Post DDEP: Investors urged to remain calm and keep investing
The Head of Client Experience at Stanbic Investments Management Services, Miriam Maku Amissah, has advised investors not to lose confidence in investments despite recent developments in the sector post the Domestic Debt Exchange Programme.
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The DDEP, which saw the government swap old bonds for new ones at reduced coupon rates and longer tenors; high inflation which is now pegged at 42.2 per cent and exchange rate volatilities, have all combined to dampen the confidence in investments in the country.
But Speaking in an interview with the Graphic Business on the sidelines of the Graphic Business/Stanbic Bank breakfast meeting, Ms Armissah said people were still better off investing than not investing at all.
She, however, urged investors to always match their investments with their goals and also seek more information about the investment product they are signing on to.
“Currently, there are many uncertainties in terms of whether when I put my money into any investment I am going to get it back, there are there are also concerns around depreciation of the cedi and high inflation which erodes the value of investments but stay investing,” she advised.
“Inflation is still there so whether you invest or not, your money will lose value but you are better off getting an investment that will give you at least 20 per cent when inflation is at 40 per cent.
In this case, you are losing 20 per cent as compared to 40 per cent if you did not invest,” she added.
Need to diversify
Ms Amissah advised investors on the need to diversify their investment portfolios and not ‘put all their eggs in one basket’.
“When you invest all your money in one portfolio, you are affected the more when something hits that particular asset class so you need to diversify.
“You can actually keep some of the money in savings, some in fixed deposits, some in collective investments.
Spread it so that you are no overly exposed to a certain kind of risk,” she stated.
Staying calm
Ms Amissah also advised investors to always remain calm and not rush to withdraw their investments which have not yet matured, noting that this may result in further losses.
She said investors must stay informed about what was happening in the investment world and make decisions accordingly.
“If you have any form of investments, this is the time to be interested in what is happening on the market.
Get interested and ask the relevant questions.
“A lot of people did investments they did not understand.
They matched their investments to goals that they did not have.
They made investments based on recommendations from others without considering their personal goals,” she noted.
She said this, coupled with the lack of information, has contributed immensely to the uncertainties in the market.
Financial literacy
She said financial institutions, regulators and the government must turn up the volume on financial literacy and ensure that it reaches everyone.
She noted that employers have to be more interested in getting their employees to understand the basis of their finances.
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“Ignorance is not bliss when it comes to your finances, it actually makes you pay more and a lot of people have felt that,” she stated.
In trying to win back the confidence, he said the Stanbic Investment Management Services was pushing financial literacy education to help customers take informed decisions.
“We provide financial literacy education programmes for institutions and organisations for free,” she said.