December 2015 Inflation

The inflation rate for December is now 9.6%….up from 9.5% in November.

How should an investor view this?

Well it means any investment you make should give you a return in equal to or in excess of 9.6% , that will enable you make a “real” rate of return.

Thus if you have an investment that pays say 5% (for example Saving Accounts,) then your making a negative (-4.6%) real rate of return…

What can you do?

Diversify, spead your money around. A portfolio of N100,000, should be put in asset classes that both secure principal and provide avenues for capital appreciation.

Dont chase investment returns, always invest where your predefined investment objectives are met….

So review your fixed income portfolio, if you have cash invested, ask about the return, if its below 9.6% ask for options that match your investment horizon to your risk profile. To be specific, dont leave money in a saving account that pays 4%, ask for options like Fixed Deposit or Bonds that pay higher….as long as this matches your objectives and risk profile.  Always speak with your investment adviser before you invest….fpka-december-2015-inflation