended ETF of equities, bonds, and commodities is preferable for the more risk-averse investor – with a lower allocation to bonds.
Darlington Morsi Onyemaka, Forbes Accelerator Cohort ’20 and founder of Quba Exchange.
For a lot of reasons, agriculture.
This is because it is a low-risk investment, its value tends to increase over the long term, it greatly keeps pace with inflation, and it never goes out of fashion as it creates food and other great benefits to the community.
Thanks to the growing Agric-tech ecosystem, investing in agriculture is now easier, faster and a lot more accessible than ever. With a million naira, one can have a very diverse portfolio of agro-investments in just a few clicks.
A million naira may be big or small, depending on how you see it, who is looking at it or how it is utilized but what really matters in any investment is the rate of returns when compared to the risks involved.
Tomie Balogun CEO of Twelve a digital financial advisory start-up.
Honestly, a tough one to advise on. That’s because of the following factors; risk appetite of the person investing and personal financial goal as well.
These factors will determine what investment options work.
If the prospective investor has a low-risk appetite, then treasury bills and the FGN savings bond are options to consider due to the opportunity to earn directly from the debtor. Mutual funds are also an option to consider with a low-risk appetite. They are professionally managed and offer the opportunity to diversify across different financial markets; money market and capital market (which includes stock market). There are money market mutual funds, stock mutual funds and mutual funds which invest in a mix of markets.
With a medium to high-risk appetite, the investor can consider investing directly in either the Nigerian stock market or the US stock market. The US stock market has (Exchange Traded Funds) ETF options which help the investors manage risks.
In all, the investor should consider an ongoing investment plan to continue investing small amounts of money over time. This will allow the investor to take advantage of compound interest and continuous growth in these investment options. Investing should be a long-term lifestyle habit and not something one does once a year.
As the COVID-19 pandemic resurged, the financial experts surveyed above showed a significant range of preferred investments they would make, as well as a varying appetite for risk as a reflection of the choices they made in this uncertain global economic era.
These are opinion pieces and should not be construed as investment advice or financial advice from Nairametrics. Please contact your financial advisor for professional investment advice.