Coronation Conversations

Coronation Conversation Logo

5 investment strategies inspired by the Eagle 

February 7, 2024
Investment
,
0

It is Sunday, February 4, and Mama Ekundayo, a seasoned trader in Lagos, sipped her evening tea, watching the fiery sunset paint the bustling Eko Atlantic City skyline. The news that day had been grim: the dollar was trading at ₦1,445.562, sending ripples of anxiety through the Nigerian economy. But Mama Ekundayo, unlike many, wasn’t panicking. Her wise eyes, mirroring the wisdom of an age-old eagle, held a glint of understanding. 

She remembered the legend of Akara, the mighty eagle, who soared above the savanna, observing the animals below. Akara witnessed the gazelle’s panicked stampede during droughts, their desperation leading to reckless choices. He saw the lion, king of the jungle, grow prideful in times of plenty, neglecting to store for leaner days. But it was the wise old tortoise, slow and steady, who impressed Akara most. The tortoise, unfazed by the changing seasons, meticulously planned and prepared, ensuring its survival amidst any turmoil. 

The market is like the savanna,” Mama Ekundayo muttered to herself, “full of emotional reactions and knee-jerk decisions.” She compared the rising dollar to a sudden storm, fierce and disruptive. Like Akara, she refused to be swept away by panic.  

She also read the article by Abiola Yusuf that the naira is about regaining real value.  

In the article, Abiola is saying that, “though the naira value has been dwindling over the years, the CBN, through its recent monetary policies, has been able to stem the tide.” 

CBN Governor - Olayemi Cardoso
CBN Governor – Olayemi Cardoso

He continues:  

The policies introduced in the last few days, according to financial experts, will make the nation’s currency achieve its true value or march toward a more stable foreign exchange (FX) market

For instance, on January 29, 2024, the CBN issued a circular titled ‘Financial Market Price Transparency.’ The circular directed all authorised dealers in the foreign exchange market to desist from reporting inaccurate and misleading information on transactions concluded in the financial market

In a circular to all the market dealers, the CBN said investigations revealed instances of underreporting of transaction rates and the practice of ‘second cheques’ on foreign exchange and fixed-income transactions

The CBN had permitted financial markets transactions to be conducted on a ‘willing-buyer-willing-seller’ basis, by which prices are expected to be quoted and displayed transparently.” 

Also, investors trading on the floor of the Nigerian Exchange Limited (NGX) showed enthusiasm ahead of earnings season, gaining ₦14.44 trillion as it closed January at ₦55.357 trillion from ₦40.917 trillion with which it started. This is amid galloping inflation, low supply of foreign exchange and naira devaluation.  

Similarly, the NGX’s all-share index (ASI), an indicator used to measure the performance of listed firms on NGX, has hit a record high to close at 104,421.23 basis points on February 2, 2024. 

It opened the year at 74,773.77 basis on January 2, implying an increase of 26,380.69 basis points or 35.28 per cent to close January 31, 2024, at 101,154.46 basis points. 

Armed with this information, she threw aside the trends of the dollar-naira rise in the last couple of days:  
Date Dollar  Naira 
Monday, Jan 22, 2024 1 USD  ⇛ ₦1,359.669 
Tuesday, Jan 23, 2024  1 USD  ⇛ ₦1,373.365 
Wednesday, Jan 24, 2024  1 USD  ⇛ ₦1,398.083 
Thursday, Jan 25, 2024  1 USD  ⇛ ₦1,400.760 
Friday, Jan 26, 2024  1 USD  ⇛ ₦1,409.278 
Monday, Jan 29, 2024  1 USD  ⇛ ₦1,451.395 
Tuesday, Jan 30, 2024  1 USD  ⇛ ₦1,490.514 
Wednesday Jan 31, 2024  1 USD  ⇛ ₦1,520.123 
Thursday, Feb 1, 2024  1 USD  ⇛ ₦1,442.209 
Friday, Feb 2, 2024  1 USD  ⇛ ₦1,433.244 
Monday, Feb 5, 2024 1 USD ⇛ ₦1,438.746
Tuesday, Feb 6, 20241 USD ⇛ ₦1,464.343
Wednesday Feb 7, 20241 USD ⇛ ₦1,450.558
Source: Naira Rates

Instead, she drew lessons from the Eagle: 

5 investment strategies inspired by the Eagle 
5 investment strategies inspired by the Eagle 

Read also: Investing in the Nigerian stock market: A balancing act of opportunities and risks

1. Vision with a panoramic view:

Eagles possess exceptional eyesight, allowing them scan vast landscapes and spot opportunities from afar. As an investor, this translates to having a long-term vision, not focusing solely on short-term fluctuations. While the Naira’s current dip may seem daunting, remember, economic cycles are ever turning. Keep your gaze focused on your long-term financial goals and make informed decisions based on a broader perspective. 

2. Strength in adaptability:

Eagles are masters of adapting to changing environments. They adjust their flight patterns based on wind currents, and their sharp talons allow them snatch prey in diverse terrains. Similarly, investors must be adaptable. Be prepared to adjust your strategies as market conditions evolve. The Naira’s dip may necessitate diversifying your portfolio, exploring new investment avenues, or seeking professional guidance. Don’t be afraid to adjust your course mid-flight! 

3. Weathering the storm with patience:

As eagles patiently circle above their prey, waiting for the opportune moment to strike, investors must cultivate patience. The current market turbulence may create a temptation to react hastily. However, resist the urge to make impulsive investment decisions driven by fear or panic. Instead, channel the eagle’s composure, conduct thorough research, and wait for the right moment to act. 

4. Power in precision:

An eagle’s dive for prey is a marvel of precision, ensuring a swift and successful capture. As an investor, this translates to meticulous planning and execution. Conduct thorough research before investing, understand the risks and potential rewards, and make calculated decisions based on your financial goals and risk tolerance. Don’t rely on guesswork or impulsive actions. 

5. Soaring above with knowledge:

Eagles possess an innate understanding of their environment and prey behaviour. As an investor, continuous learning is crucial. Stay informed about economic trends, understand the factors influencing the Naira’s movement, and seek knowledge from reliable sources. This knowledge empowers you to make informed investment decisions and navigate market complexities with confidence. 

Remember, the next time you face economic uncertainty, take a page from the Eagle. Observe, learn, adapt, and most importantly, stay calm. With a clear vision and a well-diversified approach, you too can rise above the storm and achieve your financial goals. 

You can also visit the Coronation Investment Academy to learn more.  

Related Posts
Falling Naira? What you can do with ₦500,000 now
Falling Naira - What you can do with ₦500,000 now

...Ade invests all ₦500,000 in a low-risk mutual fund with an average annual return of 8%. 

Why Stocks could be your ticket to financial freedom in Nigeria 
Investing in stocks

With the Nigerian Exchange (NGX) witnessing growth, many eyes are turning towards the world of stocks.

Inflation got you sweating? See how you can beat the challenge
Inflation

At Coronation Asset Management, we believe everyone deserves a reliable compass and a skilled sherpa on their financial journey.

Investing in the Nigerian Stock Market: A balancing act of opportunities and risks
Investing in the Nigerian stock market

While the allure of soaring gains is undeniable, a discerning investor acknowledges the inherent risks:

Share this:

× Chat with a financial advisor