A Beginner’s Guide On How To Invest In The Kenyan Stock Market

The COVID-19 pandemic has gotten everyone asking how they can make some extra money. We have people, brands, and firms, slashing spending as they look for creative ways to invest the little they have to make some extra money.

Economies world over are battered and facing a myriad of challenges catalyzed by the pandemic, making it difficult to know where and when to invest.

For me, I find the stock market the easiest place to invest and make good returns without having to break your heart over other financial scams and schemes. The stock market of any nation or country is normally the heartbeat of the economy. It gives you an indication of how the economy of the country is doing and how the future is. It is data-driven and this is the essence as to why it’s the best place to invest and make some genuine and honest wealth.

The stock market can help you make a lot of money, but you can lose all your money if you are tempted to invest randomly without knowing the nitty-gritty of the market. Lack of information is what screws people up and picking information from the club, WhatsApp groups, and social media. One needs professional help and genuine research to be able to understand the market and make considerable returns.

If you are thinking of investments that could beat inflation and also give you good returns, one option might be to start investing in the stock market. If you have decided to do the same and go for it all by yourself, it’s not a bad idea. The stock market, when properly understood, can help you make a lot of money, but you can also lose all your money if you are tempted to invest randomly without knowing the nitty-gritty of the market. Research should always be your backbone.

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It might surprise you to learn that a KES 100,000 investment in the 20 Share index 10 years ago says Safaricom PLC would be worth nearly KES 1.2 million today. Stock investing, when done well, is among the most effective ways to build long-term wealth. We at www.sokodirectory.com are here to teach you how.

Read More:

• When Should You Enter and Exit the Stock Market?
• Demystifying Short-Selling in Kenya’s Stock Market

There’s quite a bit you should know before you dive in. But before we give you the issues that should guide you, your character as an investor is critical to understand. The following should form the basis of your investment character and through this, your investment advisor can guide you better, knowing how far he or she can push it:

1. Understanding your RISK tolerance; is critical because it’s the gauge that defines everything. How would you react if you lost say, KES 1,000,000? Will you cry foul? Will you commit suicide? Will understand and buckle up? This is where the red flags as an investor come from.

2. Access to Information; It’s important to understand that flow of information has changed everything. How we deal, how we engage, how we move from place to place. It’s critical to know how access to the right information will be for you because the markets are influenced every day by current news from diverse sources and it’s paramount to understand these.

3. Liquidity or Cash flow aspect; It’s important to understand your cash flow as an investor. Understand the pattern of how you access money and how you apportion it because this will define how you take advantage of opportunities that will present themselves to you on your journey as an investor. Cash flow is everything. Failure to have a beat on it will make you hate your journey and believe that the markets are the worst place to be in. Know when to have ready money to get in, at the right time and moment.

4. Your Emotional Intelligence; This is the most important aspect of all. Your emotional intelligence, which couples up to your emotional stability, your emotional understanding and most of all, how you hold up under intense pressure is what every trader assesses in their client.

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