Michael had always dreamed of building a comfortable life for his family.
He worked tirelessly, saving every penny he could at the end of the month.
But as prices of essential goods like food, energy, and transport reach new highs, Michael can no longer sustain his expenses with his salary, even savings can no longer save again.
Michael is considering an investment option that doesn’t require extra effort nor put his current job at risk; a near zero risk but high-yielding investment that can beat inflations and provides sustainable cashflow to complement existing salary
Michael has several zero-risk options, Fixed deposits, CBN-Treasury bills, and bonds but none provides yearly returns above rising inflation.
With its ups and downs, the Nigerian stock market seems too risky for Michael’s conservative nature. We have heard horror stories of people losing their life savings to sudden market crashes.
While Michael was looking for the best investment opportunities with low risk but high returns on YouTube, he stumbled on a video in which CoachOge, founder of the Globfolio newsletter community, discussed using a hybrid approach to invest in the same Nigerian stock market without losing your capital. This hit him differently: “How can one invest in stocks without losing capital? Is the stock market not a risky bet? What’s this hybrid approach?”
This unique approach to investing is very uncommon in Nigeria. Many beginners or even experienced investors know the options as separate investments, but none have taken advantage of the power of hybrid investing.
Intrigued, Michael watched the video and like you’d expect, the video delivered on its promise.
How can I invest in Nigerian stocks without losing my capital? Well, it’s a simple, yet brilliant investing strategy that guarantees capital preservation and generates inflation-beating returns.
3 Ways to Invest in Nigeria Stock Market Without Losing Your Capital
1. Invest in CBN Treasury Bills
CBN Treasury bills are debt instruments issued by the government to fund capital projects.
Investing in Nigeria Treasury Bills offers guaranteed instant upfront returns while your initial investment or capital is paid back on the maturity of your bill which ranges from 90 days, 180 days, to 365 days.
But we recommend the 365 days since it offers the highest upfront return or cash payout.
6 ways to get started and invest in the CBN Treasury bill monthly auctions:
- Register with an authorised dealer, stockbroker or your bank.
- Fund your investment or savings account, some platforms require a minimum of N1,000,000 or even more
- Instruct your bank or broker by filling out a mandate form and stating the exact amount you want to invest.
- Select your payout method; upfront interest or capitalized
- Pick upfront interest because you want to maximize returns before the T-bill expires.
- Once your instruction is processed, you should receive a debit alert while the upfront is paid in less than 7 days.
CBN Treasury bills rate offers depend on the interest rate; what you earn is tied to the government’s need for cash; if the federal needs cash to finance an urgent capital project, it tends to entice the market with higher rates, just like we had seen in the last 2-4 years, from 17% to a high of 27.25% in 2024.
Smart investors don’t buy Treasury bills to spend the returns, rather they use it to preserve capital while maximizing the returns from a high-yielding investment like Nigerian stocks.
2. Invest in the best Nigerian stocks with high-yielding returns
This model requires investing the upfront interest in the Nigerian stock market where you can maximize returns for up to 12 months, the same period the CBN Treasury is expected to mature.
Let’s say you earned 20%+ from N5,000,000 initial capital less WHT and charges, you have like N995,000, this is an upfront interest income.
You can carefully invest this interest income in selected fundamentally sound oversold stocks, hence maximizing potential returns in the short term while mitigating risk.
The takeaway from the second tip is “invest in fundamentally sound oversold stock”, and not fundamentally sound stock.
They are not the same.
A lot of stocks are fundamentally sound but not all are oversold; This strategy requires price action where you find a solid stock with track records that had been beaten down for weeks or months without justifiable reason or known news, pick them at the bottom or bargain prices before they resume their uptrend.
For instance:
- Fidelity Bank is a solid banking stock with good fundamentals but we waited for the stock to drop from a high of N14 in January 2024 to an oversold region of N8-9, CoachOge recommended the stock at N9-10 with a next key level target of N14 (see YouTube video on Fidelity bank stock). In 3-4 months, the stock delivered an average double-digit returns of 50-60%.
- In January 2023, Nascon was oversold around N10, and CoachOge recommended the consumer goods stock. In 3-4 months, the stock delivered good returns.
These are instances where buying a stock in an oversold region can deliver massive returns on your interest investment.
We teach this model in the Globfolio Elite Trader Course.
3. Copy top investors or traders with a proven track record in the Nigerian stock market.
There is a popular saying in Nigeria, “Follow who know road”.
Copying successful investors with track records is a sure path to beating the market while learning the ropes of stock investing.
Michael was initially hesitant. He loved the idea of buying Treasury bills for upfront interest but it still felt like a gamble investing in stocks, with no prior experience.
He enrolled in the Globfolio Elite Trader course where we teach time-tested 3 checklists for picking Nigerians stock prime for massive capital appreciations.
To strike a balance between risk tolerance and return, Michael enrolled in the 3-weekend course in June 2024
With a leap of faith, Michael followed our recommendations after collecting his interest income from the CBN T-Bill (June auction)
Over the next 3-4 months, he watched as his investment portfolio comprising fundamentally sound oversold stocks; Livestock, VeritasKap, Oando, and UACN grew steadily. Between June 2024 and October 2024, these stocks went up, ranking among the top gainers in the Nigerian stock market in the same period
The interest from the Treasury Bills provided a consistent income stream, while the fundamentally sound oversold stocks he invested in generated additional returns beyond inflation.
The upfront interest investment of N995,000 from the above N5m equally spread across the above stocks can deliver an additional average return of 150-300%, that’s a whopping N1.5-N2m in 3-4 months, pushing the overall portfolio to N2.4m+.
Don’t forget, the initial capital of N5m is cooling off in Treasury Bill giving us a risk-free return of 48% in 3-4 months.
Repeating this process on oversold stocks can turn N2.4m into 4m in 12 months, which is like an 80% return on your initial investment in 12 months
As the year draws to a close, Michael is amazed by the results. His initial investment had grown significantly, far exceeding his expectations. He felt a sense of relief and accomplishment. For the first time in his life, he had taken control of his finances and found a way to beat inflation without taking undue or uncalculated risks.
Michael’s story is a testament to the power of informed investing. By combining the safety of Treasury Bills with the potential for growth in the stock market, he was able to achieve his financial goals without taking unnecessary risks.
Fundamentally sound stocks alone can’t deliver and sustain double-digit returns like this, it has to be oversold to pass our recommendation list.
You have read about the power of hybrid investing and how it can help you build a near-zero-risk fixed-income investment portfolio using the CBN-Treasury bill and still earn high returns from stocks.
We want to help you achieve similar results on your self-managed portfolio by inviting you to our community, and take advantage of early stock picks in the Nigerian stock market, visit globfolio.com
About CoachOge,
✅Founder Globfolio ,8 years+ investment education community
✅Started with a bank share offer in August 2004 at N5.3, sold for N29, +447% in 1 year+
✅Lost money during the 2007/2008 global crisis, recovered all losses and learnt 3 life-changing lessons
✅Accurately picked 35+ stocks that did 150-500% annually, including MTN, Okomu in 2020, Honey (2021), Guinness (2022), PZ, Nahco, NNFM, Conoil, Eterna Oil (2023), Oando, VeritasKap, Livestock Feeds, Julius Berger, Flourmill Nigeria so far in 2024.
✅ Trained and mentored 3000+ investors via webinar, and private coaching.
✅ Earned N979m+ for members
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