 Thank you for staying with us. It's still the breakfast on plus to the Africa and right now We're going to be talking about the types of investments to make in 2024 We have a guest here do not use on a job He's an investment banker and also the fellow of inch of the Institute chattered accountants of Nigeria. Good morning So thank you for joining us. Good morning, and thank you for having me. Yes So investing in 2024 I want to believe is paramount like it's essential for everybody to start to think of How they grow their monies because that's what we talked about the last time you're here growing How to make your money grow for you? So But today we want to take a deep dive into it We know how important it is growing your money is because if you have different goals, maybe you want to Buy a new car or have buy a new house or go on vacation You need monies for all of these things But the little money that you get from your salary or even your side business might not be enough But when you start to invest them you get returns, which would help you Fulfill all of these goals and needs that you have But now we're looking at the types of investments to make in 2024. So we just want a brief Overview of the types of investments then we start to dig deeper into each of them So what are the types of investments we can start to put in our monies in 2024? Okay. Thank you very much for the question Now in talking about the types of investment, especially dealing with financial assets Before you even dive into the type of asset the first thing that is very important Is to look at some important variables the variables include what is my investment objective? What am I setting out to achieve with this investment? Right haven't answered that the second question you have to ask answer is that What is my ricks profile? So what rick was my ricks profile was my ricks tolerance level What's my ricks appetite like because in the investment environment the higher the ricks the higher the return So you have to also look at how tolerant are you when it comes to ricks? Then the other thought question that is also very important is the fact that what time horizon are you looking at? Are you looking at short time? Are you looking at a medium term or a longer term? So haven't answered these three important question They will now say okay, haven't answered what are the investments that I can go into So looking at financial asset broadly the first on the list of course is equities So equities has to do with stock and we have ngx there Where we see all the activity that is happening there and thankfully from last year up to this point Equities are doing very well. So that's the first side Bind into ownership of a company. So either you call it equities or you call it stock That's the first one. Then the second one is Fixed income now for fixed income. We are not buying into Ownership of a company or rather you are investing in an investment vehicle that can face your interest So and that bucket is quite large. So you have your mutual funds there You have your commercial papers. You have your treasury bills And you know and as well as bonds. So anything that gives you interest fall under the fixed income and it's a very big bucket So I've been spoken about The stock the that is equities the fixed income Then we can also look at the another option that is very available is currency trading Of course the risk there is very high. I need to understand that as well Then you have your Cryptocurrency script or as well or digital currency as the case may be so generally Then of course you have the real estate. There's a reason why it is called real So that is not a financial instrument But it's also another investment class that you can look at Considering how much you have at the moment. But broadly is your equities your Fixed income your currency then maybe digital asset and the likes Let's start with digital assets because To some to a lot of people it's still a new terrain And especially the government of nigeria. It doesn't seem as if it has embraced it that much So where are we in digital currency mining or whatever you call it? The loss that govern them because if you talk about it a lot of people will say it is not legal in nigeria So how are we where are we in that regard? Okay, thankfully they've been a couple of development in that space number one in 2023 Sec brought out a framework a regulation consigning How you have you can treat deal and trade in your script us, right? Alien the year two we are still in january central bank also have come out to say yes You can it is not legal. That is the direction the world is going to and we're happy to also key in So a policy circular was released and government clearly stated how that's how those that are willing to play What they must do and then for The bank as well. There's also a regulation on how they can onboard how they can also deal with That that space as well. And I think if I'm no mistaking come february 27th or there about central bank In partnership with other stakeholders will be launching our own digital Digital asset, so we've done that already. No The launching is happening sometimes in february. If I'm no mistaking february 24 27 All right, well So it seems we're talking about digital out there like Technological innovations or things that can influence your investment decision right now in 2024 So are there any any tech thing, you know emerging at the moment that would influence your decision to say, okay? This is what I should be investing in. This is not what I should be investing in So for that space, right is highly technical, right? And it you can't just come in and say you want to put in your money So first you don't understand it or you're talking to an investor or An expert, you know an asset manager that is very comfortable in that space And they are able to advise you that look these are the currencies that are coming up You can buy them that over time we expect that this will grow You know or don't go this direction go. It is some call it speculative asset today You know your bitcoin and the likes and hear that it is not 20,000 It's not 30,000 dollars keep growing right, but there are other smaller ones that The values are very small at the moment. So for those that understand this space They can advise you that buy we expect that it will grow over time But it's something that you have to take your time understand the market and talk to those that are playing in that sector Also that you are guided and we are properly guided because I must tell you that that space is very volatile If you don't have the knowledge you shouldn't play in that space All right. So since you talked about even bitcoin or whatever going up, let's talk about inflation as of Right now inflation is about 28.92. Right. So does that affect your investment? Maybe I've invested X amount today and because of the inflation I don't even get as much as I have invested today You see people even buying properties Because now we really play with FX. So you're probably buying a property. Let's say for X amounts of dollars, right? But by the time you even want to sell or do something with that property by the time you sell it It might not even equal to that same amount of dollars that you had bought it in the in the past with So does that affect your investment? Does inflation affect your investment? And what are like the interest was the interest rate like does it cover up for inflation? Okay No talking about inflation Unlike what happens in the developed world, you know the china of this world The united kingdom the eu as well as The united states which happens to be the largest economy in the world We've seen inflation rise as high as 10% and are currently is decelerating coming down very low three percent four percent But that has not happened in Nigeria, right? Because of some structural issues and the rest of them Like you rightly said inflation today is 29.28.92 That is even for the headline inflation if you touch the food inflation We're talking about 30 so and that is what is driving investors to areas Where they can get return that is above that inflation rate now if you have investment What your actual service? What is the return that i'm getting? For equities equities did as much as 39 40 percent There are some sectors you will touch that in fact was above 50 percent or 60 percent that of course is already above the inflation Of course, absolutely. So if you want to invest and the objective is to do something that is above inflation Then we have to look for asset classes Whose return are above? Yes, so by time you do that, you know that okay You have to refog the inflation and then your real rate of return is positive If it's anything less than the inflation rate at the end of the day Your real rate of return is negative if it's not up to inflation rate. So that is also driving Maybe that's part of what is driving the activity we're seeing in the in the ngx That is in the equity side because investors want to make more money And of course investors are also looking at some other asset class Aside the naira. So if you say look if last year Before you know the new government came in I had I needed them One thousand dollars. So about four hundred thousand They're about to give you that one thousand dollars. Yeah, you need 1.2 million So So if you are holding naira, right? If you are not careful, so I have this and a client of mine That was discussing and say look Whatever you give me today if I convert it There's no amount of interest that can give me, you know, what um, I'm supposed what I've lost in terms of Um, the exchange rate. So what we are praying and of course the government is working very hard To see that naira find its real value and the value of our currency keep Improving so that you don't lose value But it's a risk and that is why you have to look at what is the objective and what are the investment options Available in the market today that can help you the frog inflation and also take care of Your foreign your FX risks and asset as that Let's look at the buckets the various buckets. You started out with um, with equities Which is buying a part of the company as it were Yes ownership of a company. I like that. I would like So when we when we said I'd like to look at Uh, the entry point how low or how high you must be before you can do this And then the gestational period More or less I'm using terms. I don't know whether they are they're relevant to you But how long it has to stay before you can get your returns and then also the risk Of investing in this thing and how you can maneuver out of it So tell us everything about these equities that we need to know before we go on to all this Okay The first point especially in equities is if it is not your space if you are not an expert Please talk to an expert get an a stock broker Don't take the decision to invest on stock on your own if that is not your space That's the first advice right now For you to invest in equities today So first of all you need a css account Because most investors only what we used to have in the past is unless there's an ipo for example When you're interested in buying you'll not when you buy the register will issue you a share certificate You'll have to be telling us what all these things mean because ipo I know is investigating policemen I don't see a css or something that you called earlier on let us know what these things are So the ipo is initial public offer so if a company is going to the market to raise funds So and they want to do through an initial public offer So they'll come to the market and say come we have this in the market come and buy is a good investment Right, so in that circumstance a certificate can be issued to you But if you are here today, I've seen maybe a stock of a firm Or any of the sectors in the economy say I'm interested in this talk So normally you have to have an account, you know for you to Have account in bank you need to go to the bank open account But for stock now you need to have a css account For you to be able to buy and sell shares. What's the css account? Central security Yes Just something that's the you know security You have to have an investment account and that account is with css Once you have your account that means you can trade you can buy stock Your account to be credited whenever you want to sell and you issue a sales mandate and they say buyer Your stock position, which is your css account will be debited and then money will be paid into your account Now for a lot of the so you can just come to Nigerian's exchange for example I say I want to buy stock you have to go through your stock broker Now for a lot of these stock brokers they have their minimum entry level So on the average a lot of them with your 50 000 you can start Right. So now when we when you have your 50 000 And a css account has been credited for you. You now tell them I'm ready. I want to buy this stock Or they will ask you all you ask them. Sorry. What stock will you advise me to buy? Then they say okay This stock that we can see in the market is under value at the moment We see good potential Then they'll buy for you and then you watch how the Performance of the stock of all the equity above you. However A very important thing when you are buying shares when you are investing in stock is again Back to those crystal number one. What is the objective? There are two ways you can gain when you invest in stock One you can gain dividend Right. So now we're in the em in environment 2023 has come and gone a lot of company will start talking now. They are financial performance For 2023 and they start declaring dividend Now if you are if you are having any of those stocks that dividend is Declare it will be paid into your account For some they say look, I'm not looking at dividend. I'm looking at gross So which stock do I think is on the value currently or has potential for growth? That okay, I will buy now and then hopefully in the nearest future It will appreciate and I will sell so for example If I have a million naira today and I say look I want to buy a stock of this company And they are selling at 10 naira. So if you divide 10 by 1 million that means you have 100 000 units So if you both attend naira place in January and we move into june and the stock is now 20 naira That means you're 1 million if you multiply your 20 naira by your 100 000 units That means you have 2 million So that means your 1 naira that you invested has become 2 million And you now have gain what do you call it 1 million naira? However, if the downside happens But you can decide to leave it there until it appreciates Of course So for stock right and which we also call equities It's not for a short term It's for medium to longer term Because all that volatility can come and go But over time you are able to make your return and even grow your money Again, but for some that are very sad That's why I'm talking to your first in stock broker is very important So if you are targeting maybe have a very a company that is paying good dividend You can say okay. Ah, they've declared dividend. They are closing their book as a support. So let me buy now Take advantage of my dividend of my return and and and then at the later date I'm able to sell There are some companies on agx you buy in naira But because of their global coverage the dividend is paid in dollars So you can look at that invest your money That's nice. I like that I like that Okay, so I want to go off tangentially to be since we're talking about stocks and equity Can you buy stocks for someone? I mean, is this something that you can gift Because sometimes you might want to you know buy something for someone and you want something that can grow So not just oh, I'm buying you this phone or I'm buying you, you know a gadget or a suit or a fashion item But can you even start to invest on Be half of somebody so even for your child as well I want to buy stocks for my child because I know that okay in a couple of years since we're seeing now that it's a long term Investment opportunity. I know in a couple of years it will go to X you know amount or I want to gift to my friend or to my partner. It's their birthday their anniversary A wedding present and I buy stocks for you. Is that possible? Absolutely So in the stock not just talk even in the fixed income side of thing your mutual fund you can actually buy for a friend Now what happens for if especially when you want when you want to buy for a minor You have to go through the process and open an Just the CS the CSS account for the minor then because the it's a minor Um, a guardian will also be on boarded in the course of then you cannot buy and sell A lot of people today are sitting on assets in a financial asset that their parents bought for them So maybe the stock was even 50 kubo 20 Naira pay share and the rest of them so that is possible and there's procedure for that You just follow the procedure and then the money you have You invest for them and then you keep growing and tomorrow they'll be happy that My daddy my mommy did this for me and I'm sitting on some pretty good Okay, so we're talking about short term and long term now Stocks is long term. I want to know if the fixed income is short term or long term And what are some considerations you should look at when you want to start to invest? So I want to do a short term investment. I want to do a long term investment What are these considerations and then for you as an expert? What are the things that you know, you can get me I'm bothered about the high returns That's what I want So what are those investment buckets that I know that I can get the the high returns from as well as Okay, short term long term. So just give us that right now But what was your definition of short or long term for the stock? So anything less than one year is regarded as short term So you can do this talk for three months. So if you understand the market Can you do the stocks for three months? You can do for two months Stocks. Yes. So for example, we have your css account, right? And you've seen the company the performance is good. For example Last year after the currency unification, right? A lot of company had A lot of revolution gain because if they have asset they are sitting on asset that are dollar So today the those values are higher In fact, even the regulator have come out to say you can declare those revolution gain as dividend to your client So a lot of those companies have done well Some from now we start seeing result performance coming out. We've declared 200 billion We've declared 100 billion depending on the sector and how big your your fame is Now some of those companies will pay dividend. Some will come out to say, okay We're going to pay 3 Naira per share. We're going to pay 5 Naira per share So if you see that information And there's a closing date usually for the register that look This is our position. We are declaring dividend and we are closing our books We use the register, let's say asset, January 31st For an investment savvy person You can come and say, ah, let me go to the market. These guys have declared 5 Naira Closing date is January 31st. We are not in January 31st yet So we'll be buying now. You are going to participate in that So if you understand the market, you can look at it But that's the reason why you need to speak to your stock broker to assist you to Oh fantastic Okay, so now back to my question. What are the factors? You should look at you should consider in this short term because I mean we only just talked about equities now So in the short term and the long term what are the considerations and what is the high return because that is where I'm bother That's what I want to know So if you're looking at the high yield environment, of course, we are going to equities, right? But if you're looking for something that is within market average That ensures that your principal preservation is guaranteed If I have my house for example now It's ready now where I work. They're happy to pay me now January, but the rent is not due to achieve that money should not be put in equities You are not sure your principal preservation is not guaranteed So you should come into the fixed income space Where you know that Then you'll look at okay from the asset class Both are the option available. So for example, we've mentioned I see So you can see there's a company coming to the market to ask him for form and they want to pay 20% You know for 270 days or 180 You can look at it The rate here is 70% It's higher than market average I'm happy I can't do that You know Then for you can look at the treasury bills to okay. What the market expectation? Okay, how much can I make? What's the interest rate? So based on the asset class even in the fixed income They all have various Interest rates because they are interest bearing. So before you enter you are seeing what the rates are And then again the mutual funds mutual fund. There are all kinds of mutual funds in the market. There are those that are equity based there are those that have Short-term security base like you want the popular one that they call money market the asset The underlying asset class are your treasury bills your commercial paper and bank placement So you know that your principal preservation is guaranteed I'm not going to come in June for example When you are ready to pay and your It's not That's that's me you're talking about me That's the bucket I'm falling into You have good money and I that's that's what I'm going to But you can do some equities You can do some fixed income, you know, you can just spread the money around at the end of the day The weighted average that will come to you You know, well at the end of the day, you are not going to lose so much even if there's a lot of volatility Because you spread your money around, but it's very important that when you are considering investment The goal is key. Are you trying to grow your funds? Now if you go to maybe some investment outfield there was the interest rate two percent The average one will keep your money somewhere or you leave it. I do average is two percent. So why should I Have less when I can have more so let me go to where I would get 10 percent 12 percent Everybody wants more you say at the 12 percent it's even small It's better than leaving your money I do If the objective is I don't want too much risk this money. I can afford to tell myself stories I'm getting married in one year time I will use that money for speculative activity. So I have to go into a space where I'm sure I have a business partner That I'm supposed to give him money. It's not due yet. So why leave the money I do put it where you are sure that It's not to grow it. Yes, it is safe and it will grow absolutely even if it's small Even if it's not so much. So bottom line we should never go to banks anymore You will not want to answer But you know, we're looking at the advantages Why do I even need to go to the bank even though you've said it subtly that you know These people have two percent and all that it doesn't come to you. Anyway, they take your money more Yeah, but bank charges. Yeah, so the the question I think I asked this the last time is Anytime you want your money, can you just walk there got get your money? Okay, so let's go back to let's start your time and answer Let's go back to equities Now if you have invested in the stock of your phone, right and you want your money So that will take some time a couple of days. Number one, you have to place that cell order And of course somebody have to pick and be interested and then maybe within plus one plus two the money will hit your account Right, that's for the equity space You know that if I want to say I have to put it at the back of your mind that anytime I'm here now Anytime I want I need money I have to go through a procedure a process to get my money back That's for the equity side on the fixed income side There are some instruments you buy They are tradable also in the market So if you buy for example, there's the savings a federal government savings bond There's um, there's bond generally if you are in that space They are tradable in the secondary market. Even your treasury bill can ax your Investment banker your financial institution. I want to sell and need money They can go sell it for you and give you cash Then if you are in the mutual fund space Some have A period of one day 24 hours to collect to get your money back Why some will tell you within 48 hours to get your money back? So you factor that in when there's a need for money, you know that after 24 hours your money will hit your account Or after 48 hours maximum Then you will be able to assess your fund and do whatever so from mutual funds, right? You can come in they have their minimum holding period Some are 30 days some are 180 days some are 90 days Once you have exceeded that initial holding period you can top up and of course you can redeem anytime you want money Okay, that's good to know that's good to know. I mean I need to start investing That's one of my goals in 2024 because it's not something I've you know, with a lot of money Not with a lot of money I have some money But I personally I I I'm always When you tell me that I'm like no, I want to be seeing my money I a lot of put it under my pillow and know that it is safe But since you're saying that some of them the principal is safe and then you still you're still able to grow your money I think that's good for people So people can start to look at all of these opportunities You just mentioned something I'd like to know Um in a regular bank There's a possibility that if you are the kind of person that wants to see the money and how it is performing You can see it. Can you also see it when you're investing it? So are there tools that you have to have so that you know that okay the 50 000 I put this month It has grown to this without necessarily coming to me Maybe like an app or something that I can just always check. What do you need to do? Okay, so For equities, right every day at the end of the day We see the closing prizes of all the stock Okay, so any stock that you are in you'll be able to see oh I was yesterday it was 10 error today is now 12 error And if you want to know what the worth of your investment is you can punch your calculator I say okay, so currently and what it is you see that right so for the mutual fund space Yes, so for for example the firm that I work for we have an app that every day you see what Any you have earned even if they say 10 percent 11 percent, you know interest accrue every day Yeah, so every day you are able to go through your app I am able to see what return and you can monitor and if there's anything you are not comfortable with You can call your relationship manager and say look I'm expecting this But this is what I'm seeing and if there's any explanation to be offered Maybe there's system glitch or something we able to offer you that explanation and everybody's happy. Yes Well, I like that because that now works for me as a person in me that I want to see my money So your pillow is in your phone Yeah, so I'm watching it. This is what my money is If for instance my money's on I'm calling you Why is my money not performing as I thought Drop a WhatsApp message for me to a m and read that yes Because I want this information In fact, we even send a screenshot that is what I'm seeing is there any explanation for this I can tell you that we just paid you dividend yesterday and that's why your position has dropped again And it's happy. Oh, I've received some dividend. Oh, fantastic. I love that Like I said, that should be at least most people's goals for 2024. You should start to look for How to invest this year. So don't just keep your money stashed somewhere Invested so that you can start to get returns and then you're planning for your future Not just your future the future for your kids and generations to come It's just like leaving a legacy, but that's what we're going to wrap it up here On the shore. So I want to thank you for coming. I guess Mr. Donattus on Nogja He is an investment banker and the fellow of the Institute of Chattered Accountants of Nigeria. Thank you so much for coming All right, that's the size of our show today. We'll see you tomorrow again On the breakfast. It's been a wonderful time. And I hope you enjoyed watching the breakfast today My name is Romare Paulson, and I am Yamgul Aghaji. Let's do it again tomorrow. Bye for now. Bye