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New year: new dreams, new challenges, new threats and new opportunities. There are many ways to make money – but many, many more ways to lose it. Investment Owl specialises in both wealth creation AND wealth protection. They are equally important. In Uganda life, the economy, inflation and investor confidence are closely linked to politics. We are now just 13 months away from the next general election and that should be informing where you put your hard-earned money.

Just before Christmas I wrote about how NOT to lose money and you can read that here. Now that we are in 2020 I wanted to suggest five things that you should be doing to protect and grow your wealth as a Ugandan investor in 2020. FREE ADVICE AS FOLLOWS!!!

1.     Currency: The Uganda Shilling will weaken against all major currencies over the coming months. Between 30 January 2010 and 30 January 2011, and again between 30 January 2015 and 30 January 2016 the Shilling, lost 18% (EIGHTEEN PERCENT!) against the US Dollar. Treasury bonds and bills really don´t look very attractive when you know that. If you have UGX then convert now and invest in $ or £; if you have $ or £ don´t be tempted to convert by what looks like a great rate.

2.     Inflation:  All forecasts suggest that inflation will trend at around 5% in 2020 and higher in 2021. So in real terms your investment must be paying more than 5% per annum for you not to be losing money in real terms. Find investments that contractually guarantee a rate higher than this. Aim for 8% and above in a USD or GBP investment – NOT UGX

3.     Liquidity:  In an uncertain world property can be the most illiquid of assets. I have clients that have been trying to sell a particular property for some years. Never hold more than 50% of your wealth in property. Instead find asset-backed investments that allow you to get all your capital and a good return back in no more than a 2 year period. And always keep at least 10% of your wealth in cash.

4.     Location:  Diversify, diversify, diversify! With elections due in Uganda and Kenya through 2021 and 2022 East Africa is not at its most stable. Most experts recommend that 25% of our wealth should be invested outside East Africa in jurisdictions with a strong and impartial legal system and a robust financial services regulator. Europe and the US offer regulated property investments that pay annual returns of between 10% and 18% and offer an exit option without loss every 12 months. Off-shore investments also don´t attract withholding tax unlike those in Uganda

5.     Protection: A credible investment will offer a high level of assets that back your investment. Those assets will be managed and controlled by an independent person who is legally compelled to act in your interests and to return your capital and interest in full and on time. Make sure that you see proof that your hard-earned money is protected.

We have carried out the due diligence for a number of $ and £ investments that offer a return of between 9% and 18% per annum. You would be investing for 24 months or less in European property and benefit from full capital protection. The minimum investment starts at just below 50m UGX. These look like a much better option than the bonds and bills that your bank will be promoting this year.

If you would like the investment memorandum for this type of investment – or to meet and discuss the options – just email me: jon@investmentowl.com

Happy new year!!!

Written by Jon Bennion-Pedley