Clubs tipped on investment

Kampala, Uganda |  THE INDEPENDENT  Investment clubs have been tipped to diversify their investments into both physical and financial assets.

Physical assets include land, houses, plant and equipment while financial assets includes treasury bills, bonds and fixed deposits.

Speaking during a virtual meeting on Thursday, Aeko Ongodia, a founder and Chief Executive Officer of a XENO investments company, a financial advisory company, said that basing on the current situation where businesses are struggling to stand again the after the Coronavirus (COVID-19) hit, investment clubs were better off not putting their eggs in one basket.

Ongodia said it is better where money is invested in both physical and financial assets so as to gain the values of cash flows from either sides.

He said there was a bit of uncertainty if a club invests in a physical asset like a piece of land, putting hundred million shillings yet the set of cash flows value is just assumed.

Ongodia added that if a club lends the same 100 million Uganda shillings to the bank by putting the money on a fixed deposit account, one can easily trace the defined period and it will ably pay the same money with interests, making it easy to spot the returns and risks.

Investment clubs are groups containing less than 100 people who collect money together to invest in projects they believe are lucrative. They study different investments and decide to buy or sell based on a majority agreement.

According to Nancy Nakiboneka, a supervisor of international business at Centenary bank, groups should make enough analysis of the assets they would wish to invest in.

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