Data from the NBS shows, Nigeria’s headline inflation sits at 28.20%, continuing an upward climb from 27.33% in October. This reduces the purchasing power and erodes the real income of the general populace. Therefore, to reduce the effect of inflation, investors can leverage on opportunities presented by some financial instrument (FI) one of which is the Nigerian equities market.
The Nigerian equities market has posted a YtD of above 40% which is significantly above the inflation rate. Hence if properly harnessed can be a good hedge over the current pressing inflationary pressures.
Goldenbridge Asset Management Company Limited offers reliable guidance on navigating the stock exchange, even in turbulent conditions. By diversifying thoughtfully, choosing fundamentally strong stocks, and staying vigilant, investors can mitigate inflation impacts and work toward healthy returns.
Key Strategies:
- 1. Diversify Across Sectors
Investing strategically in equities across banking, agriculture, manufacturing and other sectors can help cushion inflationary pressures. A properly diversified stock portfolio can give an average real return above inflation.
- 2. Target Stocks with Strong Fundamentals
Seek out established companies with robust financials, enduring competitive advantages in their industries, and a track record of overcoming prior challenges. These companies are more likely to weather the effects of inflation and provide a good return on investment.
- 3. Stay Informed
Closely follow economic and market news to stay vigilant to trends and paradigm shift in investors’ sentiment. To stay ahead of economic uncertainties, it is important that investors’ take responsive and informed decisions through increased knowledge rather than reactive ones.
For personalized consultations on leveraging opportunities in any market climate, contact Goldenbridge at www.goldenbridge.com.ng or contact@goldenbridge.com.ng. Our investment professionals can advise you on tailored strategies to protect and grow capital even amidst inflation.
