Presentation by Gbenga Olufeagba

1. WEALTH & ASSET MANAGEMENT IN TOUGH TIMES
BY
AKINWUNMI OLUFEAGBA

2. OUTLINE
 Introduction
 The Economics of Wealth Creation and Management
 Life Cycle and Financial Planning
 Opportunity and Risk Identification
 Navigating the TougherTimes
 Conclusion

3. Introduction- investing
 Investing is the act of seeking value at least sufficient to justify the amount paid. Consciously paying more in the
hope that it can soon be sold for a still higher price should be labeled as speculation- Warren Buffet
 Investing is an act of faith, a willingness to postpone present consumption and save for the future.We entrust our
capital to corporate stewards in the faith- at least with the hope that their effort will generate high rates of
return on our investment- John C. Bogle

4. …..Introduction- What is wealth management?
 Wealth management is the most advanced form of financial planning services
 Wealth managers typically create tailored investment strategies and plans to help their clients manage their assets
 In the strictest definition, wealth management is for the high net-worth individuals (>$1M)
 Think about wealth managers as the surgeons, and the financial planners as your family doctors/general practitioners
 Wealth management involves more specialized tax planning, wealth growth and protection, estate and succession
planning
 Financial planning includes- income, income-tax, insurance and health, investment and wealth, retirement and
estate planning

5. The economics of wealth creation and management
GLOBAL CONDITIONS
Activity
• Output
• Income & Expenditure
• Foreign Trade
• Credit Volume
Cost
• Inflation
• Interest Rates
• Exchange Rates
Financial Markets
• Equity Market Alternative Investments
• Fixed Income Market
Economic and Social Development
• Changes in Structure of Output
• Competitiveness - Global Competitive Index
& Ease of Doing Business
• Inequality
• HDI
POLICY
Fiscal, Monetary, Regulatory Conditions

6. The economics of wealth creation and management- what are the odds?
-Inflation & Exchange Rate-
 Value erosion is at the heart of poverty in Nigeria
 Win that battle, and you increase your chances of financial success
 Inflation in Nigeria averaged 11.93% between 2010 and 2020, for a cumulative 131.23%, and compounded at 245%.
 Your investment in 2010, needs to grow by 245% to break-even in 2020. If you invested N100,000 in 2010, you need to have
N345,000 by 2020, otherwise, you’ve lost money. That doesn’t account for the risk taken on the investment.
 At the end of 2020, Naira was worth just 39% its value in 2010 relative to the USD
 During this reference period, the NSE-ASI returned 64%
 That means your N100,000 invested in the NSE-ASI in 2010 will be worth N164,000 at the end of 2020- that’s 47.5% of the amount
needed to breakeven.

7. Improving the odds- Life cycle and financial planning
 Life cycle-
 Phase 1: 0-20 – Birth & Education ( most already work part-time by 16)
 Phase 2: 21-60 – EarningYears
 Phase 3: >60 – Retirement (life expectancy about 80 years)
 Ideal Life cycle- Nigeria (Adjusted for life expectancy)
 Phase 1: 0-20 – Birth & Education
 Phase 2: 21-56 – EarningYears ( Life expectancy 56 years)
16%
49%
35%
Life Cycle- Advanced Economies
Phase 1
Phase 2
Phase 3
36%
64%
Life Cycle- Nigeria
Phase 1
Phase 2

8. Lifecycle investment guide

9. …..Financial planning
 Develop well defined goals
 Divide the goals into short and long term
 Analyze current income, expenses and savings
 Map out well defined strategies to turn the goals into reality
 Review periodically, rinse and repeat

10. …..Steps in financial planning
 Identify the investment objectives
 Needs and requirements of the investment objectives
 Determine the required returns to meet the financial objectives
 Determine your individual risk tolerance
 Design an asset allocation to meet the risk tolerance and returns
 Modify asset allocation based on any change in needs or risk tolerance

11. Opportunity and risk identification- Research your investment
 Examine historical trends
 Perform financial analysis
 Compare with the peer group
 Obtain relevant economic news- identify emerging risks
 Forecast future performance
 View expert recommendations

12. …….Opportunity and risk identification- Sector selection
 Fastest growing- identifies emerging trends
 Largest sectors- indicator for established industries
 Resilient sectors- exhibit the least variation in growth rate, safest to invest
 Tactical opportunities- every season presents unique opportunities, be ready to take advantage

13. Navigating tougher times-What are the emerging risks?
 Global conditions- head or tail wind
 Domestic conditions-
 Policy
 Activity
 Cost
 Financial markets
 Socioeconomic developments

14. Conclusion- Do’s and don’ts of investing
 Do stay informed of your investments
 Do understand the advise of experts before taking it
 Do invest long term- it’s a marathon, not a sprint
 Do compound your investments, if possible invest a fixed sum monthly
 Don’t buy what you do not understand
 Don’t panic, you don’t lose till you sell

15. THANKYOU!