Investing in the stock market is one of the most profitable ways to grow your money without taking on too much risk.
However, there is a belief that stock investing is only for the rich or highly sophisticated people in society.
A few people even subscribe to the misconception that nothing good can come out from the Nigerian Stock Market.
However, the truth remains that investors are making money daily, weekly, and yearly from investing in a few profitable stocks.
Stock investing is not difficult. You only need to have a plan on what types of stock you want, the level of risk you are ready to assume, and the right exposure to high-performing stocks.
In this article, we’ll be looking at some of the most profitable stocks you can invest in or Buy in Nigeria to grow your money.
The main reason why Telecoms stocks are the most preferred is because the Telecoms industry has become a very important enabler to many other industries.
Over the last decade, we’ve witnessed the growth in adoption of communication technology, which has overtime become integral to the way our society works.
Hence, the Telecoms industry has witnessed a strong cash inflow and financial stability not witnessed in many other industries.
If you check the NGX weekly indices, you’d see that most of the Telecoms stocks are usually among the top earners.
So, why not buy Telecoms stocks and shares in the growing profits? It’s a no brainer.
Commodities are essentials, hence they are regarded as high-volume products.
8 in 10 people you know use commodities everyday. We need flour to make bread. We need wires and bulbs to light up our streets and homes, we need mattresses and wooden furniture, etc.
These commodities are manufactured by companies, some of which are backed by investors’ funds from the Nigerian Stock market.
The more you buy these commodities, the more these commodity companies make money for themselves and their investors.
If you could have a share in that big pie, why wouldn’t you?
Banking & Finance Stocks
Since the last decade, I’ve never heard of any Nigerian bank that posted a loss at the year end.
This is because banks are the oxygen that gives life to the Nigerian economy.
On a daily basis, billions of Naira are deposited, withdrawn and exchanged via banks, who make profits from these transactions.
In turn, investors who hold preferred and common stocks of these banks make profits yearly as well.
So, investing in bank stocks should be an easy decision for anyone looking to profit from the stock market.
Oil & Gas Stocks
This is a friendly reminder that Nigeria’s current biggest source of revenue is Oil and Gas.
Without Oil and Gas, Nigeria would have the same economy as Somalia, and politics in Nigeria wouldn’t be the lucrative haven that it is today.
That shows how much revenue drive is commanded by the Oil and Gas industry in Nigeria.
In the same vein, the epileptic power supply situation in Nigeria ensures that the Nigerian economy relies heavily on Oil & gas to propel most of the manufacturing and services in Industry.
This over-reliance is a big indicator that investing in Oil & gas would ensure lucrative returns.
In my opinion, the impact of the Oil & Gas industry on the Nigerian economy is as big as the impact of the Telecoms industry, if not bigger.
So investing in this sector should be one of the priorities of any serious investor in Nigeria.
High-yield Index Funds
Index Funds are for investors who want to put their money where things are happening.
You don’t just want to guess where the market is going using your layman analysis.
Instead you rely on experts who have both experiential and technical knowledge of the stock market to help you pick an index of the best stocks to invest in.
Most of these high-yield Index Funds are tradable on the Nigerian Stock Exchange in different forms such as Growth Index, Yield Index, and Value Index.
You can always analyze the trends of each index over different time periods before choosing which to invest your money in.
This portfolio is for the risk averse investor who wants to invest in a fixed income opportunity that guarantees specific returns.
Most Low-risk ETFs in Nigeria combine different portfolios such as Treasury bills, Commercial papers, Government bonds, and short-term instruments.
As a low-risk portfolio, the returns from these ETFs are usually low. You could get anywhere from 4% to 10% returns per annum.
But that is not bad considering the meagre interest you would get on your money if it were to be sitting in your bank savings.