Make a Fortune Investing Abroad

Dear Speculators,

Tourism is a delightful experience. We get to experience new culture, taste different kinds of food, enjoy the tranquility of the region, visit the museums, take pictures of the beautiful city and most importantly, GO SHOPPING. I'm also a "shopaholic" but what is on my shopping list is uniquely different from most individuals who take vacations in America and Europe.

America and Europe boast developed economies with efficient and growing financial markets. The S&P 500 in America, FTSE 100 in UK and Stoxx 600 in Europe have all averaged an annual growth rate in excess of 5% in the last 30 years despite the dot-com crash and two economic recessions. An index fund should be on everyone's wish-list when next you find yourself abroad. An index fund is simply a mutual fund investment which allows you to properly diversify your portfolio in a particular stock market by buying an index in order to match the market performance instead of attempting to outperform the market like most active investors. On the average, the market always outperforms the active investor. Still the question is why should I buy the index fund in a foreign nation? Well simple. It saves you the stress of trying to analyse best foreign stocks to buy and having to change your portfolio periodically. Also, these index funds are traded in foreign currencies like dollar, pounds and euros which are very liquid in Nigeria and have consistently outperformed the naira on an average growth rate of over 15% annually. The indexes have also grown decently during this period. Our simple formula to calculate the benefit you stand to gain from such investment is:
Dividends + Stock Rally + Currency Rally = Annual Return

Think this return may be too small? Think again! In 1985, $1 traded for 90 kobo. If you had bought $1m with 900,000 naira in 1985 and kept it at a zero interest rate account, today in 2016 (31 years later) that same $1m will be worth over 300 million naira in the Bureau de Change market. Your investments would have multiplied in 300 folds! If you include the 5% average annual index gain + reinvested dividends, your investments will soar above 1.5 billion naira!!!

We estimate that investing in an index fund in America, England or Europe should give a Nigerian investor an annual return of around 22-25% over a period of 10-30 years. Remember Legendary Warren Buffet has managed to average only 20% in the last 50 years. This may be your chance to outperform the world's greatest investor!

Traveling is fun but you can make the experience better once you start making high financial returns from a journey to a distant land. Whenever you travel, don't just buy a football jersey, nice boots, perfumes or a fancy bag, throw in an index fund into that shopping list and your investment will not only sponsor your future trips abroad, it might even get you a house in London!

Signed:
Emeka Ucheaga,
Managing Partner,
Emeka Ucheaga Advisory