AN APPRAISAL OF RISK FACTORS PECULIAR TO COMMERCIAL REAL ESTATE, STOCK AND BOND INVESTMENT PORTFOLIOS IN NIGERIA

This study assessed the risk factors that determined performance of stock-bond portfolios diversified with commercial real estate between years 2006 and 2015. The ten-year study period was segmented into two periods namely the pre-market crash (2006-2008) and post-market crash (2010-2015) periods. Data for the study was collected via questionnaire administration on the most active stock brokerage firms and managers of the selected commercial real estates in Nigeria. Analysis of the data collected was achieved via the use of multiple regression. Findings showed that the risk attributable to commercial real estate was determined by six factors- pre-lease issues, project cost change, inflation, government approvals, exchange rate and construction management style. In the case of stocks, during the pre-market crash period, two factors- the global economy and government monetary policies significantly influenced stock investment risk while five other factors namely inflation, economic instability, change in government, government’s anti-corruption drive and crash in oil Prices were found to have significantly influenced post-crash market risk. The study concluded that portfolio managers need to understand and estimate, in mathematical terms, the factors determining risk at different market periods in order to make accurate judgment on the portfolio investments of their clientele. The study recommends that portfolio managers need to estimate the impact of risks attendant to different investment options per time before portfolio construction or review is carried out was recommended