I recently got the chance to chat one on one with an investment banker. I had a number of questions for him. One in particular was on what he thought to be the best investment vehicles he would recommend for Zimbabwean investors or those looking to become investors. Here are some of the nuggets he dropped in our chat.
1. Real estate
Real estate is a viable investment option in Zimbabwe, providing stability and a hedge against policy inconsistencies. With a history of economic instability and the risk of losing investments due to government actions, real estate can be by far one of the best means to protect your money while earning on your investments.
The majority of real estate transactions are conducted in USD$, which accounts for over 75% of the market, reducing exposure to devaluation risks as compared to trading largely in ZWL$. This makes real estate an attractive option for risk-averse investors. So if you’re looking for somewhere to invest without worrying too much about making huge losses, real estate is definitely for you.
2. The stock market
The stock market is another avenue you may want to explore, with the VFEX covering USD$ investments and the traditional ZSE handling ZWL$ investments. Investing in the stock market requires careful consideration and understanding of the stocks you will be invested in. Short term Speculation schemes can be risky, especially in volatile market conditions as ours.
It is much safer to invest for the long term. It is key to get proper mentorship and an investment strategy aligned with your risk appetite to allow the stock market to offer you attractive returns in the long term. Warren Buffet’s famous quote, “Risk is investing in what you don’t know,” highlights the importance of knowing what exactly it is that you are investing in and for what reason.
3. Micro-finance & Money Lending
In a highly informalized economy, microfinance or lending business presents an opportunity for investors. The majority of the economy operates in the informal sector, with USD$ transactions being more prevalent. accessing USD$ funds from formal banking institutions at low interest rates can be challenging.
This creates a niche market for microfinance institutions, which cater to the needs of individuals and businesses in this informal sector. However, you must be exercise caution in conducting thorough due diligence before lending money. It is crucial in order to mitigate risks associated with this investment avenue.
So there you have it, these are your top 3 longterm investments that may be highly productive for you in the long run. Overall, investing in Zimbabwe’s economy requires careful evaluation of the prevailing economic situation. Real estate can provide stability and protection against policy inconsistencies, while the stock market, with proper understanding and mentorship, can offer enticing returns.
Microfinance presents opportunities in a highly informalized economy but necessitates diligent risk assessment. By understanding the unique dynamics of Zimbabwe’s economy and making informed investment decisions, you can navigate the economic situation at hand and potentially reap great financial rewards.
Guidance & Motivation
⚜️ FINEVI || Coach Russell ⚜️
Wealth Accumulation Coach
Certified Speaker & Author of “The Financial Handbook | Building Personal Wealth”