If you have N10 million to invest in January 2026, deciding how to allocate it requires more than just picking the “hottest” stocks or relying on commercial papers and bonds.
A smart investment strategy starts with defining your goal, which for most people is to earn returns that beat inflation while protecting long-term value.
Your portfolio should reflect your target return. If you aim for over 25% annual return, you must allocate more capital to higher-growth, higher-risk assets like equities or specialized mutual funds.
However, higher returns don’t mean reckless risks — balancing risk and reward through diversification, asset quality, and timing is key.
In today’s environment, beating inflation is not enough. While official inflation is at 14.45% (November 2025), many consider it understated.
With food prices and energy costs increasing, a realistic return target should be around 23% or higher. Risk-free assets like T-Bills (yielding 18%) and FGN bonds (yielding 17%) are modest, providing barely enough to preserve purchasing power.
Therefore, investment risk should offer 30% to 40% returns, especially for those wanting to grow their capital.
Your N10 million portfolio should target a return of 30% to 40% annually, focusing on a diversified mix of asset classes.
The Nigerian equities market continues to be one of the most attractive asset classes for investors seeking inflation-beating returns.
In 2025, the All-Share Index (ASI) posted an impressive 51.19% return, despite a brief pullback in the final months of the year due to profit-taking and policy uncertainty.
The growth in key sectors like consumer goods, banking, industrials, agriculture, and insurance powered this rally, with over 45 stocks delivering triple-digit gains.
As we enter 2026, focus should be on stocks with strong fundamentals, undervalued valuations, and solid dividend-paying capacity.
The Banking sector presents a strong opportunity for 2026, and January is the right time to take positions.
Many of the leading banks have now met the new capital requirements, exited forbearance, and are set for growth in 2026 without facing significant regulatory hurdles.
One of the most compelling reasons to invest in banks right now is their healthy valuation, with an average price-to-earnings (P/E) ratio of 3x, which is far more attractive compared to the consumer goods sector’s 26x P/E.
This means banks are relatively undervalued and offer great potential for capital appreciation.
This means banks are relatively undervalued and offer great potential for capital appreciation.
Most importantly, these banks pay dividends and are expected to declare their final dividends for the 2025 financial year in Q1 2026, which will provide a steady income stream.
The right stocks to pick in this sector include:
While Access Bank was the only one with a negative return in 2025, this could present a unique opportunity to enter at a lower price, as it is likely to bounce back in 2026 with strong growth.
By allocating N1.5 million into these stocks, you can expect capital growth alongside dividend income in 2026.
Companies like Presco and Okomu Oil in the agriculture sector have delivered impressive returns of 205% and 146% in 2025. With strong fundamentals and attractive dividends, they are expected to declare strong final dividends in Q1 2026, offering both capital growth and steady income.
Selected Stocks Across Various Sectors (N1 Million):
Investing in stocks like MTN Nigeria, BUA Foods, and Dangote Cement ensures exposure to telecoms, consumer goods, and industrial sectors, each providing a mix of capital appreciation and consistent dividends in 2026.
The Oil & Gas sector faced challenges in 2025, but companies like Seplat Energy and Aradel Holdings still offer impressive dividends, making them worthwhile for income generation. They may not have outperformed inflation, but they provide solid returns on the dividend side.
Funds like Stanbic IBTC Equity Fund and ARM Equity Fund are solid picks for long-term capital appreciation.
This allocation provides liquidity and ensures your portfolio remains balanced with lower-risk, predictable income. Funds such as the Fidelity Money Market Fund and the Access Bank Money Market Fund are strong choices for this portion.
They offer growth and protection against inflation.
Consider funds like Stanbic IBTC Infrastructure Fund or FBN Infrastructure Fund to tap into this growing sector.
They offer returns of about 17.90%. You can invest in funds like UPDC REIT and Skye Shelter Fund, which provide stable income and long-term growth.
With the MPR and inflation both expected to decrease, 30% of the N10 million should be allocated to the fixed-income portion of your portfolio.
Though this will give lower returns, it will provide a solid foundation, ensure capital preservation while still generating attractive returns in the lower-risk portion of your investment.
Treasury Bills, Savings Bonds, and FGN Bonds are ideal choices. After offering yields between 13% and 18% in 2025, they may still offer a good yield
Based on these allocations, the overall portfolio aims for a return of 30%-40%. The key drivers include:
Total projected return:
The N10 million portfolio is expected to yield N3.1 million in gains over the course of the year, with a balanced mix of growth and income to achieve an overall return of 30%-40%.