ernie4life:
Today is the last day of November. as we step into the last month of the year here is something to take note of,

Yields on most funds are always on the down side around this time, most analyst attribute this to the number of people exiting the funds at this time in other to meet up with festive seasons expenditure(most people use mutual funds as a means of savings rather than investment), this number of people are usually significant that they can mount pressure on the market leading to fall in yields, this doesn't happen only to mutual funds in also affects the stock market.
judging that we have had a not too good year I see the likely hood of this being more pronounced accompanied with the new monetary adjustment.

my opinion.

ernie4life:
 Yea in terms of yield you are right, 
Carpenter have you ever wondered why we saw such high yields this year compared to other years? 
What happened this year that has not happened in a while?
MPR!
Late last year MPR was adjusted from 12% which it has been in quite a long time to 13% ‎

carpenter:


Funny you mentioned that, I was thinking about the same thing yesterday. Maybe the govt was spending a lot and it was a way of mopping up liquidity cos inflation was the lowest in naija for a long time around the same time.

feelamong:


I saw this coming!!

Since the Mutual funds are all invested in FGN Bonds and TBills; with the drop in the rates and Yields...it was only a matter of time!

Clearly the days of high yields in financial investments is over!

make everyone go invest their money for real business or farms! or be ready to receive only 3% returns p.a

taiwoliu:
if, i understand the conversation well, the more liquidity in circulation, the higher the inflation?
if that be the case, why can't our government go on spending-fast (awe owo)?

carpenter:


Hmmm interesting points raised...IMO this is the best year since I have been doing mutual funds (started 2012)...I saw a couple of 15%, a few 14% and more 13% coupled with inflation in single digits.

ernie4life:
 Yea in terms of yield you are right, 
Carpenter have you ever wondered why we saw such high yields this year compared to other years? 
What happened this year that has not happened in a while?
MPR!
Late last year MPR was adjusted from 12% which it has been in quite a long time to 13% ‎

carpenter:


Ha! Can u handle it?

carpenter:


I don't know of any online business bro, am sure there will be a few threads on nairaland with people familiar with such.

Although, you may want to think of this as partly online too, I have not been to any of the mutual fund offices before, I send them money via internet banking, I get my redemption through the same mode, I never see what they sell...online business too if you ask me

taiwoliu:
is it not for the greater good? as long as government informs investing public of the intention and is very transparent in its dealings, i dont think i'll complain. #GhanaByBus

But on a serious note, aside the counter-liquidity vehicles (tbills nd co), aren't there other forms the government can tackle inflation?

I also need someone to clarify the term 'private-public partnership (PPP)'. Been reading so many confusing articles on it.

cc Ernie
Feelamong

ernie4life:


Public-Private Partnerships
A business relationship between a private-sector company and a government agency for the purpose of completing a project that will serve the public. Public-private partnerships can be used to finance, build and operate projects such as public transportation networks, parks and convention centres. Financing a project through a public-private partnership can allow a project to be completed sooner or make it a possibility in the first place. Simply put its just an agreement between the government and private company(ies) to carry out a project that will be for the better good of the public.
The benefit of this is that there is more funding for whatever the project may be.
It also creates room for introducing private sector technology and innovation in providing better public services through improved operational efficiency.
PPP also creates transparency in the execution of projects.
It also has its short comings like the cost could be higher than what it would have been if the government alone handles the project.

carpenter:
Folks,

I just made my 1st withdrawal from FBN Capital MMF and I got my money within 3 business days. It wasn't all a smooth ride due to no fault of theirs though. The Registrar sent back my form for irregular signature twice and we had to use alternative ways to get it resolved. They asked if I had shares with their registrar which is First Registrars and they just just used my signature there. One of the reasons why it pays to do business with the same family.

Disclosure: I bank with FBN, have shares in FBN Holdings, I use FBNCapital for some investments

elpiro:
@ all,

Having read about index funds, are there index funds available for one to invest in? what are the requirements?
Paitently Awaiting response from the ogas

wisemanj:
hi please if I invest hundred thousand what will be the dividence in 3month

carpenter:


At a conservative rate of 10% per annum averagely, you will get 2500 naira.

Average rate: 10
Number of months in a year: 12
Amount: 100,000
months to calculate: 3

Dividend = {[(Average Rate/12)*months to calculate]%/100%}*amount invested


Dividend = {[(10/12)*3]%/100%}*100,000 = 2,500

Without a doubt the rates may vary from month to month but your final figure will be about that based on the present economic climate.
A month ago, I would have used 12% as the average rate.

yak:
I still believe it's beta than leaving d money in a savings account

ernie4life:


definitely it will, savings account is a loss even you put into calculation the inflation effect

kaze4blues:
hi all,
I am currently in my youth service. I started in November.
I intend to invest my nysc monthly allowance into the money market fund. I opened an account with uba for the allowance.

However, I am in doubt because of the present downturns in the sector.

I need expert advise on whether I should go ahead with the investment or I should retain the money in the savings account.

suggestions of any other investment opportunities that will best suit me will also be appreciated.

Thanks

carpenter:


Kaze,

Both have their pros and cons

1. Accessibility and Flexibility

Savings account is easily accessible and you can get your money as long as the bank is open, instantly as far as ATMs and POS are concerned. With a Money Market Fund (MMF), if you need to have your money, you need to wait for 1-3 business days depending on the company you choose. There is also a holding period of (1-3months depending on the fund).

2. Profitability

Savings account is at best 1/3 of what you will get if you put your money in MMF. MMFs revolve around something called MPR (you will have to do some work...read from page 1-20 on this thread, this is intentional) which is presently 11% at the moment. So for example if MPR is maintained at 11% for a whole year, the minimum stipulated by the CBN that a bank can give its’ customers as interest is 30% of MPR. If you catch my drift, you may be thinking minimum right, that means it can be more... Don't kid yourself...they will most likely give you the minimum which is 3.3% on your money for a year....so that’s like 0.275% per month. So you need to ask yourself why you would want to make 3.3% in a year as against 11% (both rates can go up and down but are directly proportional....one goes up, the other goes up, one goes down the other goes down).

3. Personality

The kind of person you are and your needs will determine how you intend to play and the balance between the two.

The idea of this post is to give you just enough information to be interested enough to dig deeper into the other pages, this is not in any way prescriptive, just descriptive. We all have different values and needs…All the best on your journey.

Please also note that I have used "Money Market Fund< in places where I should have just used Funds (there are quite a number of them),...again when you read the rest, you will get my point.

carpenter:


Kaze,

Both have their pros and cons

1. Accessibility and Flexibility

Savings account is easily accessible and you can get your money as long as the bank is open, instantly as far as ATMs and POS are concerned. With a Money Market Fund (MMF), if you need to have your money, you need to wait for 1-3 business days depending on the company you choose. There is also a holding period of (1-3months depending on the fund).

2. Profitability

Savings account is at best 1/3 of what you will get if you put your money in MMF. MMFs revolve around something called MPR (you will have to do some work...read from page 1-20 on this thread, this is intentional) which is presently 11% at the moment. So for example if MPR is maintained at 11% for a whole year, the minimum stipulated by the CBN that a bank can give its’ customers as interest is 30% of MPR. If you catch my drift, you may be thinking minimum right, that means it can be more... Don't kid yourself...they will most likely give you the minimum which is 3.3% on your money for a year....so that’s like 0.275% per month. So you need to ask yourself why you would want to make 3.3% in a year as against 11% (both rates can go up and down but are directly proportional....one goes up, the other goes up, one goes down the other goes down).

3. Personality

The kind of person you are and your needs will determine how you intend to play and the balance between the two.

The idea of this post is to give you just enough information to be interested enough to dig deeper into the other pages, this is not in any way prescriptive, just descriptive. We all have different values and needs…All the best on your journey.

Please also note that I have used "Money Market Fund< in places where I should have just used Funds (there are quite a number of them),...again when you read the rest, you will get my point.

taiwoliu:
God no go mistakenly bless you, He go do am Intentionally.... You and a host of others here are a blessing to the coming generation of investors and enterpreneurs.

a quick question tho; a 'real' investment offering 3% monthly in interest with secured capital versus MMF? will you say 3% interest on investment is a good bargain?


cc - Ernie4life and other ogas

ernie4life:


it depends on the rate, if it's 3% annual but prorated to one month then it's not good, but if it's 3% ROI net one month then it's a fair deal because it simply means 36% per annum

ednut1:
It is only a matter of time that Tbill rates would rise as govt has to fund d budget with borrowings. Beware of Wonder banks and ponzi schemes