As assets continue to get beaten down and election uncertainty takes its toll on investors it a lot of people may be tempted to avoid investing all together, however this should not be the case.
Cheaper asset prices in the form of stocks or Real Estate means your money can go farther than it could when prices were higher or in the case of Real Estate which was then rising much faster than the rate of inflation.
Unless you have high interest debt you could pay off, the best thing to do with extra cash this year is always going to be investing it for the long term.
Why? Because when you invest cash instead of spending on depreciating assets, you set yourself up to have more financial freedom and better outcomes later on.
Some areas to invest in 2019 include:
Real Estate
While most rental yields are still stuck at sub 10 percent the real beauty of Real Estate is the ability for your assets to appreciate greatly over time. Nigeria’s population keeps growing and the numerous cities in the country are often short of good quality housing and accommodation.
Commercial Real Estate is also a good investment that can be explored in 2019.
Money Market Funds
A money market fund is a kind of mutual fund which invests only in highly liquid cash and cash equivalent securities that have high credit ratings.
Also called a money market mutual fund, these funds invest primarily in debt-based securities which have a short-term maturity of less than 13 months, and offer high liquidity with very low level of risk.
Just like a standard mutual fund, money market funds issue redeemable units (also called shares) to investors, and are mandated to follow the guidelines drafted by the local regulators, like those set by the Nigerian Securities and Exchange Commission.
There are a number of SEC registered Money Market Funds where investors can park their cash and earn returns superior to fixed deposits or interest on savings accounts.
These include the Stanbic IBTC Money market fund, ARM, Investment One and AXA Mansard money market fund.
Yields on the individual funds may differ, so investors should shop around for the best deal.
Stocks
While the stock market has lost trillions in market value over the past 4 years, there are still some listed firms that are growing profits and ready to provide savvy investors with good returns over time.
Generally speaking, stocks almost always perform significantly better than bonds over long periods, albeit it comes with greater risk and deeper downturns.
According to one of the largest global fund manager and investment firm Vanguard, stocks outperform bonds on a total-return basis about 82percent of the time, when comparing the two over a rolling 10-year period.
Some Nigerian stocks still look attractive, especially those that have been beaten down from recent highs while earnings continue to rise. Stanbic IBTC, Guaranty Trust Bank, Zenith Bank are some that fall in this category.
Meanwhile one of our partners AXA Mansard has outlined some steps you can take to set your financial goals for the year 2019.
They include:
1. Ask yourself what really matters
Put everything out there. Dissect, inspect and weigh them then answer honestly what really matters to you in 2019.
2. Sort out what is short term, mid-term and long term on your list.
3. Apply the SMART goals strategy to find out what goals to chase. Specific, Measurable, Achievable, Relevant, and Timely.
4. Create a realistic budget
Be sure of what your income and expenses will be and then use this to create a budget that will address your goals.
5. Direct any left overs to an account where it can grow and earn you more money.
6. Evaluate and re-evaluate your goals on a continuous basis all year round.
Happy Investing.
