Category: Investment 101

For smart investors only…

2017 was an eventful year for many. While the nation struggled to climb out of the muddy waters of recession and inflation, majority focused on getting. A few, however, discovered opportunities to thrive amidst the difficulties. Whatever side of the divide you belong, congratulations are in order, because you made it through and have now been presented with another chance.

Already, 2018 is proving to be quite a package. January is barely over and we have witnessed the recurring inconvenience of petrol scarcity, the buy-over of communication giants, the increasing popularity of cryptocurrencies and a host of other occurrences. All these coloured with the usual shenanigans of a pre-election year. Never the less, the year appears to be quite promising financially, particularly for those who are able to identify and latch on to opportunities.

Back to the Farm

For instance, avenues for wealth abound in the agricultural sector as attention is gradually shifting to agriculture as a source of national revenue. Investors who are savvy might reap bountiful returns in that sector. For palm oil companies in particular, we expect positive earnings growth in 2018 driven by a recovery in sales volume as we foresee subdued domestic prices over the year.

Going Up and Up

Also, reports of steady crude production and uptrend in crude prices allow for general optimism that the year ahead would be brighter than 2017 as these factors combined would drive further growth in the nation’s foreign reserves and fiscal revenues. This already suggests currency stability and higher economic growth in 2018.

Dollar Good. Naira Better.

Regarding opportunities in the stock market, we see value in the financial sector, particularly tier 2 banks. Earnings recovery is expected for those banks in 2018 as the general macroeconomic environment improves. Also, compared to their peers, the banks are undervalued which informs our view of sizable upside potential. Moving over to consumer stocks, there is strong prospect for even better earnings in 2018 because of the improved dollar liquidity which bodes well for expansion in profitability margins, and lower interest rate would drive a moderation in interest expense. For fixed income, the ongoing monetary easing, stability in currency and expected tamer inflation guides to lower yields on average in 2018 which would drive slower activities within the market.

Look out!

As always, there is still need to thread in caution as electioneering is often accompanied by complications. The slightest indication of a likely change in leadership could adversely affect investor interest. We however believe the excitement over growing reserves and improving economic growth will outweigh this concerns and drive activity, particularly for equities, at least in the first half of the year. In addition, despite the rally in equities in the prior year, our market remains undervalued when compared to emerging markets peers which should attract foreign investors with the stability in our currency ensuring this possibility.

Let’s Help You

One thing that will work for you this year is staying abreast of occurrences in the market. Fortunately for you, you can access real-time updates, market news and research on ARM Stocktrade. As long as you are trading on ARM Stocktrade, you shouldn’t go wrong.

We wish you a profitable 2018.

The post For smart investors only… appeared first on Realising Ambitions.

Source: Articles

Four things to consider before buying a company’s shares

When you buy a company’s shares, you buy into that company. You buy into both their assets and liabilities.  It is therefore wise to properly consider and research into the company before you invest your hard earned money.

If it is a reputable company, you will find information about their activities online. Factors like the profitability of their business activities, the likelihood of growth and expansion and their stake holder relations history are points to consider.

You should also look through their annual reports and financial statements. The pivotal points listed below should guide your decision making:

• Earnings: Consider the company’s earnings over a period of time. The number stated must always be higher than the previous year.
• Sales: The number stated here must also be higher than previous years. If they have not made more sales, their profitability and growth are in question.
• Debt: The number stated here must never be more than the stated assets. It must always be lower than the previous year as well.
• Equity: This refers to the value of shares offered by a company. This figure must always be higher than the year before.

If the company you are interested in scales through this four-point test, it is safe to invest in them. Your investment is likely to yield satisfactorily. Sign in to ARM Stocktrade and place your trade order.

The post Four things to consider before buying a company’s shares appeared first on Realising Ambitions.

Source: Articles

Personal Finance with Raphael- Is this a scam?

Frank moved to Canada some years ago, not long after his university education in Nigeria. He is doing very well in his career and would like to invest some of his money in Nigeria. A friend told him about a product that pays 30% monthly return on saved capital. Frank likes the high return idea but needs to be sure he is taking the right decision.

He never wants to get broke, and is scared of losing his hard-earned money.

How can Frank ensure investing in the product would be the right decision?

Happy New Year Everyone and welcome to our first edition in the new year; A good way to start the year is to help Frank understand how to identify the right investment instrument or product that would lead to a right decision.

Here we go:

1. Frank needs to confirm that the product is regulated. For instance; Banks are regulated by the Central Bank, while Asset Management Companies are regulated by the Securities and Exchange Commission. Therefore, the product and Issuers should be regulated.
2. The product should be advertised through different medium beyond word of mouth. If the product is not talked about on the radio, advertised in the newspapers or Television, seen on a bill board, then Frank needs to be wary of the opportunity.
3. What’s the total funds under management for the said product? Here’s another question that requires clarification. The Federal Government of Nigeria would always announce the amount they intend to raise via Treasury bills for instance, the ARM Money Fund is about N27m in size. If an investment product cannot provide this information then, Frank should be wary again.
4. What does the product invest the monies in? if the product cannot speak to this please take a walk.
5. Who are the people behind the product or the company? Frank needs to know the people behind this investment company or product. If Frank cannot check this box then, he should take a walk.
6. No legit product pays the same return periodically. Likewise, no legit business will do same. Take for example if you run a business you are not likely to make the same profit every time. Same applies to investing in a product. Even the Federal Government does not pay the same return on Treasury bills every time (check out the yield on Treasury bills a year ago and compare it to now). Therefore, Frank should not invest in any product that pays the same return every time.

If Frank can check all these 6 boxes then, he can go ahead with the investment opportunity. Otherwise, he needs to look elsewhere. These 6 boxes would guide Frank in taking the right investment decision with his hard-earned money in Nigeria and anywhere else in the world.

The post Personal Finance with Raphael- Is this a scam? appeared first on Realising Ambitions.

Source: Articles

Personal Finance with Raphael- Adewale needs help!

Adewale Richards a.k.a. Bobo, as fondly called by his friends works in a bank on Victoria Island. Like many other people who work on the Island, he lives on the mainland. Every working day, after work hours Adewale will typically hang out at a bar or restaurant around his work place till late in the night under the guise that he is waiting out the traffic on 3^rd mainland bridge. While hanging out, sometimes with friends, he spends between N3,000 and N10,000 daily, regardless of his bank balance or budget. Adewale has no savings whatsoever because he can’t see any surplus from his current pay package. At the end of most months, he is usually unable to give an account of what he spent as little as N5,000 on.  Therefore, he lives with the myth that he will soon ‘hammer’ or get some miraculous multiple promotion after which he can begin to save and plan for his numerous financial goals.

How can we help Adewale out of this situation?

Planning for one’s financial independence is inevitable. It’s not an option at any life cycle stage but a “MUST”. Adewale needs to identify his financial status by analysing his cash flow, income, and expenses. He needs to work with the budgeting tool. This tool will enable him to identify how he spends his hard-earned money and save him from his myth state. A budget would help him to put his funds to good use. Reality is that if you want financial security, budget is the only answer.

Setting up A Budget

Setting up a budget is very simple and friendly. All you need to do is write down how you intend to spend your income and stick to it. You state the amount you want to spend on each item. It helps you turn your finances around and begin to build wealth.

Importance of having a Budget

• A budget makes you identify your goals, keep track of your progress and make your dream a reality.
• Setting up a budget enables you to monitor how every dime made is spent to the extent that you don’t spend money that you don’t have. Thus, reduces one’s debt exposure. This would also help one to keep track of every spending.
• It helps you set up your emergency fund. Following the 50:30:20 rule; 50% of your income is spent on your budgeted fixed items, 30% on variable items and 20% on your savings. Should there be any unexpected event that calls for immediate spending you can look at items in your budget that can be reviewed or moved to the next month or period in order to cater for the emergency. Flexibility can be applied sometimes to your budget.
• It helps you cut unnecessary spending. It saves you from wasteful spending and impulse buying.
• It helps you prioritize your spending. You would spend money on the most important items.

The impact of a Budget on Adewale’s life style is that he would be able to identify the surplus in his current income level by making amends to his current expense and hanging out bills. Following the 50:30:20 rule would enable him have savings and finally he would be able to account for every dime that is earned…. And when he eventually “hammers”, with a budget he can efficiently manage the increase in income and build the sort of wealth that would provide him a financially secured future!

The post Personal Finance with Raphael- Adewale needs help! appeared first on Realising Ambitions.

Source: Articles

Bala and Audu met in NYSC. Both from the northern region of the country, compelled to serve their fatherland in faraway Ondo state, it was easy for them to become friends. They had a good year serving their country and even landed jobs in the same organisation. As similar as the young men were, they differed in their attitude to money.  Bala was somewhat future conscious, while Audu adopted a YOLO attitude (You Only Live Once). He wasn’t particularly wasteful, he just didn’t understand why he had to ‘manage’ because of a very distant tomorrow or a rainy day that might never come. So, he saved only when he could and focused on enjoying a good life. Bala on the other hand saved 20,000 of the 100,000 they both earned in a bank account. He later discovered the benefits of mutual funds and moved his bank balance to a Money Market Fund. To make it even easier, he set up a direct debit to his account and decided to focus on the 80,000 he had left and completely forget about his investment.

About four years later, the organisation they were employed with secured a choice estate and offered plots of land to interested staff at a subsidised rate. Ideally, the offer was not for staff at Bala’s level, who had barely worked for five years and were hardly earning so much. It was a huge surprise for Audu when Bala not only signified interest in the property but also conveniently paid for it without a loan. Apparently, investing 20,000 in a mutual fund every month made the difference. Over the past four years, Bala’s monthly 20,000 had grown into over 1,5000,000 and he could easily part with 950,000 for the plot of land.

Wondering how he managed to save so much from so little?

He had saved 20,000 in a bank account for 7 months before discovering the money market fund. He therefore began his mutual fund investment with 140,000 and made additional contributions of 20,000 monthly for four years, gaining an average of 14% interest annually which was reinvested on his behalf. Imagine how much Bala would have if he had continued his investment uninterrupted for another four years? About 3,900,000! Not convinced yet? Calculate it yourself here.

That gives you a peek into how much your money could be making for you daily, if you were investing.

Wondering how people build emergency funds or save enough to expand their business, buy property, and achieve other such feats? This is how. A fraction of your income invested appropriately at the right time can get you the future you desire. We calculate time in terms of our age and achievements, but hardly in terms of money. Yet, the passage of time can have an incredible impact on how much money we have. The truth is for every day you delay in actualising your decision to invest, you actually lose money.

Every day that passes is an opportunity passing you by. Make the most of time, put your money to work now. Explore our Webshop to better understand mutual funds and discover other investment opportunities. You can also engage us with your questions and enquiries on Facebook, Twitter, Instagram or LinkedIn. Or if you prefer you can reach out to us at [email protected] or 0700 CALL ARM.

The post How much are you losing? appeared first on Realising Ambitions.

Source: Blog

Personal Finance with Raphael- Amaka wants more…

Mr. and Mrs. Ojekwe taught their Children early in life to save money with the use of a piggy bank. Their second child, Amaka, who is now a 29-Year-old Banker, took to this habit and has now turned into a prudent saver. Amaka saves a certain percentage of her earnings in a traditional savings account monthly. At the beginning of every year, she always has a mental idea of what she wants to achieve with her hard-earned money and spends the savings meeting her financial goals as it crosses her mind in no order of priority. Now she’s bugged down with worries because something in her keeps telling her that she can do better with her savings and the achievement rate of her goals, but she does not know how!

What are financial goals?

Financial goals are objectives that you want to achieve with your Finances. They are personal goals that have financial cost attached to them. We have various financial goals at different stages in our lives. Just like everyone of us, Amaka has a lot of financial goals running through her mind and she needs to create a plan that would help her achieve these goals and ensure her money is working harder than it is currently doing.

How can Amaka get more?

The first thing Amaka needs to do is to identify and be clear on her goals. She needs to write down these goals. Her goals could be buying a car, creating an emergency fund, planning for her master degree abroad, paying her children school fees, paying for house rent, planning for vacation, buying groceries for the home etc.

Secondly, she should align each of these goals with the SMART acronym. SMART  being Specific (Specific and clear goal as much as possible), Measurable (measurable and quantifiable so that you know when you can achieve it), Achievable (attainable based on current facts and situations. Not on assumptions and conditions), Realistic (choose a goal that is realistic which is not a distant fantasy) and Time bound (have a clear timeframe in mind which would enable the achievement of your planned goals).

Thirdly, she needs to understand the significance of each goal and prioritise them appropriately. She needs to avoid all distractions in pursuit of the goals because it is not an easy task achieving financial goals. She needs to be disciplined even though she might not be able to achieve all her goals.

Finally, she should categorise her goals into short term goals (goals to achieve between 0-2years), medium term goals (goals to achieve between 2 -10years) and long-term goals (goals to achieve above 10years). She should save for her short-term goals with short term savings instrument, medium term goals with medium term savings instruments and long-term goals with long term savings instrument. Amaka put all her savings in a traditional savings account regardless of the tenure and priority. This would not maximise the potential growth of the savings towards the different categories of goals. Funds for short term goals should be invested in short term investment instruments such as savings account, money market fund, treasury bills etc. Funds for medium term goals should be invested in medium term investment instrument such as balanced mutual fund and money market fund while savings for long term goals should be invested in long term investment instruments such as stocks, equity based mutual funds and real estate. This break down of goals would ensure that the savings are working harder than just saving every money in one instrument.

We hope these steps would clear Amaka’s worries and make her desire towards achieving her financial goals an improved success.

The post Personal Finance with Raphael- Amaka wants more… appeared first on Realising Ambitions.

Source: Articles

Personal Finance with Raphael: Dele’s dilemma

Dele’s dilemma

Dele was one of the lucky few who got what could be termed a good job not long after NYSC. Initially, he felt well remunerated as his income could easily cater to his needs. Barely a year after he got married, he began to notice a strain on his finances. His financial goals were increasing, life was getting more demanding and his income was no longer adequate.   At first, he focused on getting a promotion at work in the hope that a bigger salary will fill the gap. But even after the promotion came, it seemed like his needs also increased with his income. He recently just got to know that his wife is pregnant with their second child, and he is more concerned about his finances than ever. Is there a way to make his money work for him? Dele needs help….

It is obvious Dele needs a second income source. His work is however too demanding to afford him time to pursue other businesses. His only option is to put the money he currently earns to work, he needs to ensure his money is working as hard as he does.

How do you get your money to work hard for you?

Making your money work hard for you requires a bit of Mathemathics. If you have a goal that would cost you N200,000 in 24 months but could only save N5,000 conveniently every month beginning from today, your total savings at the end of 24 months would become N120,000. So, the next question is at what interest rate per annum would these savings grow to N200,000 at the end of 24 months. That is N120,000 savings in 24 months at N5000 monthly should grow at the rate of X to achieve N200,000. What is X? X is 4.18% per annum. You need an instrument that would preserve the savings and grow at a minimum of X.

Solving Dele’s dilemma

The first thing Dele needs to do is to set his financial goals and be clear on them- he needs to be clear on what he wants to achieve. He can also set his financial goals according to preference for achievement. Secondly, he needs to ascertain his financial status. That means he needs to be clear on his Net worth (his total assets minus liabilities). This would provide him with a position of how much he can conveniently set aside to achieve his set goals. To achieve this position of being able to set some money aside he needs to make use of a budgeting tool to capture every penny that is earned and spent.

The third step of making his financial dream come true is to break down his numerous goals into short term (0-2 years goals), medium term (2-10years goals) and long term (>10years goals). At this stage, he also needs to get a detailed understanding or knowledge of the various financial instruments that are available as they are specifically structured for the different categories of goals listed above.

Stage four requires Dele to implement his conclusion on choice of investment in stage three. Otherwise, he would bear the cost of procrastination! The final stage requires that Dele does not go to sleep after investing his hard-earned money but ensures he monitors and reviews regularly. He should review his short-term goals monthly, medium term goals quarterly or half yearly while annual review for his long-term goals.

I guess we have been able to solve Dele’s puzzle. He can get back to work and rest assured that his hard-earned money is working as hard as he does, and his growing financial goals are consistently achieved.

The post Personal Finance with Raphael: Dele’s dilemma appeared first on Realising Ambitions.

Source: Articles

How We should think about money- Busting Money Myths (2)

In the previous edition, we discussed popular money myths that have governed our financial philosophy and hampered our desire for financial freedom.

It is important to realise that money is basically a tool and the results it yields depend largely on how we use it.  Financial decisions, little or great, must be well informed and thought-out, factoring the future, near and far. By taking control of your finances, you can work towards financial freedom, regardless of your background or status. The following are critical factors to consider in shaping our philosophy about money and positioning ourselves for financial growth.

• How many income sources do you have?

You need to have revenue before considering financial growth. The first key factor to consider is your income source. How consistent is your income? Are there opportunities for extra income worth pursuing? An extra income source is always a plus on the journey to financial freedom.

• Are you living above your means?

If you are spending as much as you are earning, you are living above your means. To attain financial freedom, you need to segment your revenue to leave room for savings alongside catering to your needs. Warren Buffet advices that we spend only what is left after we have saved.

• Do you have achievable financial goals?

What are your financial goals? To buy your own home or raise capital to start your business? Whatever it is, ensure that your goals are SMART – Specific, Measurable, Attainable, Realistic and Timely. It is also wise to have a trackable plan towards achieving your goals.

• Do you have a financial plan?

Everyone should have a financial plan, both short term and long term. A financial plan helps you manage your finance by giving you a clear picture of what you have, what you need and what you will do to get what you need. If you require further knowledge about financial plans and how to create one, contact us to speak to a professional financial adviser.

• What is your attitude to debt?

Except in situations where it is tactical and strategic (for the purchase of an asset), borrowing is often a pit as it deducts from your future revenue before it even arrives. As much as possible, work towards managing your finances without resorting to loan, especially personal loans.

• What is your attitude to investments?

Savings is good and is essential for anyone pursuing financial freedom. Investments are however one step ahead of savings your money is not only preserved but also grown. Depending on your risk appetite, financial plans and goal, invest in asset classes comfortable for you.  You could consider treasury bills, stocks, bonds, mutual funds or even real estate.

• What is your retirement plan?

It is never too early to start preparing for retirement, especially if you hope to retire rich. Setting aside a sum every month to your pension is an investment in the future. Where possible, consider Additional Voluntary Contributions for increased retirement savings and reduced tax load.

• Are you covered?

As you advance in life, financially and otherwise, it is important to consider insurance options available to you. Insurance helps guide against unnecessary loss in the face of unplanned circumstances and ensures our families are protected, should anything happen to us. As your assets and wealth increase, estate planning is an option you should consider. Wills, Trusts, and other estate planning instruments leave your assets and loved ones protected without hampering the growth of your investment.

Conclusively, financial freedom is attainable and worth striving for. Give it a try this new year, change your orientation about money and choose to become the master of your money, deliberately putting it to use. You will be amazed at the growth you will record as the year progresses.

Should you require further information, write to us at [email protected] or connect with us on social media- Facebook, Twitter, and LinkedIn. You can also call 0700 CALLARM (0700 2255 276) or visit our Investment Center nearest to you.

The post How We should think about money- Busting Money Myths (2) appeared first on Realising Ambitions.

Source: Articles