Sunday, September 25, 2011

How to start investing (104); Various Types of investments in Ghana; The Money market..


The Ghanaian investment community has been developing every day and it is good to know that, the other side of the investment coin (the money market) is very rewarding as compared to other economies on the African continent or the whole world as a whole.
The money market trading involves trading of low risk securities which are usual short term unlike the capital market. Most people perceive this market as less rewarding since it is a low risk market. But in a developing country like Ghana where Treasury bill rates are above 12% and other low risk rate securities are becoming good investments, what else can you think about than to venture.
Let us now look at the various short term securities in the Ghanaian investment community and how to take advantage of them.
First, is the Treasury bill which is a product of the Bank of Ghana on behalf of the Government of Ghana. It involves lending your money to the Government at a fixed interest rate. This rate is fixed and there is very little or no risk at all when it comes to payment.  The Treasury bill is in form of 91-day bills, 182-day bills or 364-day or 1-year note. Each of these bills has separate fixed rate interests and mature after such days after which the Government will repay the principal plus the interest on it to the investor. Most commercial banks and brokerage houses in the country offer this investment on behalf of the Bank of Ghana. It is safe and short term.
Another investment in Ghana is the Certificate of Deposits (CD). This investment is a financial document showing that a person or organization has a specified sum on deposit at a bank, usually for a set period which comes with an interest rate. Most large companies in Ghana invest in this and very few individuals get the chance to invest in this because in involve very high amounts.
Fixed deposits are another form of investment in Ghana offered by most commercial banks at attractive rates. They are safe and good for low risk takers or investors. Most people also consider savings accounts of the various commercial banks as investment option. In Ghana for instance, banks offer attractive interest rates on the accounts of money savers hence people prefer them to other investments.
Investors must note that these short term securities are good especially for low risk takers but must be understood properly. These are not good for all investment goals especially those targeted at creating wealth. Most of the time people used these investment options to maintain the value of their money over some time.
Keep learning about them and take advantage of them.
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