In the last post on this blog, I wrote on
setting an investment goal. Thus if the goals is set, then we are now in the best position to look at the various investments opportunities, their risks and whether they are long term or short term.
The Capital market is a long term market and in Ghana, there are a lot of investment opportunities in this market. First is the investment in Stocks. There are shares of companies listed on the
Ghana Stock Exchange(GSE) ranging from the financial industry that includes banks like Standard Chartered Bank (SCB), HFC bank, UT Bank, SG-SSB, Ecobank Ghana limited (EBG), CAL bank , through the manufacturing , mining, agriculture industries to the food/ beverages industries. There are about thirty six (36) companies currently listed on the GSE with various prices from as low as 0.05p per share to as high as GHC 55 (about $ 38) per share.
There are two indexes for the exchange to help investors know the performance of the market and they are the GSE Composite Index (GSE-CI) which includes all stocks on the GSE and the GSE Financial Stock Index (GSE FSI) which include only the financial stocks and currently have a year to date rate of 13% and 6% respectively.
Investors should note that, investing in stocks is a risky but rewarding business hence not advisable until one is properly abreast with the mechanisms involved. Moreover, there are over fifteen (15) brokerage firms that could assist you in making the right investments when it comes to stocks.
Other investment opportunities in the capital market of Ghana include investing in Bonds and Mutual funds. Bonds are debt instruments issued for a period of more than one year with the purpose of raising capital by borrowing. The Government of Ghana has issued some many bonds in the past and is still issuing from time to time. There are 2-years, 3-years and 5 years government bonds available for investors with very good coupon rates. There are corporate bonds like the dollar bond from HFC bank.
Mutual fund as defined by Investopedia.com is an investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds in Ghana are managed by most brokerage houses like Databank Financial services, SDC financial services; EDC brokerages firm and so forth. Some mutual funds in Ghana are as follows; IFUND (EDC brokerage ltd.), SAS fortune fund (SAS brokerage), Mfund, Ark fund, Balanced Fund and EPACK (Databank brokerage ltd). Also we have HFC equity fund, HFC unit trust, Stanbic Investment fund, Campus mutual fund, First fund (First bank) and a lot more with various bid and sale prices. These funds have different time horizons and risks profile hence investors with less knowledge about the financial market should seek advice before investing.
Knowing your personal risk tolerance is the key to good investing. Investors assess themselves and know their ability to take risks. Some investments are high risk investment and this means that, the probability of you, the investor losing your principal (initial amount deposited in the investment) is high; also the probability of you making very high gains is high. You would have a high risk tolerance if you have the ability or heart to stand the pressure of losing some or even the entire principal. On the other side, not having the courage to lose a cent is a sign of having low risk tolerance.
My advice is for you is to follow this blog in order to learn more about the financial market and investing as a whole. In the next post, we would look at the other side of the financial market in Ghana which is the money market (short term) investment options.
Keep learning and investing.
