Airtime

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The i-invest app allows you to pay for utilities like Never run out of airtime or internet data with i-invest. You can buy airtime with ease on the i-invest app, just make sure you have updated your BVN App and you can pay with your wallet.

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Bill Payments

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The i-invest app allows you to pay for utilities like electricity and cable bills without any stress, you can simply fill in your details on the app, link your card and pay for the service without any stress. Stay connected with i-invest.

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Growth Vs Value Investing

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There are two investing styles: value and growth. Growth investors invest in companies that offer strong earnings increase while value investors, on the other hand, invest in stocks that are undervalued in the marketplace. Worthy of note, however is the fact that these two investment styles complement each other as they both help diversify your portfolio.

Value Investing

Value investors buy stocks that are under-priced, perhaps due to a media management crisis, or product malfunction, either within a specific industry or the broader market. They bet on the fact that the price will rebound due to a predicted change in the company’s image.

These stocks have low price-to-earnings ratios (a company valuation metric) and high dividend yields (what a company pays in dividends relative to its share price).

Principles of Value Investing

Invest in businesses, not stocks

Value investors tend to ignore new trends in stock prices and other market speculations. Instead, they look at the fundamentals of the company that the stock represents.

Only invest in companies you understand

Value investors typically avoid investing in companies they do not have adequate information about.

Love the business you buy into

More than being a source of expected earnings, value investors do not pick a stock based on surface market research. They love the business and fully understand its values and direction.

Do not worry about diversification

If a value investor wants to invest more capital, the aim is often not to diversity but finding investment plans that are better than the ones they already own.

Ignore the market

Value investors approach buying stocks like buying businesses, so they hold on to them for as long as the companies’ fundamentals are strong.

Growth Investing

Growth investors invest in companies that have recorded recent better-than-average rise in earnings and are expected to continue delivering high levels of profit increase. Considering that this is not guaranteed, it is therefore a risky type of investment.

What to know before investing

Invest in hot sectors

One way growth investors approach investing is to invest in stocks, and mutual funds based on specific sectors and industries that produce above-average returns for publicly traded companies.

Understand the company’s earnings

Growth investors try to understand a company’s net and historical earnings because it can provide insight on the chances of the company generating higher future earnings.

The price-to-earnings ratio.

This is important for growth investors who are trying to compare companies that operate in the same industry. The higher the P/E ratio, the greater the risk investors are willing to take on a company because of its expected earnings and growth.

The price-to-book ratio

This is used by growth investors to compare a company’s book value to its market value as this comparison can indicate whether a stock is undervalued or overvalued.

High-risk growth investments

Growth investing is high-risk, so it is often not recommended for investors with a low-risk appetite. It is best suited for investors who are looking for maximum profits within a relatively short time frame and have enough investment capital to sustain them during possible periods of dips.

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Before You make that call

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Warren Buffet once said, “If you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes.” While this might seem like an extreme recommendation, many financial experts believe that the goal for stock investments should be to hold them for as long as possible.

The possibility of making money from stocks is hinged on two factors: buying at the right time and selling at the right time. If you are trying to make profit, it is important to execute both decisions correctly.

Why You Shouldn’t Sell Your Stocks just yet.

Market downturns are great buying opportunities

On days when the stock market takes a beating, investors are encouraged to focus on what they could be buying. A market plunge creates room for stocks to become cheaper.

The market is resilient

The market may fluctuate up and down, but in the long term it will always move up.

When to sell

When deciding to sell your stock, it is important to weigh the decision within two lenses: the intrinsic and extrinsic reasons. Intrinsic reasons are reasons that are related to the stock itself and/or the markets while the extrinsic reasons are related to the investor’s finances or lifestyle.

Intrinsic Reasons

When a stock reaches your price target

Once a stock reaches a level that an investor had projected as their point to sell, then it is advisable to consider selling part or all their position.

When a stock trades at a technical inflection point

 When a stock trades near and breaks below a multiyear low, it often means there are additional losses in the horizon. In this case, it is advisable to sell the stock as soon as the technical level is breached.

When a company’s fundamentals deteriorate

It is possible for a stock’s fundamentals to deteriorate for any number of reasons like slow earnings or revenue growth, increased competition or reduction in valuation. In such cases because it is difficult for the investor to determine whether the deterioration is temporary or permanent, it is advisable to sell and exit the position first before re-evaluation.

Extrinsic Reasons to Sell

Financial reasons

One justifiable reason for an investor to sell their stocks is if they need cash for a competing investment, such as real estate.

Lifestyle reasons

Lifestyle changes also provide good reasons to sell a stock. A younger investor might sell part of or all their portfolio to put a down payment on a house, while parent investors may also sell stocks to finance their children’s education.

Tip

i-invest makes it very easy to invest in equities on the Nigeria Exchange Limited, click here  to find out more.


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Income Investing

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Income investing is an investment strategy which involves creating an investment portfolio designed to generate regular income. The goal is often to have a portfolio of safe and secure investments that guarantee stability.

The founding concept of Income Investing is to ensure that an investor gets passive income from buying investment instruments such as securities and assets like dividend-paying stocks, bond yields, and interest payments.

Things to consider before becoming an income investor

Diversification is key

Having multiple income streams will help your portfolio deliver income across different market conditions.

The higher the yield, the higher the risk

Higher yielding assets tend to have more risk for investors willing to invest in them.

The impact of inflation

To avoid inflation affecting the real value of an income portfolio, it is advisable to have a balance between income and growth assets in your portfolio. Tip Read about Growth and value investing 

Total return matters

Robust Income portfolios tend to have a good balance of capital stability and income growth. This will help you to maintain and grow your capital base, which also helps increase the level of real income that you receive.


Income investing options

Property

Property offers income through direct investment in a buy-to-let house or flat but also through property funds. In both cases, rents can be raised in line with inflation.

Equities

By investing in equities, investors back companies with potential to pay out significant dividends to shareholders. It is advisable to invest in companies which have a track record of growing profits and improving on dividend payments. Read about equities on i-invest here

Government securities: Bonds offer a fixed income from money loaned to the government or companies who need to raise cash for their operations. Also read Treasury Bills and Eurobonds 


Advantages of income investing

Supplements fixed income

Income investing is a great way of earning additional support income out of assets one owns, which can be used for daily spending needs.

Potential capital stock growth. Income investing offers the potential for capital stock growth in the long term, which can help build wealth.

Reduces portfolio risk. In most cases, the prices of income investments generally do not move in tandem with other asset classes, so they help spread your risk.

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Before You Sell Your Stocks

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Warren Buffet, regarded as one of the world’s most influential investor, once said, “If you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes.” While this might seem like an extreme recommendation, many financial experts have asserted that the goal for stock investments should be to hold them for as long as possible.

The possibility of making money from stocks is hinged on two factors: buying at the right time and selling at the right time. For profit, it is important to execute both decisions correctly. Compared to selling, which is a difficult decision to make, buying of stocks is relatively easy.

The reason for this is because, if investor sell too early and the stock goes higher, they risk making inadequate profit. If they sell too late and the stock plunges, they miss out on opportunities to make more profit.

Why You Shouldn’t Sell Your Stocks.

Market downturns are great buying opportunities. On days when the stock market takes a beating, rather than mope about the loss, investors are encouraged to focus on what they could be buying. A market plunge or creates room for stocks to become cheaper.

The market is resilient. In the words of Tenpao Lee, a professor of economics at Niagara University, “In the short term, the stock market could fluctuate up and down, but in the long term, the stock market will always move up.”

When To Sell

When deciding to sell your stock, it is important to weigh the decision within two lenses: the intrinsic and extrinsic reasons. Intrinsic reasons are reasons that are related to the stock itself and/or the markets while the extrinsic reasons are related to the investor’s finances or lifestyle. Sometimes, however, the decision to sell may be triggered by a combination of the two factors.

Intrinsic Reasons

When a stock reaches your price target. Once a stock reaches a level that an investor had projected as their point to sell, then it is advisable to consider selling part, or all their position.

When a stock trades at a technical inflection point. When a stock trades near, and then breaks below a multiyear low, it often means additional losses in the horizon. In this case, it is encouraged to sell the stock as soon as the technical level is breached.

When a company’s fundamentals deteriorate. It is possible for a stock’s fundamentals to deteriorate for any number of reasons like slow earnings or revenue growth, increased competition, or reduction in valuation. In such cases, because it is difficult for the investor to determine whether the deterioration is temporary or permanent, it is advisable to sell and exit the position first, before re-evaluation.

Extrinsic Reasons to Sell

Financial reasons. One justifiable reason for an investor to sell their stocks is if they need cash to for a competing investment, such as real estate. Additionally, an investor might wish to sell a stock to book a loss for tax purposes. These financial reasons are potent ones to justify selling a stock.

Lifestyle reasons. Lifestyle changes also provide good reasons to sell a stock. For instance, a younger investor might sell part of or all their portfolio to put a down payment on a house, while parent investors may also sell stocks to finance their children’s education.

Tip

i-invest offers an array of safe and secure investment options for buying stocks, Equities, Eurobonds, among others. Click here to find out more.

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Building a savings culture

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Commercial Papers?

Commercial Papers (“CPs”) are short-term debt instruments issued by corporates to get funds from the public (private individuals, institutional investors, non-governmental organisations, religious bodies etc.) to meet short-term obligations. These large corporations are the main issuers of Commercial Papers because they have high credit ratings.

A CP pays a fixed interest rate to the investor. Also, it is generally sold at a discount to its face value due to the somewhat risky nature of the unsecured security. Typically, maturities on Commercial Papers rarely last longer than 270 days. 

The minimum investment amount for Commercial Papers on i-invest is N50,000.

Coins in glass jar for money saving financial concept

Advantages of Commercial Papers

  • Low minimum investment amount – invest from as low as N50,000 and enjoy access to relatively high return on investment 
  • Fixed return on investment –  you get to earn your interest upfront (discounted value) at the point of purchase while the invested amount (face value) is paid fully at maturity
  • Duration – short to medium term investment (duration of 15-270 days)
  • Low risk of default – the companies that issue commercial paper are large, creditworthy corporations and the paper often gets ratings from ratings agencies. As a result, there is a low risk of you losing your investment.
  • Investment portfolio diversification – commercial papers are an effective way to diversify investment portfolio and balance higher-risk investments like stocks.
  • Tax free

How do Commercial Papers work?

Commercial Papers are sold at a discount, meaning the investor pays less than the face value of the security, and the rate of return is the difference between the purchase price and face value. Companies typically write commercial paper in minimum denominations of thousands with terms ranging from 15 to 270 days, though the average maturity on commercial paper is around 30 days.

While commercial papers in Nigeria are typically issued by corporates with remarkable credit ratings, this does not eliminate credit risk. However, commercial paper offers investors the opportunity to purchase better yielding instruments than available on risk-free instruments, especially investors who can take calculated risk.

How to Buy Commercial Papers?

  1. Download the i-invest app on the App Store or Google Play Store or sign up on this website.
  2. Register with your BVN, phone number and a valid email address.
  3. Fund your wallet via internet banking, card or in a bank branch. Wallet withdrawals can be made directly into an account linked to your BVN.
  4. Select your preferred investment option and watch your money work for you!
  5. Be sure to upload a passport photograph, recent utility bill and a valid means of identification for KYC verification.
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How much can I start investing with?

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Fixed Deposit Notes

Fixed deposit Notes sometimes known as a term deposits are investment instruments which are provided by financial institutions, which allows you to invest a certain sum of money for a fixed period at a predetermined interest rate until the specified maturity date.    

Fixed Deposits offer higher interest rates than the regular savings accounts. This is an ideal investment option for you and/or your business, if you have a lump-sum amount that is not required for immediate use and you are averse to taking high risks, as the returns are not subject to market risks and offer a fixed rate of interest throughout the tenure. 

Minimum investment is N100,000, and withholding tax is deductible from accrued interest.

Advantages of Fixed Deposit Note

Fixed deposits have several advantages, some of which are:

  1. Low risk – Market risks do not affect the returns on your fixed deposits.
  2. Higher Interest – Earn high interest on your deposits than your regular savings account and let your money work for you. 
  3. Fixed Interest Rate – No matter how interest rates move or economy performs, you will get the returns fixed at the time of investing.
  4. Assured Return – Unlike market-linked securities that may result in losses due to market volatility, fixed deposits provide an assured rate of return on investments. Your capital remains intact.

How does it work

When you invest in Fixed deposits, the financial institution guarantees to return the invested sum at the end of the tenure, known as the maturity period, and pays you interest for it. 

The interest offered depends on the tenure or maturity period of the Fixed deposits. A 30-day fixed deposit will have a lower annual interest rate compared to a one-year tenure. This is to compensate for the time value of money.

How Can I Buy Fixed Deposit Notes?

  1. Download the i-invest app on the App Store or Google Play Store or sign up on this website.
  2. Register with your BVN, phone number and a valid email address.
  3. Fund your wallet via internet banking, card or in a bank branch. Wallet withdrawals can be made directly into an account linked to your BVN.
  4. Select your preferred investment option and watch your money work for you!
  5. Be sure to upload a passport photograph, recent utility bill and a valid means of identification for KYC verification .
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What is an equity

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What are Equities?

An equity investment is money that is invested in a company by purchasing shares of that company in the stock market. These shares are typically traded on the stock exchange. The equities product on the i-invest app allows you to buy and sell shares in publicly listed companies on the Nigerian stock exchange directly from your phone.

What you should know

  1. Orders placed for shares are filled based on market availability and are matched at the prevailing market price as at the time of the order.
  2. Dividends earned from shareholdings are determined by the company and will be paid into the investor’s registered bank account.
  3. The Nigerian Stock Exchange trading hours are between 10am and 2:30pm.
  4. The i-invest equities service is provided by PSL Capital Limited. PSL Capital is a registered member of the Nigerian Stock Exchange.

Why should you consider Equities?

Equity investors purchase shares of a company with the expectation that they’ll rise in value in the form of capital gains, and/or generate capital dividends. If an equity investment rises in value, the investor would receive the monetary difference if they sold their shares, or if the company’s assets are liquidated and all its obligations are met. Equities can strengthen a portfolio’s asset allocation by adding diversification.

Logos of different companies with paper planes on a flat surface

Potential benefits of Equity Investments

  1. The main benefit from an equity investment is the possibility to increase the value of the principal amount invested. This comes in the form of capital gains and dividends.
  2. Investors may also be able to increase investment through rights shares, should a company wish to raise additional capital in equity markets.

How do I buy a slice of my favourite company?

  1. Download the i-invest app on the App Store or Google Play Store. 
  2. Register with your BVN, phone number and a valid email address.
  3. Provide a passport photograph, recent utility bill and a valid means of identification for KYC upload.
  4. Once KYC is updated, a trading account will be opened for you.
  5. Fund your wallet via debit card or internet banking.
  6. Click on Invest on the app and select ‘Equities’.
  7. Select a stock from the list of stocks displayed.
  8. Enter the volume of stock you would like to purchase.
  9. Click ‘Proceed’, a transaction summary page will be displayed for review. To proceed, click ‘Complete purchase’ to conclude your purchase.
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