₦airaland Forum

phemmie06:
It will still over happen

Good. I like that.

eagleeye2:
I will rather hedge my funds against inflation by, having a domiciliary account and buying dollars with it. As far as safe investments goes, T.bills is about the safest out there. If I want to diversify, I can do equities and real estate.

That is okay. Many people don't like Cryptocurrencies because of the volatility, my point from the beginning was never about buying cryptocurrencies, it was simply stating the fact that Treasury bills are not safe as we think they are. Safe in returning your naira? Of course. But safe in buying power and actual wealth? Not really.

You could go into real estate, buy stocks, buy foreign bond funds or simply do something that creates Forex for you.

I am just redefining what people think is safe or not.

SirLaw12:
please guide me on how to operate foreign accounts or foreign bonds. I invest my money in TB just to keep it for future investment i have in mind.

UBA/United Capital has a Euro bond fund, you can go to their site and find out more about it.

Jejebabaa:
There are two kinds of traders:
1. Those who are humble.
2. Those who are going to be humbled.
---Steve Burns

Loool

fxuser:
AfriPrud
- is d MM asleep
- touched 3.43

Chai. I hope it happens again...

eagleeye2:
The equities, yes if you are investing for the long term and equities in strong and dependable company. And still it is still riskier than T.bills
Cryptocurrencies is a very volatile form of investment to be advising someone who is looking forward to a low risk investment like T.bills which is the major reason for this thread.

Not all Cryptocurrencies are an investment per say. Most of them like Bitcoin serve as a hedge against inflation.

Are you willing to bet the naira will not keep depreciating with respect towards the dollar? Or other goods and services? Sine you are not, then it's a good idea to hedge.

Because something pays me back x% in naira with a 99.999% guaranty doesn't make it low risk or safe. If 500 naira becomes a dollar tomorrow, your buying power will be affected and your Treasury bill interest and capital will be too. I don't know why people don't always think about this or forget to.

If land was traded on a computer like stocks, many people will call it high risk. The reason many people are at rest owning land is just because there is no structure or framework in place to see the amount of lands sold per day (volume) and how many people are willing to buy or sell (liquidity). Trust me, if they were traded on a computer people will have a heart attack.

Is Treasury bills low risk with respect to getting your naira back? Yes.

But it can also be high risk with respect to buying power and wealth preservation or creation.

I just think many people like instant gratification, hence why they stare clear of stocks and call it risky, same as cryptocurrencies. Some cryptocurrencies are securities but ones like Bitcoin to me are not an investment but a hedge against a currency crisis, inflation or systems that require trust.

What many of you think is high or low risk is not what you think with respect to wealth preservation.

There are even cryptocurrencies you can mine via a sort of mechanism and earn % almost the same as Treasury bills, but the % you get back is in that currency, and yes they don't have an iota of risk in that your principal will always be with you and your interest will definitely always come, but I can't shake out the fact that your interest and principal are in that cryptocurrency, so you are at the mercy of it's market value... and this is the same with naira in Treasury bills, the % you get is not a % of buying power or wealth, it's just a return in your naira. That is all. Not a return of your wealth or buying power. A return on your naira. This is a very important point. Your return is not in dollars or pounds it's in naira... hence when the value of naira gets beat down, your Treasury bills principal + interests becomes a loss. Don't get me wrong, you are still far better off and richer than people who don't invest, but when did beating mediocrity slightly become an achievement?

I am not attacking Tbills, I am just letting you all understand what the low risk and high risk you think you understand means.

eagleeye2:
Your last sentence, diversify to what exactly? How many investments are out there with low risk.
I believe people considering Tbills have low risk appetite.

The Equities are the best forms of investments in my opinion, but a lot of people think they are too high risk, lol.

You can also consider cryptocurrencies, they are your best bet against inflation and if you feel the systems in place are not to be trusted.

Agbalowomeri:
In fact, the most important that covereth all
It's an exercise
You finish, u drink water
You finish you sleep peacefully
It's an act of kindness and gratitude
It reduces your sugar level
At that very point, you are willing to learn all and any lesson; so you are teachable
Brings you closer to immediate and extended family

Hahahahahahahahahahahaha.

This man.

Your analysis is spot on.

omoharry:
what about ARM MMF..are they better for investment?

What do you mean by better?

They are actually okay. Depends on you at the end of the day.

anori:
And you aren't taking on board what i said. Yes the ratio of investment is accurate it is exposed to equities but a maximum of 25%. Because of that a bearish market will not 'do the fund in' because it still earns from the less risky 75% investment. From the stand point of which fund would make more money I would recommend GIF in the long term. I have historical data and 4 years of experience in the fund and its about to pass through a second election period. I have invested in GIF and MMF since 2014 and I have gotten higher returns from GIF than MMF in the long term. MMF is more of a short term investment option with minimum risk. Since you invest in equities you would understand the benefits of holding and the long term gains unless you are a day trader or you prefer the minimum risk from the Mutual Fund.

Yeah. I get you. I love me some equities to be honest, what about the fees? Is it as high as Money Market fund or lower?

Is it as liquid as Money market fund? (I.e. the ability to remove it anytime as you like after the first 3 months)

Finally I am assuming you don't know the equities they are involved with, and have no access to the dividends on each stock, just the capital appreciation on said Equities? Final question is, would I benefit considerably from buying in a bear market? I.e. just like buying undervalued stocks in a bear market and making really nice returns in the bull market?

Sorry for all this questions, I have found out sometimes it's better to ask people using a product questions than customer service. Thanks in advance.

BullBearMkt:
...Gud morning @fxuser. I desire most of what you wrote, but I failed awfully when I look at the colour map.

more work to do. Thanks for this.

Lol. Small small boss. You will get there. People underestimate exercise and more sleep. It's needed. I am surprised a healthy sex life is not in the list too. It should be there.

Is there anyone here using United Capital (Investnow app or web) to trade?

Are they okay? How is their volume and liquidity depth like? Customer service? Thanks in advance.

AbbyE:
Should I trust Stanbic IBTC with my money if they keep making silly mistakes like this

1. I paid some money into my money market fund and they posted it twice in error. Almost three weeks later they have still not been able to do a reconciliation and correct the issue

2. I moved some money between mutual funds , from bond fund to guaranteed last week monday, 8 working days after, they have not credit the guaranteed with the money but they have taken the money out of the bond ( different money from the one above)

I have sent emails which they have not responded to , I am not sure if i have to go to their office

Better you call them.

arena07:
If the rate is higher that TB interest rate,does it means the person will lose the entire money which is the principal invested in it?because current Nigeria inflation rate has increased from 11.14% to 11.23% this year.I need more clarification Thanks

No, you won't, but your buying power will be reduced.

See guys, if I put a million naira in T bills and I get a 10% rate, if inflation is 10%, it's almost like canceling each other out. Assume you used to buy eggs before for a 100 naira. A 10% increase means your eggs will be sold for 110 naira now. Hence why I said you are better off than people who don't invest at all (you will be relatively richer than them), but your buying power is almost the same.

Right now I know Tbills primary market rate is 17/18% though, so for now the rate is still beating inflation by a nice amount, but not much.

Just remember, it's all about buying power.

yomi007k:
Valid points. Diversify into shares and MF right?

Yeah. If you can have access to foreign accounts or foreign bonds. Do too.

Do not underestimate owning some cryptocurrencies as some of them are your best bet against inflation of any kind.

Acidosis:
Do you know Nigeria's current inflation rate?

It's over 11% right now. About 11.25% last time I heard.

Bravedude112:
Nice write up man,but i disagree on the last line. Tbills can make you rich,it all depends on how much you invested!

Perspective my man.

Being rich is relative. This is something Nigerians as a whole have to understand.

Remember the country you are in, we mostly depend on imported goods hence our goods and services are sold in dollars. It's a fair estimation to agree that in the future (Let's say 10 years), 1000 naira could make a dollar. If you agree with this analysis, then all you have to do is divide the current naira rate by the estimated one in 10 years and figure out the % increase. Do an average for Tbills being compounded from now till 10 years time, ask yourself do you think this Tbills compounding will beat the drop in naira over this period? Do you think the naira will get stronger relative to the dollar?

I can imagine the look on the faces of those compounding Tbills for a while when Naira dropped from 160 naira to a dollar to 500 naira to a dollar, almost made all their gains insignificant. Yes, it corrected back to 362... but know what happened to their buying power? It was destroyed.

Like I said in the beginning, being rich is relative. Of course people who did Tbills were far better off than people who don't invest in anything at all (many Nigerians), but they too were affected and their wealth affected too. Wealth is all about buying power, there is a favorite saying, if you can't buy something 5 times you can't afford it. So that means someone who had a million before could buy a laptop worth 200K 5 times. He can afford it, but the moment that laptop increases by just 10% (220k), he can't afford it again.

That's why I advise people to diversify. Tbills is good but it's not enough. Especially in the type of country we are in...

arena07:
please elaborate on what u mean by it can be swallowed by inflation?

If the rate of inflation is greater than the interest paid on Tbills, you are loosing money. Though you are still better off than people who don't invest their money at all.

People have a wrong misconception about what Treasury Bills are. Yes they are low risk and have low returns and can be swallowed by inflation etc, blah blah blah... but then again, I feel it's something you can leave your money in while you figure out what business to put your money in. You just don't think of a business and start it that day, it takes planning.

A friend of mine who had 10 million naira last 2 years asked me what he should invest in... I told him Treasury Bills, he laughed at the rate. Said he would find a better business... he is still looking for a good business till today and that money is now less than 5 million naira. Lol.

By my calculations we all know how much he would have had now with roll over advantages in Tbills.

Nuff said, it's not like Tbills will make you rich, but then again...

zamirikpo:
Run for ur life, they want to harvest ur lifetime savings.

Lol. Hahahahahhaha.

This insurance people though.

maishai:
Oga pls open a thread and educate us on how to go about it legallyand peacefull without leaving the shores of the country

Lol. Una funny, you are running to where the American Youths are leaving.

If you want to hedge against the naira, this means you are hedging against the US dollars and other global fiats in the grand scheme of things. Overpriced US equities won't help you.

Go study Cryptocurrencies. That is the best hedge out there.

Indigbo:
10m breathing in my account. Lock in the whole 10m on Treasury Bills or 10m on Mutual funds, or 5m to Mutual funds and 5m to Treasury Bills!? Which is more safer/ better with more interest?

Depends on how and when you will need part of the cash. If you would need any part of the cash anytime soon, do a Money market fund, but if you leave the money for a long time, you can do Treasury bills.

jidobaba:
I've always had some small value gestating in my btc wallets but I don't know that I believe the hype anymore. Apart from the fact that you need to be reasonably geeky to properly secure your wallet, the stability of fiat is never there.
I remember something about investment in foreign(US/European) markets here on nairaland. But it will probably not be worth the effort.

Cryptocurrencies are like the getaway stash, you can't beat that when all shît hits the fan

You have raised really solid points. I once also tried to invest in the foreign (US/Euro) market, but the wahala is much and the fees, I didn't like it.

Also cryptocurrencies has a lot of hype that it will do you good not to listen to, beware of hype or following trends, but the real tech and economic importance behind some of them like Bitcoin and co, are very significant especially in line with companies and banks cooking books and fighting inflation.

As for securing your wallet, will advise you to use a hardware wallet like Ledger Nano S or Trezor.

And finally, for me cryptocurrencies are not really an investment. They are a kind of hedge or insurance against something bad happening to my naira assets from stocks to Tbills to Mutual funds or my bank account or a hedge against global currency crisis. The problem is there are a lot of speculators in the game causing volatile prices.


Nice discussing with you.

LadyBeee:
and wait for one full year to get back my money? That's crazy! What if I happen to have an urgent project later

You can always try money market funds.

For all those here who invest in Money Market fund, why do you do so? Don't you get tempted to do Treasury bills?

As for me, I do Money market because I like the liquidity. The idea that I can remove my cash anytime after the first month is really appealing.

NL1960:
I do not know o. Do not also forget that the CBN and NDIC also regularly examine these banks.

Cast your mind back to the time of the stock market bubble where companies were well packaged when they are about to come out for public offers. That was when you will see a stock gaining the maximum percentage on a daily basis even without any new information about the company. No be today dem dey 'cook' books for Nigeria.

CBN is basically the government, I am not surprised about such incompetence, but audit firms are a different issue, the repercussions could be great. Anyway, will still research it. If this is true, a very powerful article can come out on it.

Agbalowomeri:
First I commend your good writing style; may be you did some journalism
Second you said everything is about perspective, I agree
Which do you think is easier; reading a graph and knowing the intrinsic value of a coy (which is what you claim you do)?: again it's perspective
I don't think it takes as much time to do a TA compared to FA; again my opinion
As long as it works for you and as long as it meets your investment objective, ride on
As for me, I need to maximise all arsenals
And I know TA has improved my efficiency significantly
Also Gut-A is not to be neglected. People were here shouting Aiico's H2 results, we know the true story. So many falsification of results going on in NSE except few companies with good corporate governance. How do we then determine the intrinsic value of a coy with false results?

Well said man. Well said. Someone just threw something similar at me in the Treasury bill section and I will admit, it's scary.

As for your question, How do we then determine the intrinsic value of a coy with false results?, well... I don't know. Visit the company? Hire your own auditors? (Sounds every expensive), pray and ask God? (Loool), get insiders info? (Hmmn.. sounds illegal and something the SEC might frown on especially if you sell and buy stocks with such info), it is hard... to be honest, and scary. All I can say is hedge against that risk.


Some companies do cook books, and there is a possibility some trusted auditing firms went along with this. This is a very bad twist and really sad due to the kind of country we are in, integrity is a rare virtue.

With that said, I am not strongly against your method nor strongly for FA, but I believe in an overall perspective and you have said it all. So my brother, if it works for you, keep up with it.

Now for those still scared of book cooking and overall trust and integrity. It is advisable to hedge your investment. Cryptocurrencies have a bad rep, but to me they still have a place. They are very speculative, but one thing they have over most of the financial assets we hold is they are trust less.

It will be naive to think even big companies do not cook books, even this has happened in the US. So many big banks have closed. One of the founders of SEC or so was involved in a Ponzi scheme (can't remember the true story). So if you are scared of trusting companies and banks fully, put a lil money in cryptocurrencies (good ones).

Why do I advise this? Because if you keep worrying about book cooking, then the obvious thing to do is not to invest. But if you are like me, lol, I am sure you will still want to inves, but you need to create a kind of hedge or insurance for that investment. If info comes out about a kind of legit company involved in something very scandalous and ponzi like or book cooking, trust me, trust less systems will shoot up in value. With that said, just hedge and relax.

And yes, you all should be wary of book cooking. It is serious. So prepare for it (it's not a must you follow my crypto way).

Oh! and... Thanks for the compliment.

DeRuggedProf:

Those whose village People have developed immunity to VCV (VeeCoVee).

Hahahahaha.

NL1960:
Are you sure?. Who were the auditors of the several banks that had failed and collapsed?. Who pays the auditing firms?. CBN or NDIC or the Banks they are auditing?. He who pays the piper dictates the tune.

Are you saying the big 4 were involved in auditing those banks? If it is as you say then we can as well just remove all our money from all banks, bonds, Tbills, money market funds and the stock market and put it in Bitcoin as it's trust less. Though I will need to do this research, because this is a very scary thought. Something many people are not thinking about.

NL1960:
You have seen their real books or their 'cooked' books?.

Hahahaha. Honestly I don't know. I will need to verify who their auditors are though. I trust the big 4 than most other audit firms, not saying they are perfect but at least we can be sure they won't be as foolish to go overboard with their book cooking.

yinkaoke:
Thanks a lot for this its a caution and made more sense. Like i said earlier I am doing my due diligence on a few proved ones owned by Banks and multinationals.

One of the Logic of every business is that you invest fewer sum in an unknown/risk territory that you have done lots of research on but there are not further data for further research as such you test the waters with fewer resources of less value.

Ever read who move my cheese, I am an investor in that light of wisdom.

Once again many thanks for your wisdom.

Perfect. If you are doing your due diligence and testing the waters, I am sure you will be very okay. Happy weekend, and UWC.

Deadlytruth:
Could you kindly explain how you yourself would ever make profit in the stock market if everyone does these two things you accused them of failing to do at the two bolded?

I am sincerely interested in the explanation because we seem to be fast approaching the era where everyone will start following these two pieces of advice very strictly and a lot of us will just have to go back to the village.
Please do explain. Thanks.

It's simple. And I will use an analogy story.

So I had been in the cryptocurrency world for a while, I entered after the last Bitcoin crash. Things were kinda slow and sideways for a while, then before we knew what was happening, ICO's (Initial coin offering almost like IPO's) came, money started flowing in fast. There were Airdrops (free crypto) etc, and I noticed more people started coming in. CNBC and all news channel were talking about cryptocurrencies. Before we could blink Bitcoin moved from 1K to 5k to 10k to 15K and then to 19K. I sold from 10K through 18K. Because to mine 1 bitcoin was an average of 6K, 18K for 1 BTC was not justified. Anyway, I looked at the history of cryptocurrencies, it was the same thing after euphoria and massive greed came the drought of the bear markets. First was the denial that it will keep going down in price, then there was the panic after a flash crash, then talks of Bitcoin is dead comes up, then massive fear, then multiple bounces and now sideways movements, which I suspect will go on for a while... before another bull market.

You might think I just described only the cryptocurrency world, but I just described the NSE 2016/2017 in perspective. This 2018/2019 ending might be the same thing, we are not sure, but what I know is this... when people are scared... you will see it when people are greedy you will see it. The problem is that it's hard to go against the trend. It's emotionally difficult.

Some people bragging about Bonanza will still crumble and sell when prices keep dropping. Don't catch a dropping knife they say, my question is no one knows when anything will be a dropping knife.

My strategy has always been simple, invest little amounts gradually during drops below what I feel is the intrinsic value of an asset.

Trust me there is a high chance it will keep dropping, that's none of your business. So far the business in question is a good business and is making money you believe is in line with it's intrinsic value, assets and debts inclusive... well you will be unto something.

It's not easy but investing can be that easy. The problem is many people over analyze, speculate and do unnecessary graph readings and mathematics. Makes me laugh all the time. That's time you would have spent making more money via a job or chilling with your girl, family, friends, going to the gym, sleeping or doing other things.


To summarize...

1. Investing should be simple, but it's not easy, meaning I have told you the process which sounds simple but it's not easy to implement.

2. Keep your emotions at bay. Do not follow the trends or what everyone is doing.

3. Most people shouting Bonanza will still panic and sell. That just shows that people have a limit. Even me. I have a limit that's why I invest in little chunks slowly.

4. Always think of the land perspective. If lands were sold like stocks on a computer screen, the market will act the same way as the stock market. I see the same thing in the cryptocurrency markets.

5. Always have emergency money to invest. Do not underestimate the power of a liquid money market fund.

6. Remember why you are investing. It's very easy to forget and see just numbers, but remembering those numbers means you own so and so amount of said business really helps.