₦airaland Forum

ernie4life:
What to invest. 

In selecting what to invest, lots of factors need to be considered like
Capital
Market etc
Some people jump into Nairaland and start asking for advice on where to invest xxxxx amount of money. If you ask me I will say it's a wrong approach, why wrong is it a wrong approach? It's because you don't know how reliable the advice you get is, truth be told there are lots of fraudsters in Nairaland, some don't qualify to give you advice because the know nothing about investments. 
      Let me give you a better approach, first it's always advised to start small when starting a new investment, the reason for this is because at that stage you don't have an established market for your product and you don't know how consumers will react to your product / service. So look for something you could start small and then with time you grow. 
   Look for something that the raw materials / skills are available here in nigeria.
 Do your own personal survey to see if the product is saleable or look for a product/ service you know people will need.

     Then lastly I always advice people to invest in things the enjoy doing,! Yes what you enjoy doing! You may ask why and my answer is you love and passion will be a good source of motivation to push you to go the extra mile in it. 

" it's not what you do but how you do it that matters" 

There is virtually no investment that can not make you wealthy it's all about having a vision. 
 You could also Google up on investments that need small capital to setup or read through business journals/ news papers or publications you will definitely find something that will catch your eye. It is only when you've made up your mind on what you want to invest in that you can go into social media and ask for tips on how to go about it.
 Disclaimer : Am not disputing the fact that there are other factors that could also be considered when choosing where to invest but I believe the above mentioned stand out. 

I will stop here for now, I will appreciate comments, questions etc before I move into the next one

ernie4life:
Investment savings is all about investing small amount continuously and simultaneously into low risk investments like mutual funds that have guaranteed interest rates, that's where KGIF comes in, it's a Mutual fund that guarantees 12% interest and capital, there are other guaranteed mutual funds like ARM and FBN. Go to mutual funds thread to read more on mutual funds and its features.
Investment savings in not only restricted to mutual funds, you could also buy dollars or Gold which is more stable than naira, the essence of investment savings is to make your cash not so easily accessible so you could accumulate as much as you need, please don't go into stocks when doing investment savings because stocks are high risk investments.

Saving scheme is all about a contributory scheme where u agree to keep contributing a particular amount every month for usually a year, and at the end of the year you can collect every thing you've contributed plus interest , this service is offered by financial institutions like insurance houses or asset management houses but I won't advice you do it with an insurance firm because any month you dont contribute you may lose all you've contributed so far, but with non insurance firms your money is guaranteed no matter what.
The beauty of saving scheme is that your money is far from your account and ATM so your spending is much more controlled and in some cases you could give a standing instructions to that every month the amount you want to contribute will move out of your account to your savings scheme account.


I hope I have explained all

ernie4life:
Kakawa guaranteed income fund

IdiAmin1:
Some silly abok*is are meddling with issues of world politics. What do we have to gain from Palestine? Why didn't they condemn Gowon or Britain for not recognising Biafra? Weren't Biafrans agitating for sovereignty too? Religious-confused 1diats

Ssdigest21:
well, i will advise you to invest on Money mutual fund and you are sure of getting 3.135/5 percentage every month......

ernie4life:
Continuation...............

Managers can charge fees ranging from 2% – 5% of the Value of the Portfolio. Take note at times the funds make more money than expected and in such instance the fund manager makes more money and still pays you the agreed rate with a little on top. 

The post above and its ensuing comments, if any, is purely the opinion of the writer. It therefore should never be considered as an investment advise of any sort. If required, readers should please consult a competent professional financial adviser for any investment decision.

Am compiling a list of mutual funds available in nigeria, there rates, there fund managers and there tax implications. Expect it soon

ernie4life:
What is a Mutual Fund?
A mutual fund can be defined is an entity that pools cash from a variety of investors for the sole purposeof investing the cash in shares, bonds, treasury bills etc (all together called a portfolio of investments). The profit derived from the diversified pool of investments are shared to investors in the funds annually or semi annually or as stipulated in the fund prospectus.

Who Operates a Mutual Fund?
Mutual Funds are operated by professional investment firms made up of people who are savvy with the money and capital market. Mutual Fund, like in Nigeria can be operated by the Investment arm of banks, stock brokerage firms, investment banks etc.

How is it different from a stockbroking firm?
A stockbroking firm is simply a company that onyour behalfand instruction uses its license to buy and/or sell shares on the stock market. With a stockbrokerage firm you give them an instruction to buy or sell shares of your choice. You also keep tabs of the performance of your stocks on a daily basis and monitor its performance independently. For a Mutual Fund however, they determine which Investment decisions to make rather than you givinginstruction as to what shares should be bought for you or which you intend to sell. The shares you buy with the Mutual Fund is that of the fund and not that of the companies quoted on the stock exchange or indeed any quoted investments.

Do they only invest in stocks?
Off course not. Mutual Funds mainly invest in broad and diversified pool of investments. However these can be grouped into two;
A –  Money Market
B – Capital Markets
Money Market-
 Example of Money Market  instruments are Treasury Bills, Certificate of Deposits, Commercial Paper etc. These instruments are mostly debt note with a promise to pay a stipulated interest rates and the principal at a predetermined date.
Capital Markets
– Capital Markets are markets where Bonds, Stocks (Shares) are traded on a daily basis. So, a Mutual Fund can also use your money to invest in stocks and bonds. For example, when they invest in shares they hope that the value will appreciate thus increase the value of their fund or making them a nice profit when they sell the shares.But please note, most mutual funds usually outline the type of investments they hope to invest your money in. This can be found in their prospectus.

Do All Mutual Funds invest in the same categories of funds?
There are mainly 3 categories of funds they typically invest in. Fixed Income Funds – These are funds that are meant mostly to invest in fixed income securities. Fixed Income Securities are investments that pay a fixed return on an investment. For example, treasurybills offered by the Government are issued at a coupon (rate) of say 10%pa. Meaning, they pay an interest of 10% on any amount invested. Mutual Funds that are Fixed Income Related look out for safe investments that can guarantee a good incomestream. They mostly suited for investors with a long term view towards returns. Fixed Income Funds are safe investments as it mostly involves securities in government securities. Due to the nature of government securities their returns are typically low.II. Equity Funds – These are Mutual Funds that invest mostly in stocks and shares of companies are quoted. Some funds can also use fund assets tosubscribe shares for private placements. Equity Funds offer high returns but are associated with high risk.III. Mixed Income Funds – Mixed Income funds are a hybrid of Equity Funds and Fixed Income Funds. Because of their diversified nature, they often offer low risk for investors. Low risk as usual is associated with low returns.

Why Should I even Invest in them?
Mutual Funds afford people who do not have the time to invest in the money and capital market or do not know much about the business of buying and selling securities an opportunity to invest and make money. It also gives them an opportunity to save for the futre. By investing in mutual funds you have an opportunity of investing in a portfolio of heterogeneous instruments rather than having your money in just one basket. For example, your N100k investment in a single mutual fund can represent aninvestment in bonds, stocks, treasury bills etc.

How Much Can I Give them?
Mutual Funds typically have an investment band depending on the nature of the fund. Some can be as low as a minimum of N5,000, whilst some can be N100,000 and others N1,000,000.

Is it Profitable?
Like a every other business Mutual Funds are also exposed to the same risk and rewards that can determine whether they make or loose money. But since no business originally sets out to loose moneythey will often tell you that they are profitable. However, you can know how profitable a mutual fund is or can be if the fund owners already have a history. Most of the managers already have experience in running funds and so must have track records of their performance in the past. It is also important that you look at what type of returns they intend to offer to their investors.

What kind of returns can I expect?
This depends on the your risk appetite. For example,if you have N100k and think you can invest it in any business of your choice and get a profit of N20%, then investing in a mutual fund that promises 14% returns may not be a good idea for you. The return a mutual fund promises you should also be comparedto returns one can get on risk free investments suchas treasury bills etc. For example, if a Mutual Fund promises a minimum return of 12%pa and Government Pays interest of 14% on Treasury Bills, then investing yourself may just be a better idea. In general mutual funds will typically offer minimum returns that are benchmarked above inflation rates.

Are my returns tax free?
It depends on the mutual funds you are investing, some are tax free while others are not. Do before investing on mutual funds find out if it tax free or not and compare the benchmark rate the are giving you with the tax.

What are open and closed mutual funds?
Open Ended Mutual Fundsare funds that are open to continuous issuance of shares to investors. Operators of the fund continue to issue shares to the public to buy into the fund. Investors in the fund who do not wish to participate any further will simply resell their shares to the fund at the subsisting Net Asset Value. They can also reinvest in the funds whenever they want. Some Open Ended Funds also mandate you to keep your money with them for a specified period of time before you can sell or request for your money back. Open Funds arevery common.
Closed Ended fundson the other hand are funds that have limited number of shares that are sold at the initial public offering (IPO). Once the IPO is over, the fund closes sale of its shares to the public. Being a regulated fund, the shares are traded on the stock exchange like the shares of any quoted company. So, if an Investor decides he want his money back he will simply put up his shares for sale. The share price of a closed fund are determined by both the Value of the Portfolio as wellas the sentiments of investors towards demand andsupply. This is unlike the Open Funds that are determined by simply dividing the value of the portfolio by the number of shares issues by the fund.

Which is best for me?
This is a matter of personal choice and risk appetite. Closed Ended Funds are regulated by the Securities and Exchange Commission as well as theNSE. They play by the rules set by the regulatory authorities. Their share price are also published daily on the pages of Newspapers and can also be found on the internet. Open Funds are mostly unregulated and are not traded on the floor of the stock exchange. They are mostly floated by reputable organisations with a track record for performance.

What is in it for the fund managers?
Fund Managers are in it for the fees they charge you for helping you invest your money. They sometimes charge you fees upfront when you invest and also charge you a fee when they make a profit on your investment. Remember, profits are declared after deducting from revenue, cost of investments, statutory expenses, taxes, etc. Managers can charge fees ranging from 2%

freebreezeyz:
setup and registered my Wife's catering outfit; added very valuable IT skills to my knowledge; gained valuable experience in Logistics and organisation of different kinds of seminars/conferences/occasions.......Above all, I got a peice of land barely 1 year ago for 550k and its worth 1.5M now and still appreciating..GOD HOWEVER AND D DRIVE TO MAKE HEAVEN IS TOPPING IT ALL....

aare07:
Islam is PEACE
Muslims are not terrorist
Therefore, BOKO HARAM are not Muslim

malawi101:
He waz my jnr in skoo. I punish am tire. Fetches water 4 me every day.

hardywaltz:
Thank God the greedy Pastorprenure is finally been made to pay for his sins..

quomo:
They are fraudsters. I heard of someone who was defrauded recently by these guys