• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Financial Literacy

How much is your N1 Million investment worth in forex vs. equities vs. bonds? 

Idika Aja by Idika Aja
January 14, 2025
in Financial Literacy, Investment Tips
5 Consumer stocks you should consider for your portfolio 
Share on FacebookShare on TwitterShare on Linkedin

Investing N1 million can yield vastly different returns depending on the asset class you choose.

In 2024, stocks stood out as the top-performing investment, with certain equities delivering exceptional gains that far surpassed returns from forex or bonds.

In this article, we will analyze the performance of forex, equities, and bonds to uncover how each asset class performed in 2024.

RelatedStories

Naira , dollar, exchange rate

Forex market volatility: Naira becoming the most unpredictable currency in the world – BDC operators

March 23, 2025
Naira , dollar, exchange rate

Exchange rate volatility: Government payments fueling rising dollar demand – BDC operators

March 10, 2025

Bonds 

Bonds are fixed-income securities where investors lend money to issuers (governments or corporations) in exchange for periodic interest payments and the return of principal at maturity.

Take for instance as of close of business on December 2024, the 10-year FGN bond closed at an average rate of 21.6%. 

An investor who invested N1 million in the FGN bond at the beginning of 2024 and held it until the end of 2024 would earn N216,000 and the investment worth N1,216,000.

However, generally, returns on bonds depend on the type of bond, duration, and the amount invested.

Let us look at this January 2024 FGN Bond Auction Result 

An investor placing N1 million in these FGN bonds for one year in 2024 would have earned returns ranging from N150,000 to N165,000, depending on the bond selected.

Key Considerations: 

Safety vs. Risk: 

Bonds are generally considered safer than equities and forex due to their fixed-income nature.

While FGN bonds are considered risk-free because they are backed by the government, they are not entirely devoid of risks, particularly reinvestment risk.

Reinvestment risk: 

Reinvestment risk arises when coupon payments or principal repayments from maturing bonds need to be reinvested at lower interest rates. This risk is especially significant in a declining interest rate environment, where bondholders may struggle to maintain the same level of return when reinvesting their earnings.

Example: If an investor earns N150,000 from the 16.2884% FGN MAR 2027 bond, and interest rates drop by the time they reinvest the income, the overall yield on the reinvested amount will decrease, reducing total returns over time.

Duration and risk trade-off: 

Longer-maturity bonds typically offer higher marginal rates (and therefore higher returns), but they come with additional risks such as interest rate sensitivity and potential price volatility. On the other hand, shorter-maturity bonds offer lower rates but are less risky.

Investment alignment: 

Choosing the right bond depends on an investor’s risk tolerance and financial goals.

Those seeking stability may prefer shorter-maturity bonds, while those willing to take on additional risks for higher returns might consider longer-maturity options.

Forex

Foreign exchange (forex) trading involves buying and selling currencies to profit from exchange rate fluctuations.

For an investment of N1 million in forex, the worth at the end of the year would depend on the currencies traded and the exchange rate fluctuations

Let’s break it down.

  • At the beginning of 2024, the exchange rate was around N871.44 to N958.05 per USD.
  • By the end of the year, the exchange rate had depreciated to approximately N1,535 per USD.
  • If you had invested N1 million in USD at the beginning of the year, you would have received approximately $1,148.15 (using the average rate of N871.44).
  • By the end of the year, if you converted that amount back to Naira at the rate of N1,535 per USD, your investment would be worth approximately N1,761,002.50.

So, your investment of N1 million would have grown to about N1,761,002.50 by the end of 2024, assuming you held onto the USD throughout the year and converted it back to Naira at the end of the year.

This would have given YtD gain of 76.1%, higher than the 2024 closing inflation rate.

The key considerations: 

Forex is known for its high volatility and potential for significant returns, but it also comes with substantial risks.

A strategic approach and a good understanding of the market are necessary.

Equities 

Investing in equities means buying shares of companies listed on the stock exchange. Equities offer the potential for capital appreciation and dividend income.

In Nigeria, the Nigerian Exchange (NGX) has shown resilience, with the All-Share Index (ASI) posting impressive gains. For instance, in 2024, the ASI delivered a 37.65% year-to-date gain.

However, individual stocks outperformed the broader index significantly. For instance, Juli Plc, SunuAssurance, Transcorp, Conoil, and Tantalizer, etc delivered extraordinary returns, where a N1 million investment in these stocks could have grown to over N2 million or more.

For example, a N1 million investment in specific stocks would have generated theoretical returns of: SUNUASSUR – over N9 million; EUNISELL – N6 million; Transcorp – N4.8 million; Conoil – approximately N4.6 million; and Tantalizer – about N4.1 million, etc.

The key consideration: While these returns are eye-catching, market liquidity plays a pivotal role and should not be ignored by investors.

Selling stocks at the desired time and price can be challenging, especially during periods of high volatility or limited trading activity.

Investors must weigh the potential for outsized returns against the risk of being unable to exit positions when needed.

Overall conclusion and outlook for 2025: 

Nigeria’s economy is expected to grow at its fastest pace since 2014, with GDP growth projected at 3.7%.

Inflation, which has been a key concern, is forecasted to moderate significantly to 27.1% by the end of 2025, offering much-needed relief to consumers and businesses.

Additionally, the Central Bank of Nigeria (CBN) is likely to lower interest rates in the second half of the year, creating a more favorable environment for investments.

  • Equities are positioned to remain attractive, as economic growth and lower interest rates could spur increased corporate earnings and stock market activity. However, investors should remain mindful of market volatility and company-specific risks.
  • Bonds, particularly FGN bonds, will continue to offer stability, but declining interest rates could impact returns through reinvestment risk.
  • Forex investments may see subdued returns as the Naira stabilizes with improving economic fundamentals, reducing speculative opportunities.

With a promising outlook across key economic indicators and sectors, 2025 presents a strong case for strategic investment planning.

Diversification among asset classes; equities, bonds, and forex, can help investors maximize returns while mitigating risks in a dynamic economic environment.


Follow us for Breaking News and Market Intelligence.
Tags: BONDSEquitiesforex
Idika Aja

Idika Aja

Idika is a Chartered Stockbroker with expertise in financial analysis, equity research, perspective analysis, and investment commentary.

Related Posts

Naira , dollar, exchange rate
Currencies

Forex market volatility: Naira becoming the most unpredictable currency in the world – BDC operators

March 23, 2025
Naira , dollar, exchange rate
Currencies

Exchange rate volatility: Government payments fueling rising dollar demand – BDC operators

March 10, 2025
How Much Is Your N1 Million Investment Worth in Forex vs Equities vs Bonds?
Digital Media

How Much Is Your N1 Million Investment Worth in Forex vs Equities vs Bonds?

March 6, 2025
Where should Nigerians invest N1 million this year? 
Financial Analysis

Where should Nigerians invest N1 million this year? 

January 4, 2025
How Currency Flunctuations Shape Your Life
Digital Media

How Currency Flunctuations Shape Your Life

December 12, 2024
Why The Naira Is Gaining Against The Dollar.
Digital Media

Why The Naira Is Crashing Again

December 12, 2024
Next Post
crude oil

Nigeria produced 566 million barrels of crude oil in 2024 - NUPRC data 

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Emple
nlng
first bank








DUNS

Recent News

  • IGP sues Abu Arome, 3 Ghanaians over alleged forgery of company shares allocation document
  • Nigeria’s oil rig count rises to 46 in July 2025 – NUPRC
  • Oyo State approves N7.7 billion for two surveillance aircraft to combat insecurity 

Follow us on social media:

Recent News

IGP prosecutes Nigerian businessmen over alleged N13.5 billion forex fraud dispute  

IGP sues Abu Arome, 3 Ghanaians over alleged forgery of company shares allocation document

July 9, 2025
Nigeria’s gas flare commercialisation programme could unlock $2.5 billion investment – NUPRC 

Nigeria’s oil rig count rises to 46 in July 2025 – NUPRC

July 9, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics