Experts in the financial sector have listed strategies to consider before making an investment decision.
The experts who spoke at the Moneyrise Conference organised by RiseVest recently in Lagos said as potential investors in Nigeria, people should always look for opportunities to shift their assets, investments, and funds into dollar-denominated investments and assets.
According to them, this would enable the individual to hold their investments in a more stable currency, unlike the Nigerian naira.
“Investment filters are criteria used to narrow down, or “screen,” investment opportunities to reduce the risks associated with investing,” said Eke Urum, CEO Risevest.
Similarly, Kola Aina, investor, and founding partner at Ventures Capital said startups are one among a bouquet of asset classes that people will often consider when they want to invest, and “going in, you have to accept that you will lose some money.”
” While giving insights on how to invest in Startups, Kola shared “I look at the quality of the founding team, the experience they have, the size of the and direction of the market; there are some markets that may be large today but are generally in decline.”
“I also take a look at Pan-African potential, positive offline indicators that suggest the company can cost-effectively grow their business without spending too much on customer education, and customer acquisition, and then I want to see some progress. I want to believe that I can use the product I invest in.”
Making it in 2022 depends a lot on your investment horizon, Dalu Akabogu, Investment Banker, Platform Capital Investment Partners noted.
Dalu added that “If I expect a devaluation this year, it means I should lean towards dollar investments.”
“There are four things I look out for whenever I try to know if there will be devaluation. I’m looking at Foreign Portfolio Investments (FPIs), Foreign Direct Investments (FDIs), remittances, and oil prices.”
“From this, I think at the end of the day, demand for the dollar is still going to outstrip supply; meaning that there is likely going to be currency devaluation this year. If there is going to be devaluation, you should start leaning towards foreign denominated securities, and investments.”
In the same vein, Solafunmi Sonaya, a personal finance enthusiast, while discussing the investment outlook for 2022 said “What I try to do with my stocks is to buy not just stocks but ETFs because those are much safer than actual stocks.
Ahmed Banu, an Associate Stockbroker at Parthian Securities Limited had a different perspective for investment outlook in 2022 which is knowing what to risk.
“Inflation in the US at 7percent has not been experienced before and indications have shown it is likely to go higher than 7percent by the end of the year. How does that benefit anybody in this room?” he asked.
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“If the interest rate will go higher to about 10percent in America, why should I buy or invest in stocks? People don’t want to take risks. That is why in the US, stocks, crypto have been tanking in the last few weeks. This is because everybody is holding cash in anticipation of higher interest rates and when that kicks in, everybody invests in fixed income,” he stated.
Another investment filter discussed during the conference focused on identifying scam investments and investments with unsustainable returns.
Chidima Okoli, a Private Equity analyst as well hinted that as a retail investor, you need to do a lot of research. Asides from what you see online, online reviews, knowing about people behind the company, try to also understand the company’s business model to know if they can generate the ROI promised you can do all that and still lose money because investing is a risk, just try to make it a calculated risk at the end of the day.
Also, Ezekiel Ojewumi, Head of marketing, and communication, Quidax noted that the simple research you do before investing could have a significant effect on whether you should invest your money or not.
To invest safely, spread your money, it reduces risks unlike investing all your money in one asset.”
