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