Experts in the financial sector have emphasised the need for diversification of investment portfolio as measures to guard against economic downturn.
They also urged people to lean towards foreign dominated securities to safeguard investments against Naira depreciation.
This was disclosed at Moneyrise conference 2022, titled: ‘How to invest safely and successfully in 2022’ organised by Risevest, over the weekend in Lagos.
Vice President, Energy Investment, Platform Capital, Dalu Akabogu, on the economic outlook for 2022, projected high inflation for the year.
He noted that for the first time in about 30 years, the highest inflation in the U.S. has occurred and whatever happens in the U.S. trickles down to other countries.
He also called on people to embark on safe investments, saying, “If you are investing and investing for a long term, I think that’s a better position to take. If you want to take a short term horizon to invest this year, you probably won’t get all the benefits.”
He added that more stocks would be undervalued this year, but added that it is a great opportunity to also invest in them.
Founder, Wealthmotley, Solafunmi Oyeneye, said though things are expected to get bad, it is the best time for investments.
She however added that one could add Exchange Traded Funds (ETFs) to their stock portfolio.
She urged people to embark on diligent research before making any investments.
“Break down your investments into portions so you can spread it across various sectors. You need to understand the various classes, the risk involved and know how to apportion the finances. Know your risk threshold and adjust accordingly,” Oyeneye said.
Chief Executive Officer, Risevest, Eke Urum, speaking on identifying worthy investment, said one should look out for offers that are feasible.
“Draw a line between the returns you are offered and the economic reality that generates that return to know if its a feasible investment.”
He explained that Risevest is always willing to answer questions from her clients and show records of all they invest in and how they work.
Urum on crypto investments said that the company aims to include crypto investments but based on Nigerian regulations would be unable to offer such services to Nigerians for now.
He, however, added that the company is looking to add crypto to other users not based in Nigeria.
Chief Strategist, Parthian Securities Limited, Ahmed Banu, explained that global inflation is a result of excess flow of money given out by central banks due to the pandemic.
“When there is money, there is demand and when there is demand, prices rise,” he said.
He added that when inflation is rising, the best way to curb it is to increase interest rates.
“There are already predictions that interest rates in U.S., which were as low as one per cent for instance, would go up to about seven per cent before the end of the year.
“It means that if interest rates get to 10 per cent higher, everyone is playing safe, holding on yo cash in anticipation of higher interest rates, when that happens people will invest in fixed income instruments,” Banu noted.
The conference focused on how to identify and avoid unsustainable investment schemes, how to set proper expectations around investments and most importantly, how to identify and take advantage of emerging investment opportunities this year, key trends and innovations in the wealth management space, and what people should start paying attention to in the new year.
