How to Make the Best of Use of Scarce Funds

Taking into account the downward trends in the Nigerian local stock market, investors are always frightened by the outcome of their funds on stocks no matter how appealing because of the unstable investment climate in the market. Apparently, the unexpected crash in share prices that spanned across almost 20 months after the prices reached their peak in March 2008, continues to leave many investors in the dark on what constitutes safe and and sound investments.

Many people were disappointed by the sudden burst of the market bubble owing to their lack of basic understanding of the nature of the market. Financial experts are of the view that all hope is not yet lost in the market and since it has gone the unexpected way activities are expected to stage a surprising comeback They equally opined that the lull might be on the way out but the returns might not be as it was in the previous past because of the ubiquitous credit crunch which leave many companies struggling to stay afloat.

Hard times induced by the global economic crunch notwithstanding, other profitable investments abound to ensure safety of funds and steady returns on investment.This means that those who maintains long term interest in the stock market should continue to leave their funds there for future maximum benefit. Investment in the money market may be attractive for the time being just like in the case of the bond market but what matters is the immediate or future situation.


As it is the common practice, a government bond is issued by the national authorities and denominated in the country’s normal currency while those released by governments in foreign currencies are referred to as sovereign bonds. The bonds, as the experts remarked, are normally risk-free owing to the fact that the authorities are in a good position to raise taxes for their redemption at maturity. It is quite advisable to invest in bonds directly through licensed stock brokers and the point of attraction there is a sure fixed returns. All your banker needs to do is to negotiate for a change of terms at the end of the investment period.

With a few thousand dollars, it is possible to invest in bonds, all the bankers do is to pool the investment together and then buy the stock for the investors. They also advise on what bonds are available in the market at any point. It is also possible for money market investors to explore Banker’s Acceptances and Commercial papers according to what the experts say. A commercial paper is an unsecured short-term promissory note issued by a company for short term cash, normally for financing working capital requirements.

The banker’s acceptance, in its own right, is a short term instrument initiated by a non-financial firm and guaranteed by a bank. The instruments are normally traded at discounts from their face values in the secondary market according to the credit quality of the guaranteeing banks or financial institutions. Returns on acceptances and commercial papers are often higher than bonds or Treasury Bills.

Anyone who wants to venture into any kind of investment for the first time should consider the peculiar need first because if one wants to invest for the future, there is no need to look for an investment maturing early. An investor can only reap the full benefits by contacting the professionals who normally weigh the fund availability against the needs and then arrive at the best investment options.
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