By Kingsley Webora TANKEH
Chief Executive Officer-Republic Investment Madeline Nettey has urged retail investors to be vigilant, seek out relevant information and ask the right questions when trying to make future investments.
Speaking at The Money Summit 2025 organised by the Business and Financial Times in Accra, she contended that diversifying pension investments presents another set of challenges that ought to be tackled.
She asked that proper due diligence be carried out before making investments in order to ensure the safety of our investments.
“In order to determine where to invest your GH¢500,000, there is a need to ask questions or go through a process to determine what is right and safe for that sum of money,” she said.
She expressed worry that “we don’t ask questions when we want to invest”.
The seasoned investment manager advised that we take interest in whatever we invest in.
“If you don’t want to throw away your GH¢10 or GH¢1,000 on that bottle of water, be interested in what and where you are investing. Is the institution licenced? What product do they have?,” she said, stressing some pertinent questions to ask when seeking new investment opportunities.
“We have seen in this country people looking to invest their funds. But they do not even know the regulator or whether the institution is licenced. They do not even know the instruments they are investing in,” she added, emphasising that these are essential to safeguarding your investments.
Until recently government securities and bonds were known to be risk-free investments. However after the infamous Domestic Debt Exchange Programme, DDEP, in 2022 that sent shockwaves across the retail investments landscape, it’s now crystal clear that even the safest forms of investment carry hidden risks.
Diversification of pension investments in Ghana took centre stage at the just-ended summit. It is touted as the pancea for minimising risks associated with overexposure to government securities and bonds.
“It’s good to be aggressive. It’s good to explore,” she noted.
However, it is advisable to have a balanced portfolio considering your risk appetite, duration and purpose of the investment – not just concerned with returns.
She emphasised a need for tailor-made investment strategies that suit the needs of individuals.
“Let’s say a 35-year-old walks into Republic Investments and says ‘I want to invest my money’ and his risk appetite is medium. We would start from the instruments he is comfortable with and allocate about 20-30 percent to GoG securities,” she suggested while elaborating on ways to spread out risks in your portfolio.
It is important to start with the traditional asset class which is more familiar, so you can identify risks easily before adding alternatives to your portfolio.
“After exhausting the portion allocated for traditional asset class,” she said, “some corporate bonds will be thrown in there. Some commercial papers, if listed, will be thrown in there. We’ll go through the exchange-traded funds and take advantage of listed equities.”
While recommending the equities market as a viable instrument to diversify risk and maximise returns, she cited the example of Scancom Plc stock activity since it was first listed on the Ghana Stock Exchange in 2018.
“MTN Ghana listed at GH¢0.75 in 2018. If you compute the cumulative return per annum, it’s returned about 40% just on the share price – aside from the dividends they’ve paid over the years,” she noted.
To diversify your investments effectively you need to include in your portfolio asset classes that are not directly correlated in terms of risk in order to maximise returns and minimise overall risks.
She also recommended the Ghana Gold Coin as one of the asset classes with greater returns yet is less risky.
However, there is a risk-reward theory in every asset class.
Mr. Ankit Tandon, Chief Operating Officer of Regulus Investments & Fin. Services Gh. Ltd, emphasised that: “If you take a higher risk, the anticipation of rewards is higher”.
“It does not mean that the rewards are higher, it means anticipation of the rewards is higher,” he added.
He advised retail investors “never to put all your eggs in one basket. You should always diversify”.
