Investing in Agriculture Provides High Return for Beginner Investors
The country’s top trading magazine reports that the agricultural sector is a key driver of the Ghanaian economy, contributing an estimated 21.3% of the GDP. If you’re just getting into investing and aren’t quite sure where to begin, these numbers will help point you in the direction of agriculture, a rapidly growing sector that will allow you the chance to dip your feet into investing without much risk. If you’re just starting out, there are a few things you’ll want to consider before becoming one of Ghana’s most successful traders.
Consider the Legal Risks
Before getting started, it’s important to ask questions, especially in the Ghanaian market. While this does include comparing the risks against the rewards, it also includes legal questions such as whether or not the company or asset is licensed with the Ghanaian or international government, as well as the past performance of the stock, bond or commodity. Here, it is important to familiarize yourself with the investment in regards to how it usually performs, what it entails and what is required to ensure it performs well (if you’re investing in properties, for example).
Choose a Sector with Rapid Growth
As an amateur investor, you want to maximize your potential for return while minimizing the risk. Investing in a sector with rapid growth is one way to do this, and doing so ensures you’re investing in a sector of the national economy that can benefit from your money. Seeing as Ghana imports over USD $1.162 billion worth of rice annually, there are great opportunities to be found in the investment of local crops and agriculture. Because of the current constraints to agricultural production in Ghana, there are also high returns to be found in investing in the storage side of agricultural businesses as well as solar storage facilities.
Diversify Your Portfolio
As a beginner investor, one of the easiest way to reduce risk is to diversify your portfolio. The agriculture industry in Ghana is so diverse that this isn’t very hard to do. In Ghana, you can easily own stocks across different companies in the same industry. Investing in actual commodities such as rice or other crops is done by buying and selling contracts for future crops at set prices. This is one type of investment in the agriculture industry that can be compared against an investment into solar crop storage facilities, for example. Diversifying a portfolio will help protect you in case one performs badly and can be done in the same industry or across others that are generally low-risk and highly recommended, such as financial services, construction and crude oil. All of these are highly recommended as safe investments for beginner investors in Ghana in 2019.
An Investment into the Future of Ghana
Any time you decide to invest your money into the Ghanaian economy, you are investing in the future of the country as a whole. While there currently seem to be big returns for investments made into Ghana’s agriculture industry, those returns will be felt by the economy as a whole and will help contribute to a better future.
Written by: Katlyn Eriksen