Are you interested in investing in the stock market but don’t want the hassle of analysing financial statements, comparing EV/EBITDA multiples and P/E ratios, etc?
The truth is you can invest in the stock market without doing all of those; simply invest in an equity mutual fund! Chapel Hill Denham’s Paramount Fund tracks the best of the best companies on the NGX, the Nigerian Exchange, which is the country’s primary stock market where top businesses are listed and traded; think of the blue-chip companies that have stable performance, good dividend payments, and strong financial history.
What’s the Chapel Hill Denham Paramount Fund, you ask? The Paramount Fund by Chapel Hill Denham is a professionally managed investment fund that pools money into a diverse selection of top-performing Nigerian stocks. It is designed for long-term growth and allows investors to benefit from expert stock selection and market insights. With strong historical returns, the fund aims to outpace inflation and build wealth over time, making it an attractive option for those looking to invest in Nigeria’s thriving businesses.
Read more about the Paramount Fund.
How the Paramount Fund is Performing
The Paramount Fund has been doing its thing and doing it well.
- This year so far, it’s up 6.16%, while the NGX 30 (the benchmark) is only up 2.87%.
- In the last 12 months, it returned 38.68% even beating inflation (which was 30.10%).
- And if you had stayed in for 5 years, your money would’ve grown by 356.39%. Wild.
Bottom line? The fund has outperformed the market and inflation over time. It’s a solid pick for high-risk appetite investors who want to grow their money long-term.
How to invest?
Simply buy units of the Paramount Fund by clicking this link and let the fund managers handle all the stock selection and investing decisions for you.
Let us add a little plot twist: You do not want to touch P/E ratios AND you already have Paramount Fund. Is there any other way to invest directly?
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An emphatic YES!
We call it a bottom-up, economic-based approach to stock selection and investing, aka picking stocks based on real business strength, not just market trends.
How does it work? You ask. In Six simple steps:
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Identifying Everyday Products and Services
Look around you. Which products and/or services do most Nigerians use daily? Write down a list as many as possible!
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Grouping Products into Sectors and Companies
Categorise these products and services into sectors or buckets. Then develop a list of the companies manufacturing such products. If there are listed companies among them (hint: listed companies must be public companies with a “PLC” at the end of their names), note those down.
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Pinpointing Market Leaders
For each sector, write down the top one or two companies based on your assessment of demand among Nigerians.
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Diversification: Spreading Your Investments
Now you should have a list of companies from different sectors ready for your investment. It is important to not put all your eggs in one basket – diversify and invest in more than one sector to reduce risk
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Comparing with Market Recommendations
Compare these companies with the Recommended List on the InvestNaija app. Look out for the recent price performance, especially the 52-week high and 52-week low to determine a good price to buy the stock at (you should aim to buy at a price lower than the 52-week high).
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Making Informed Investment Choices
Select those companies you are comfortable with, based on your understanding of their business model, alignment with your risk tolerance (e.g., you can check how the price has fluctuated over time on InvestNaija), and your outlook for their future performance.
In addition, you can do a little more research by visiting the company’s website, looking at news about the company, and reviewing some basic financial information from the NGX (you can click here).
By taking this approach based on economic activity, you would be positioning your investments to participate in the growth of these companies and tap into financial freedom over the long term.
Important: Remember that stock investments carry risk, and it is important to invest what you can afford to lose.
📌 Disclaimer: This is for informational purposes only and should not be taken as financial advice. Please consult a licensed investment advisor before making investment decisions.
2 Comments
Great tips, I should try them out.
But the stock market has been falling for a while now – both in Nigeria and USA. How am I sure that if I invest now it won’t keep falling?
I already invest in the Paramount Fund and will try this out too.
Thanks!