N5000 note: Invest in assets. Naira is falling

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Posted by on Saturday September 1, 2012 10:7:30:

We are already in the last quarter of 2012 and guess what? Another inflation! That's the way I see the new plan by the CBN governor Mallam Sanusi to introduce a higher naira denomination into the system in the value of N5000.

Like it's precedents, an introduction of higher notes tend to always make the naira depreciate while a re-denomination would most likely improve its value and we can take the case of the Ghanaian cedi. Same would have been for Nigerian naira if Soludo had been allowed to re-denominate the naira.

Anyway, our focus is not really on which CBN governor did better or worse but on how to make money with this new policy if allowed to sail through the Senate. As always, the best way to avoid losing money when a currency depreciates is to simply sell that currency before it does - Convert the naira into something else like assets or the US dollar.

With this new policy, it won' be a surprise if other assets like the US dollar reaches N180 by next year or stocks appreciate by 30% to 40% before April 2013. So if you can, invest in assets that can avoid you losing money to the depreciating naira.

So if you have money for land, buy land rather than keeping the money in a naira savings account. You can as well convert your naira funds to save it in a domiciliary account. You can also buy shares or something like gold to protect your wealth. If you are a trader, stock up your shop or warehouse before Christmas because we are not sure the naira will remain strong after that. Besides, Jonathan may throw in another fuel subsidy news before then so stay alert.

The idea is to invest in things that will appreciate if there is inflation and if there is none, you still have nothing to lose. Holding on to cash in Nigeria before an expected inflation is really a bad business idea.



Comments:
Re: N5000 note: Invest in assets. Naira is falling Reply by Medugu josy on Saturday September 1, 2012 at 23:39:55:

Thanks mr. Okoli. I thought as much. Keeping naira is of no use. But I also learn that us dollars may be devalued very soon because us is so indebted to china and china is not willing to loan us without devaluing the us currency. The best are properties, stocks and gold I suggest.




Re: N5000 note: Invest in assets. Naira is falling Reply by Mr Uyi on Monday September 3, 2012 at 15:15:14:

Dear Mr Okoli

The site is the best to get the latest and educative info.
Keep the good work.
I make sure to read your article everyday because you are very current and your info are very infornative.

Concern investing in shares because of the increase in Currency,is like ly to do well by next year.
Is not all the stock that we benefit from the 5000 note, so can you please list 4 shares that you think we benefit?

God bless you.
Hope to hear from you soon.

Mr Uyi
Benin City.
Edo state. Nigeria



Re: N5000 note: Invest in assets. Naira is falling Reply by Uzoma Okafor on Friday September 7, 2012 at 13:47:36:

Thanks so much for this wonderful informative blog. I was told at the bank that domiciliary account is a current account. I think that would lead to charges which would only deplete the account as against a savings account which should swell it. What do you think?



Re: N5000 note: Invest in assets. Naira is falling Reply by Felix Okoli on Friday September 7, 2012 at 13:47:36:

As far as I know, Nigerians banks have two types or domiciliary accounts: Savings and current. Maybe your bank doesn't offer a savings domiciliary account or the person you met is a new staff


Re: N5000 note: Invest in assets. Naira is falling Reply by Felix Okoli on Friday September 7, 2012 at 13:47:36:

@ Mr Uyi, on the issues of which shares to buy and which not to. It's bet to just buy shares like in the banking, health care and food sector. Buy cheap bank stocks like Sterling, ,FCMB, Fidelity and Access. You can also buy stocks like May and Baker, Honeyflour and Dangote sugar.





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