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There is always that illusion that the best time to invest is when all the economic indicators are “perfect”. But if you look at last year’s data from the Nigerian stock exchange, Nigeria returned alpha moments in the stock market despite the paralysis in the land.
Factually, what moves the market is not usually the typicals. As we have seen in the US where the stock market is hitting new records even as inflation, housing prices, etc are not going the way many expect, people can make money anytime. With the wars in the Middle East and Eastern Europe, more money would be spent, and that is economic stimulation since the US is funding many of these wars. Period, the US is spending and companies will make money!
In Nigeria, I received the largest dividend for 2023 than I have ever since I loaded on the Nigerian stocks as a first year banker in Diamond Bank (those investments due to currency losses, inflation, etc seem sub-optimal now, but they still pay dividends). Yes, the all share index (Nigeria’s NGX) was up by more than 75 %!
Rethink how you see investments. In a financialized world, the real economy does not have to be balanced for governments to allow you to make money, because they’re afraid that the visible indicator of wealth must not be seen as faltering. So, even in the highly inflated Europe with everything down, stock markets are hitting new HIGHs.
You must make your money work for you; talk to your banker or someone who understands money, and stop thinking that you can labour yourself to financial stability. Governments have financialized the world, and investors are their adopted babies!
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For the sorry state of Nigeria’s economy, we may have to invest differently, to give more of our people a chance to make money. If we load everything in the financial markets, poverty will continue to scale here. We will have to be brave enough to put money in the real economy, from funding SMEs to manufacturing entities. It’s something we just have to do, else those already with money will continue to amass more, while the rest will be completely cut off.
We are in very difficult situation already, and the temptation to do what is easier and lucrative is huge, but we have to look beyond that.
It’s like we are fighting a sophisticated war with sticks and bare hands, so much unconventional thinking and action will be required.