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How to Identify Genuine Investment Opportunities in Nigeria

The web is awash with purported investment opportunities. Many of them promise fantastic returns; not a few proclaim that they’re risk-free. There are so many apparent options on the table, it’s sometimes hard to tell which ones are worth your time and money.

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The fact is, a lot of these so-called investment vehicles are not genuine. You can tell this from the ads these companies put out, and from the anecdotes shared by people who have been duped by supposed investment platforms.

But what if you’re not sure what to look out for when weighing these supposed wealth generation schemes? How do you discover solid investment opportunities amid questionable alternatives?

Here are 5 things you can seek out in any investment platform you’re interested in. If they tick these boxes, they’re probably genuine.

Evidence of Registration with Appropriate Authorities

In Nigeria, crowdfunded investment companies (the most popular kinds these days) are registered with the Securities and Exchange Commission (SEC). This brings them under official regulations and makes them liable to sanctions if they do not meet their obligations to their customers.

If you’re looking to invest with a platform, ensure that they’re registered with the SEC or other appropriate authorities. Also, ascertain that funds deposited with them are insured by a reputable insurance company.

Executives Have Relevant Credentials or Qualifications

Find out who runs the investment company, what their reputation is like, and whether they have the necessary qualifications or experience to manage investors’ funds. Look out for experience either in finance, especially in wealth management and financial markets, or in the industry they’re investing in.

Clarity About What the Investment is and How it Works

Avoid so-called investment agents that aren’t clear about what they invest in, or how they generate returns. Labels like ‘internet business,’ ‘FOREX’, or ‘agribusiness’ are not enough. You’ll need a more in-depth explanation than these buzzwords.

Find out what the platform’s crowdfunded investments actually are—whether they’re stocks, commodities, cryptocurrencies, real estate, or agricultural projects. Also, inquire about the specifics of these things. For example, what particular stocks have they invested in, or where the farms they’re investing in are located.

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Reasonable Returns from the Particular Investment Concerned

Here’s a rule you can work with: if you think the return on investment you’re being promised is too good to be true, it probably is.

Learn what the typical yield for the investment is, and compare it with what investment platforms are offering. Only go on with your investment decision if there’s no inexplicably big difference between these figures.

Beware of opportunities that promise double-digit returns per month. They’re almost always scams. For instance, a company says they’ll pay you 10%, 20%, or 30% of your investment every month. This is not feasible even in the best of times. You should avoid them.

Risks are Clearly Stated

There’s no such thing as a risk-free investment. What we do have are investments with varying degrees of risk. The higher the potential returns from an investment, the greater the risk associated with it.

When hunting for investment opportunities, look for vehicles or organizations that spell out the risks associated with their offerings. They may label each offering based on the level of risk they come with, e.g. low risk, medium risk, or high risk.

Final Words

Investing is a risky business, but the reward it brings could make it worthwhile. It doesn’t have to result in you getting duped. Go for options that meet the criteria we’ve just listed and you’ll have your money in safe hands.

Featured Image Source: Nairametrics

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Ikenna Nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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