Category: Ask Shade

How to deal with a pay cut during this pandemic

How to deal with a pay cut during this pandemic – Realising Ambitions

One of the devastating effects of the COVID-19 pandemic on individuals has been the sudden reduced income, pay cut or layoffs by organizations seeking to lower costs and stay afloat.

If you suddenly find yourself taking home less than you’re used to, these tips will help you find a balance. Likewise, if you’re among the lucky few who won’t have a reduced income, using these tips to stay cautious with your spending will help you easily navigate the potential high cost of living brought about by the pandemic.

Create a monthly expense list

The first step is to create a new expense list based on your new salary. When building your new expense list, ensure to list the needs and wants in separate columns. This helps you to identify areas that you can cut back on more easily.

Slash spending

Try cutting your clothing, entertainment, and food spending by 10% across board. Making these types of cuts enables you to find the money that you need without heavily cutting back in any one area. One way to categorize where you can cut back is to try less expensive alternatives to some of your traditional spending habits.

It helps to work with a budget number in mind. Let’s say you have an income shortfall of N50,000 per month. Knowing this number gives you an idea of the exact amount you need to trim from your budget and also helps you prioritize your expenses.

Identify ways to save on necessities

You may want to consider scaling back on your cable TV bouquet to a cheaper option, reducing your internet cost and petrol usage for your generator. Although the savings may not be huge by cutting back on only one area, the combination may be enough to help you save money. Look into finding more affordable car insurance and find less expensive alternative shopping centers for your groceries.

Don’t cut your savings

Take a look at your financial goals and find a way to continue to save money. If you make a direct debit when you’re paid, it will be easier to keep saving because now when you’re dealing with an emergency is when you need to have savings to rely on.

Develop yourself

While you utilize the above-mentioned suggestions, consider:

Keeping up with certifications so that you can easily find another job
Exploring alternative income streams
Learning a skill that will position you for the future

Final words: It takes discipline to handle a pay cut because you may have gotten accustomed to certain lifestyle expectations. It is, however, important to know that this is a phase that will eventually pass, and your ability to effectively manage your finances now will help you manage it better when things stabilize and your earning power improves again.

Art

5 types of people since easing of lockdown

The Covid-19 situation has brought about a new normal that not many have been able to adapt to. The past few weeks have seen residents of major Nigerian cities like Lagos, FCT Abuja and Ogun on total lockdown to enable the Federal Government to contain the risk of spreading the virus; while other cities observed partial lockdown.

While on lockdown, many acclimatized to doing remote work while a host of others found ways to pass the time while growing themselves through books and online courses. Parents also have to figure out online education for their kids and businesses begin to find a way to work around the situation

And just when it felt like there was no end in sight to the lockdown, the Federal government eased the lockdown allowing minimal movement while enforcing the use of face masks, hand sanitizers, washing of hands and social distancing.

Here’s how different people welcomed it:

The ones who raced out of the house like they’ve been in prison despite not having any reason to go out.

FREEDOM!!!

2. The ones who grudgingly returned to work after enjoying the freedom of not having to wake up so early.

Oh well, back to it!

3. The ones who defy the social distancing warning and go to pull and push at the banks.

If I perish, I perish.

4. The ones who are not ready to take chances.

They peep at those going out from their windows.

5. The ones who go out armed with their hand sanitizers and covered from head to toe avoiding every human contact.

Because everyone is a suspect.

———

Whichever category you fall under, we encourage you to make sure to observe every NCDC recommended safety measures and stay home if you don’t absolutely have to go out.

Don’t forget to stay safe out there when you head out. Corona Virus is real.

Protect yourself, protect others.

#StaySafe

Investment options in the midst of Covid-19

Hello Financial Experts,

What are the investment options available given the current Covid-19 pandemic?

Jude. A from Kano

Hello Jude,

In periods of heightened uncertainties, we recommend that investors remain cautions and position themselves to take advantage of investment opportunities in sectors with good fundamentals and growth prospects. Investors who currently have exposure to the equities market with a long-term investment horizon must not feel pressured to exit the market or worry about loss in their portfolios as a result of the decline in the equities market, however, they should expect significant upside as market conditions improve.

Please find below the following channels for investment opportunities below:

ARM’s Money Market Fund – An open-ended mutual fund with a highly liquid and low-risk profile that invests in high quality, short term Money Market Instruments;
ARM Eurobond Mutual Fund – A US dollar-denominated mutual fund that is authorized to invest in Eurobonds floated by the Federal Government of Nigeria and highly rated Nigerian corporates;

Eurobond investments– ARM Investment Managers offer investors access to invest directly in domestically issued Eurobonds; and
ARM Stocktrade– ARM’s proprietary mobile trading platform that provides access to trade domestic and international equities listed on the largest stock exchanges in the world.

Art

How Offshore Stocks Are Doing

We hope you are keeping safe during this pandemic and observing all the safety procedures listed by the World Health Organization (WHO) and various public health authorities.

The coronavirus pandemic is taking a toll on the global economy and stock markets. While most companies’ shares are experiencing a dip, there are a handful of resilient stocks that are navigating this turbulent period better than others. here

As an investor, we hope you will take advantage of investing in these stocks. We also want to draw your attention to diversifying your portfolio by investing in offshore stocks. Here are some interesting names weathering the covid19 storm:

The online streaming giant, Netflix, has historically proven to be a formidable stock that can stand any tidal wave that may be putting some other giants on their knees. Recently, Netflix reported first-quarter earnings last week that showed a surge in demand for the service. The company reported that 15.7 million new customers signed up in the first three months of the year. This figure is higher than the 7 million users they projected for the year 2020. However, the impressive growth in subscription did not translate to an impressive bottom line owing to other charges that pressured profits. That said, Netflix stock has gained 30% so far this year.

In the same light, Microsoft reportedly recorded significant increase in the use of their services. As more people continue to work remotely, active users of the Microsoft Teams is said to have increased from 10 million last year to 44 million earlier in the month.Microsoft is expected to release result for the last quarter this week. The stock has gained 10% so far this year.

Like Microsoft, Zoom has become a household name since the pandemic started. Zoom’s stock has increased from $68 at the start of the year to $168 per share. Demand for Zoom is high during this new pandemic and it is a great add to your portfolio.

As the quest to find vaccines to the coronavirus pandemic increases, Gilead Sciences Inc, is one of the companies leading the trail. The pharmaceutical company is reputable for making HIV treatment drugs, and Ebola Virus vaccine, Remdesivir. The company’s stock has gained ~22% so far in 2020

These are only a few and we hope you will take advantage of these offshore stocks to diversify your investment portfolio. Start here

Download ARM Stocktrade App today and start trading both local and foreign stocks

Art

What You Need to Know About InCap Solution

What is The Incap Solution

The Incap Solution is a service which helps one plan for the “in-between” situations where temporary or permanent incapacitation prevents him/her from making personal medical or financial decisions. Incap Solutions employ the use of Medical and Financial Power of Attorney.

Why opt for the Incap Solution?

It gives one the advantage of having a trustworthy person or institution to take charge of financial and medical decisions in the event of an unexpected occurrence.
It ensures seamless continuance of one’s affairs in the event of incapacitation.
It helps prevent any form of loss that would otherwise be incurred as a result of one’s incapacitation.
It helps mitigate the risk of conflict between family members or employees.
It ensures that one is able to regain control of his/her assets upon recovery.
It provides the benefit of a clear-cut decision making by the Agent on behalf of the incapacitated person.

How does the Incap Solution work:

After completing the form, please return to ARM Trustees Limited.
Your documents will be prepared for execution.

Afterwards, you’ll be required to sign your documents and return to ARM Trustees for Notarization, stamping or registration as may be necessary.

Download the Incap Solutions form here ARM Trustees – Medical & Financial Power of Attorney

The post What You Need to Know About InCap Solution appeared first on Realising Ambitions.

Art

To keep dollars in cash or not?

Hello Financial Experts,

Since this pandemic and lock-down started, my wife and I have been advised by friends to hold on to the cash we have at hand especially dollars. Do you advise us to keep our dollars in cash?

Thanks.

Michael from Lagos

Dear Michael,

We won’t advise you to keep dollars in cash because you’ll be losing income that you could have earned if that cash was invested.

We encourage you to invest instead in dollar-denominated funds such as Eurobond Funds to protect against downside risk (devaluation of the naira).

In dire economic situations like we have today, we advise investors to take on a risk-off approach by investing in safe haven assets such as Money market funds and Government securities with some degree of cash to fund anticipated liabilities. The current economic climate faced in Nigeria has found several investors seeking to lower their exposure to the naira relative to the US dollar as the nation braces for increased currency uncertainty.

We hope we’ve been of help at this time.

Thank you.

Art

Covid-19: Impact on the Financial Market

The events of the past quarter compounded by the global CoronaVirus (COVID-19) crisis and its massive impact on financial markets in the short to medium term brings a feeling of déjà vu. To reduce the spread of the virus, nations have restricted trade, travel, and in extreme cases closed their borders. Amidst all this, an oil price war between Saudi Arabia and Russia has pushed the price of crude oil below $35 per barrel.

These two factors have had an adverse impact on global economies; with governments around the world including the Nigerian government, responding with the introduction of stimulus packages to keep their economies from slipping into recession.

Despite any negative sentiments attached to current events, it is worthy of note that markets have a good record of overcoming global economic shocks as seen below:

In early 2003, a similar pandemic called “the Severe Acute Respiratory Syndrome” or (SARS) broke out in China and was not fully contained until eight months after the initial outbreak. However, the Chinese economy recovered and recorded a GDP growth of 10% in Q3 2003.
In 2015, Nigeria, like other global economies faced an economic crisis. The equity market declined 17% as global oil prices plunged to below $40 per barrel. However, investors who took a longer-term view during the crisis have fared better as markets have recovered from their lows.

The key takeaways:

The markets have a very good record of recovering from economic shocks.
We cannot time the market by consistently calling the bottom or the top, but we benefit most when we systematically invest over the long term. Market downturns provoke extreme reactions – sell late in a bear market or too early when the market turns – and this is not any different.

Way Forward for investors

From our experience, our conclusion is that it remains profitable to invest in financial markets with a long-term view.

The graph below shows the performance of the Nigerian Stock Exchange (NSE) All Share Index from 2010 to date. Whilst the asset class has under-performed over short periods, we caution investors not to write off this asset class as the volatility creates opportunities for strong positive performance over the long-term. Investors have also profited by applying rigorous research in stock selection and by maintaining a disciplined investment process. Similarly, investing in fixed income securities over the medium term has provided a good hedge against inflation as the Federal Government securities over the last 5 years delivered average annual returns of 19%, well in excess of inflation.

For investors with an above average risk appetite, there are opportunities in specific sectors of the economy such as Telecoms, where companies earning capacity will not be significantly impacted by current events, and Consumer Goods where there are companies that have the ability to withstand market shocks. Furthermore, asset prices have declined significantly to record low levels, creating compelling entry prices as new year lows are redefined. Dividend yields remain attractive across a number of companies that have maintained strong fundamentals. (e.g. Tier-1 banking names such Zenith Bank and Guaranty Trust Bank).

For investors with lower risk appetite, we would advise on a re-allocation from risky assets to money market- based investments (such ARM Money Market Fund) because of their potential for steady and competitive returns in the short term.

Final words

Although we should expect substantial market volatility in the short term, investors who are able to maintain discipline and take a longer-term horizon to investing would make it through the down cycle to enjoy the benefits of an inevitable rebound.

Our customer experience team is available to guide you through appropriate investment decisions suitable to your need. We remain focused on navigating the market environment, with the aim to keep your investment on track toward reaching your long-term investment goals.

Please maintain all the rules of safety in this period, we wish you good health.

Art

Tough Times don’t Last, But Tough People do…

Are you an investor trying to keep your head above the waters of this economy?

Our smart investment tips are designed to help you make sound investment decisions in this tough economic clime. Please see below;

Borrow less

Think twice about taking on more debt, focus on business opportunities that do not require more capital than you can afford.

Learn Something New

There just might be a more rewarding way to go about your business. Make it a goal to learn something. For instance, you might want to look up the difference between mutual funds and bonds.

Master your emotions

Don’t make your most important decisions under duress. Think about it again and again, be sure it is the wise financial move to make.

Diversify your investments

Spread your risk by investing in different asset classes (equities, property, commodities, bonds and cash)

Reduce operational costs

Reduce your overhead as much as possible. A good way to do this is to consolidate your brokerage accounts so you can negotiate lower management fee.

Get quality Financial advice

Be careful who you are listening to and from whom you are getting investment advice. Get informed quality financial advice from ARM Securities.

Create multiple streams of income

Scarcity and inflation are opportunities in disguise, find that thing you can exchange for value or engage in a passive investment such as a Money Market Fund.

Avoid volatile sectors

A good risk appetite might not favour you at a time like this. Channel your resources to sectors that deal in goods and services that cater to necessities of living.

Build strong relationships

Build relationships that ensure you are in a network of people who challenge your thinking and provide a well of valuable information from which you can tap.

Have an emergency fund

It is important to stay liquid at a time like this. Do not invest all your money, leave something to fall back on.

Invest in income producing assets

This is a good time to build a dividend portfolio. However, not all assets are income producing. Contact ARM Securities for tips on how to build a profitable portfolio.

Creatively solve problems

Not all challenges require money to solve them. Look within before you look without, there just might be an efficient but less expensive way to solve that problem.

Do you require expert financial advice or would like to know more about our investment portfolio management and stockbroking services, talk to us today.

Art

Financial Planning with Raphael: Considering Foreign Currency As An Investment

The Coronavirus pandemic has had an adverse effect on major economies worldwide. As countries have closed their borders and restricted non-essential travel, this development has led to an impactful decrease in the global demand for crude oil and, subsequently, a correlating fall in crude oil prices. Furthermore, an ongoing oil price war led by Saudi Arabia and Russia has resulted in historic increases in unwelcome supply and a further catalyst of the decline in oil prices.

With the bulk of Nigeria’s foreign reserves stemming from the exportation of crude oil, the global decline in oil prices has strongly affected confidence in the country’s economy and currency. The flight-to-safety phenomenon has led foreign portfolio investors to exit their investments in the Nigerian – a move which has led to the depletion in Nigeria’s already precarious foreign reserves. In February 2020, Nigeria’s FX reserves declined to $36.36 billion, a 4.5% decline from the reserves’ January position at $38.1 billion.

Consequently, in the past few weeks, there has been substantial demand in the US Dollar as investors have sought to convert their Naira savings as a hedge for the growing expectation that there will be a deep devaluation of the Naira, even amidst the CBN’s denials that there are no plans for a devaluation.

However, on March 20^th, 2020, as a result of steep declines in crude oil prices, the CBN issued a circular which effectively established a convergence of the multiple exchange rates for the naira. Nigeria will now observe a single exchange rate for all transactions. At both the Bureau De Change and Import & Export Window (I&E), the new end-user price has moved from N366.7 / $1 to N380.2 / $1. The CBN said that the decision to peg the exchange rate of the naira at N380 / $1 is not a devaluation of the currency but, rather, an adjustment of the rate. However, many still believe that a further devaluation is to be expected.

Amidst the turmoil and panic, the following questions must be considered:

What if there is no further devaluation of the Naira?
What happens if the pandemic is resolved sooner than later?
What will happen if the oil price war ceases and oil prices rise back up?

Unfortunately, these questions can only be answered with certainty in hindsight. However, the savvy investor must ensure that, regardless of the outcome, their savings remain protected and unsystematic risks remain low. Following the Financial Planning Principle for the effective management of your funds, investments in foreign currencies should be strongly considered for the following reasons:

Diversification of the potential risks associated with solely holding the Naira currency
Current and future Dollar-denominated obligations
Hedge as a means of protection against the depreciation or devaluation of the Naira

Opportunities to look into

In achieving the objectives above while gaining competitive returns, kindly see below the following opportunities for investment:

ARM Eurobond Mutual Fund – A US dollar-denominated mutual fund that is authorized to invest in Eurobonds floated by the Federal Government of Nigeria and highly rated Nigerian corporates;
Eurobond investments– ARM Investment Managers offer investors access to invest directly in domestically issued Eurobonds; and
ARM Stocktrade– ARM’s proprietary mobile trading platform that provides access to trade domestic and international equities listed on the largest stock exchanges in the world.

Art

6 books to read on money and investing during the quarantine

Life as you know it has been paused due to the current Corona Virus pandemic. You, like many others, have been confined to your home with limited movement for the next couple of weeks; but how do you spend this time wisely?

We recommend reading!

Here are some books on personal finance and investment you should read while at home to help you manage your finances better.

The Intelligent Investor by Benjamin Graham

Referred to as the godfather of investing, Benjamin Graham takes a different approach to investing in this book which we’re sure you’ll enjoy. Warren Buffet calls this “the best book on investing you’ll ever read”.

A Random Walk Down Wall Street by Burton Malkiel

This is a good one for beginners as Malkiel includes handy definitions of investment terms as it applies to various investment strategies directed toward different stages in life. In this book, he lays emphasis on long-term investments rather than get-rich-quick schemes including how to avoid common mistakes.

Thinking, Fast and Slow by Daniel Kahneman

This book isn’t just about investment. This Psychology professor delves into how one’s thought processes can affect investment success. Within the book, Kahneman explains how to identify your biases and lock them out so as to make rational, clear and analytical investment decisions.

Your Money or Your Life by Vicki Robin

This book is what you need to learn the art of living within your means by changing your habits and enjoying life. It helps you understand how to deal with this thing called ‘Budgeting’.

Rich Dad, Poor Dad by Robert Kiyosaki

‘Rich Dad Poor Dad: What the Rich teach their kids about money that the poor and middle class do not’ is touted as one of the bestselling personal finance books ever.

In this book, Kiyosaki uses his childhood recollections of his not-so-wealthy father and the father of his friend who was one of the richest residents in Hawaii to drive home points about money. The comparison shows how best to manage your money or lack of it, as well as helping your kids to do the same. Kiyosaki in this book posits that not all debt is bad, and you can build wealth even if you don’t currently have a staggering income.

The Broke Millennial by Erin Lowry

This book offers a fun, relatable take on managing money for beginners. Targeted towards 20-30-somethings who want to learn about finances, Lowry covers tricky, real-life situations involving money and how to deal with the challenges of having or not having enough brings.

Explore the pages of these select books to build your money-management and investing knowledge and then go on to explore www.arminvestmentcenter.com to put what you’ve learnt to practice with a plethora of investment vehicles to suit your every need.

Art