The majority of Kenyans cannot withstand the business segment of the news bulletin, specifically the stock markets and trading. Many people consider stocks to be the sore thumb sticking out in the hand of the economy. They dread the thought of understanding stocks. They don’t even want to try anymore. This explains why the stock market is considered a reserve for the elite in society.
The good news is that investing in stocks in Kenya is not even a fraction as hard as conceived on the minds of many Kenyans. It is even worth noting how a lot of the population is missing out on decent capital gains from investments by buying shares from different companies.
These are some of the tips you can use to help you ace investing in stocks in Kenya.
1. Have a reliable broker
The broker you engage when investing in stock has a role to play in your success. Brokers are the firms or individuals licensed by the Capital Markets Authority to buy and sell shares. You need to approach a qualified and experienced broker to act as your agent. They will guide you through the available stocks from different companies and make you go through the process of purchasing and trading.
Make sure you understand and are comfortable with the commission they charge on dividends.
2. Understand the best time to invest
There is no given best time to invest in stocks in Kenya, except that it is determined by your financial needs and goals. Some people prefer to look at indicators for the appropriate time based on the general performance of the company. Others prefer when the stock prices go down, as some look into the business development plans by the given company. Planning for the future: How to create a Financial Plan
3. Understand the risks involved
Just like in any other investment, investing in stocks comes with risks. Most of the risks come from events in the company or economic changes. You are never guaranteed of return on your investments. You can also experience a loss when the stock prices go down.
You need to understand all the risks and be sure that you won’t sulk when the worst happens. So if taking risks isn’t your thing, maybe it is better to say stocks aren’t your thing as well.
4. Get a favourable investment timeframe
You can either go for long-term or short-term investments depending on your preferences. The availability of stocks is determined by the rule of demand and supply. The best strategy would be to diversify your investments by investing in both short and long-term stocks.
5. Research
Money never comes easy so do your best to protect and grow the ones you get. This is to say, make sure you have basic information before you get down to business. Apply your research skills to know the proven stock performers you can invest in, and look up the companies and brokers you want to get involved with. It is only then that you will make an informed decision.
Go ahead, stop freaking out, and start out a little as you grow. Get your foot in the mud of the stocks. It might turn out to be your sleeping gold all this time.
Not sure whether it is time to save or invest or both? Check out this article Saving or investing, which way to go?
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