Background:
My passion for introducing this article is borne out of the concern to provide direction and empower us to work with God to achieve His vision for our lives.
Investment – meaning
Technically speaking, to invest is to put one’s little saving into an activity that will generate dividends (income) in multiples; two fold, three fold, ten-fold, and so on, depending on the size of one’s capital. Being an investor is getting money working for you rather than you working for money (engaging in paid employment).
You generate a multiplicity of wealth by putting your money in as many ventures as your savings can permit. Rather than focusing on a single way of achieving income (labour), shrewd investors look for worth in anything and everything (diversification). This is how the likes of Bill Gates and Warren Buffet both of USA, Amancio Ortega Gaona of Spain, Carlos Slim of Mexico, Ingvar Kamprad of Sweden, even Lady Liliane Bettencourt of France, and our fellow Nigerian, Aliyu Dangote, all made it as global billionaires par excellence.
If you don’t work hard you cannot in the first place generate sufficient savings that you will invest; and if you don’t exercise discipline and shrewdness, you should not expect bounteous dividends from your basket of investments. God won’t bless a mess. Frustration and confusion in many cases are the fruits of a poorly managed life.
It is God’s desire to steer us towards the right opportunities and guide us to the most profitable investments.
What are the most profitable investments in this season?
Having an idea of the workings of the macro-economy is essential to the understanding of where best to invest in a particular season. Records of Nigeria’s macro-economic indicators in the past 3 years clearly show an economy that is gradually recovering from the 2016 recession (with GDP growth averaging 0.8% in 2017, up from –1.5% in 2016, rising slowly to 1.8% in 2018 and projected to further grow up to 2.3% in 2019). Oil prices and FOREX rates are also stabilizing, respectively at an average $50-60/ barrel and N305/360 per US Dollar. The continual recovery will be most felt in agriculture, manufacturing, oil and gas, power and transportation.
For investors who are interested in portfolio investments such as equity trading, that is, buying and selling of shares, the best equity investments would be in agro-allied conglomerates.
Anyone who wants to establish an enduring venture of his own should consider going into a concrete and promising real-sector investment like agriculture, which is what the nation needs most at the moment. It will be strategic having an eye on exports. There are a number of worthwhile incentives that the federal and state governments have variously packaged for the benefit of would-be investors in the agricultural sector. Those with good money should consider investing in integrated farming (crop cultivation and animal husbandry within the same land space). Plan should be in place to process and export some of the produce. If you’re connected to the oil and gas sector, you would not regret establishing such ventures as filling stations and gas-filling plants, preferably in economically busy areas of your countryside where competition is less.
Prospective investors willing to establish big-time real sector or service industry business should endeavour to do a good business plan, especially if such persons are dreaming of securing term-loan for future expansion. Engaging the services of a tested expert for the preparation of the business plan will be advantageous. A stitch in time, they say, saves nine.
Trading, i.e., buying and selling, is no longer lucrative because more people are now selling than buying. So, don’t waste your time going there.
Investing in the Power sector this year is very worthwhile as the federal government is likely to pay greater attention to power sector improvements. In anticipation, big-time entrepreneurs will be attracted to partner with the existing owners of the comatose independent power projects. The innovative moguls will make fresh adventures into clean, renewable off-grid energy production. Therefore, staking your money in the conceivable shares of these energy-generating and distributing companies will not be a bad idea at all.
Infrastructure will definitely receive a major boost. And so, buying shares on short-term basis in public limited-liability construction companies that are winning the contracts will also make sense.
Starting a transport business that connects the satellite towns in and around FCT will be ideal for individuals resident in FCT who have passion for transport. The best way to establish an enduring transportation business in Abuja is to duly register with the Federal Capital Transportation/ Development Authority. That’s what the law says. A number of people are operating illegally at the moment. For such people, it may not be business as usual in 2019; there’s likely to be a clampdown on illegal operators with a new administration at the helm of affairs.
Because of the fear of election backlashes, so many people, including foreigners are currently pulling out their funds from the capital market. This development has led to continuous divestment since the beginning of 2019. If you’re a market player, you should not worry because every disappointment is a blessing. Now that everybody is running away is even the best time to make quick money from the capital market. Hence, NOW is the time to invest! As a wary investor, you should stake your money in short-term instruments, taking advantage of the attractive rates that are likely to be available in the near term. In other words, it is better to be bearish (buy to sale) than bullish (buy to hold). After elections, when investors start coming back, those already in the business would have made handsome profits and pulled out before the market might again begin to experience another cycle of glut.
Investing in property will be profitable to any investor who will embark on the construction of low-cost, self-contained houses for the masses. The stupendous exquisite mansions that dot the length and breadth of Abuja are not for the masses but for the lizards and ants and rats, given that the big men are tired of buying properties in Nigeria and would rather prefer buying the ones abroad.
Fixed Income investments (Bonds, TBs, CDs, CPs, and FDs) are also profitable this time around. Huge foreign portfolio outflows due to perceived election risks are keeping present-day yields potentially high. After elections, there is a high possibility for tighter interest rate environment that will drive down profitability levels. On the other hand, the likelihood of an increase in fuel price in 2019 may stir up inflationary pressures and force the monetary authorities to keep interest rate high which would ultimately add to overall investment costs and slim down profitability margins. All these point to the same verdict: ‘investing this time around is better than investing later in the year’.
Let me drop a note of caution here: you must never invest in a Ponzi scheme. A Ponzi scheme is a fraudulent investment whereby you rob Peter to pay Paul. Examples are: MMM, Swiss Golden, Ultimate Cyclers, Twinkas, Claritta, Planwell and Nopecsto.
In the final analysis, what these tips mean for you as an investor is that the uncertainty surrounding how your investment will fare in 2019 should no longer make you panic.
This writer/ author is ever willing to assist anyone who is interested in investing his money wisely this 2019, and can be reached via his telephone number: 08184433090; or via his email address: dilisinvest@gmail.com.
