Good day house
Does FGN depreciate in value?
The reason being that I login to my afriinvest account and I discovered that my FGN BOND off N5000 is now N3800
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Good day house
Does FGN depreciate in value?
The reason being that I login to my afriinvest account and I discovered that my FGN BOND off N5000 is now N3800
Yeah, that can happen and it’s normal. Your FGN bond hasn’t really lost value unless you sell it now. What you’re seeing (₦5000 to ₦3800) is just the current market price, which goes up and down mostly because interest rates have increased. If you hold it till maturity, you’ll still get your full ₦5Read more
Yeah, that can happen and it’s normal.
Your FGN bond hasn’t really lost value unless you sell it now. What you’re seeing (₦5000 to ₦3800) is just the current market price, which goes up and down mostly because interest rates have increased.
If you hold it till maturity, you’ll still get your full ₦5000 plus interest.
See lessYes — FGN Bonds can temporarily drop in value, but that does not mean you are losing money permanently (especially if you hold till maturity). Since you mentioned your ₦5,000 FGN bond on Afrinvest is now ₦3,800, here’s what is happening: Why Your FGN Bond Dropped from ₦5,000 to ₦3,800 FGN Bonds do nRead more
Yes — FGN Bonds can temporarily drop in value, but that does not mean you are losing money permanently (especially if you hold till maturity).
Since you mentioned your ₦5,000 FGN bond on Afrinvest is now ₦3,800, here’s what is happening:
Why Your FGN Bond Dropped from ₦5,000 to ₦3,800
FGN Bonds do not depreciate permanently, but their market price fluctuates because of:
1. Interest Rate Changes (Most Common Reason)
When new FGN bonds offer higher interest rates, older bonds with lower interest rates become less attractive.
Example:
You bought FGN Bond at 12%
New bonds are now offering 17%
Investors prefer the 17% bond
So your 12% bond price drops in the market
That’s likely what you’re seeing.
2. Demand and Supply
If many people are selling FGN bonds, price drops.
If many people are buying, price increases.
Important: You Only Lose If You Sell Now
If you hold till maturity:
You will still receive:
Your ₦5,000 principal
All interest payments
So the ₦3,800 is just:
Market price (if you sell today)
Not your final value.
Simple Example
You bought:
₦5,000 FGN Bond
Market shows:
₦3,800 (if sold now)
But if you wait till maturity:
You still receive ₦5,000 + interest
This Happens to All Bonds (Even Government Bonds)
Even though FGN bonds are:
Very safe
Backed by Federal Government
They still fluctuate in price.
My Advice (Especially Since You’re Still Growing Your Investments)
Since you’re already investing in:
Treasury Bills
Bonds
Equities
You’re actually building a very good diversified portfolio 👍
For small amount like ₦5,000, I recommend:
Don’t sell
Hold till maturity
See lessFGN Bonds do NOT behave like your bank savings. Yes. Their value can go up and down on the screen. The Issuer Your bond is issued by: 👉 Debt Management Office Which means: ✓ backed by Federal Government ✓ considered low risk (in terms of default) Let Me Explain With a Simple Story Mama Ngozi lends ₦Read more
FGN Bonds do NOT behave like your bank savings.
Yes.
Their value can go up and down on the screen.
The Issuer
Your bond is issued by:
👉 Debt Management Office
Which means:
✓ backed by Federal Government
✓ considered low risk (in terms of default)
Let Me Explain With a Simple Story
Mama Ngozi lends ₦5,000 to the government.
The government promises:
• to pay interest every year
• to return ₦5,000 at maturity
That ₦5,000 is called:
👉 Face Value (your real investment)
Oya… Relax Let Me Explain
Why Is It Showing ₦3,800?
That ₦3,800 is:
👉 market value
Not your actual loss.
What Is Market Value?
It is:
✓ what someone is willing to pay NOW if you sell
Key Truth
👉 Bond price moves up and down daily
Why Does Bond Price Drop?
1. Interest Rate Changes (Major Reason)
If new bonds offer higher interest:
• your old bond becomes less attractive
So:
👉 price drops
2. Market Demand
If fewer people want your bond:
👉 price falls
3. Time to Maturity
Longer duration bonds fluctuate more.
VERY IMPORTANT (Don’t Miss This)
Did You Actually Lose Money?
👉 NO — unless you SELL at ₦3,800
If You HOLD Till Maturity
You will receive:
✓ full ₦5,000
✓ plus all your interest
So What You Are Seeing Is:
👉 Unrealized loss
Let Me Be Honest With You
Many people panic because:
• they think bond = fixed value
But in reality:
✓ bond price moves
✓ but maturity value is fixed
When Should You Worry?
Only if:
• you urgently need to sell now
When Should You Relax?
If:
• you can hold till maturity
Simple Truth
• Sell now → you may lose
• Hold → you recover full value
What You Should Do Now
Option 1: Hold
Best for:
✓ long-term investors
Option 2: Sell
Only if:
• you need cash urgently
Final Truth
Your ₦5,000 did not disappear.
It is just:
👉 being priced by the market
Let Me Leave You With This
In investing, there are two values:
• market value (changes daily)
• actual value (what you receive at the end)
Smart investors focus on:
✓ the final value
Not temporary fluctuations.
Rose Ejituru
See less