It all depends on whether you are new to investing in Nigeria, building a portfolio for the post-corona events, or you even have some stock winners of your own. But if you have some money to spare, we recommend you invest it in the stock market or federal government bonds.
As shocking as this might sound considering the trying times of the outbreak and the recessionary effect it had on the financial market. It really doesn’t matter how scared you are right now, the truth is the stock market has crashed more than once before in the past few decades, but it always bounces back. Which means buying during a recessional period can produce an outsized gain in the near future.
First Time Investors
The stock market crash undoubtedly has had people strolling the stock exchange for the first time, and some still believe in the myth that stock investment is always a bad idea. But losing on your first investment can definitely scare you from future investments.
However, investments like the FGN Savings Bonds can help your investment decisions. The FGN Savings Bond is issued by the Debt Management Office on behalf of the Federal Government of Nigeria. The bond is targeted and tailored towards retail investors with a GUARANTEED quarterly interest payment and repayment of the principal amount at maturity.
Diversification is a Portfolio’s Stronghold
If you are still looking to build a portfolio for yourself, this might be the best time to do so. Sharing your risks across penny stocks would reduce your risk of exposure. Penny stocks in the Nigerian Stock Exchange are small equities with relatively lower prices ranging from 50kobo to N5 that investors can make a quick gain on via share appreciation.
For example, a 50k or even a 20k investment across a few penny stocks isn’t a bad idea as opposed to throwing it all out on a single high end investment.
Remember, it’s easy for N1 to become N2, but N100 to become N200 is a bit harder, and vice versa.
The Time to Buy is Now
The bottom line is if a company has been on your watchlist for a while. The best time to act is NOW. Nobody has a clue to when the recessionary period will end, and waiting for a cheaper price might be fruitless.
In conclusion, regardless of what you think, the best place to invest your money right now is in the Nigerian financial market. A structure which is sure to stand the test of time better than any other form of investment.