Investing in the stock market in Kenya? Here are some tips

  

Date Posted: 3/14/2012 4:48:06 AM

Posted By: sashoo  Membership Level: Silver  Total Points: 382

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Investing in the stock market is one of the ways to make your money grow. It is not however going to be easy and cheap if you do it your own way. The following tips may just maximize your earnings and take you a notch higher:

1. Read between the lines:
Price rise in a lot of stocks may be speculative and may not be backed by any fundamentals. Try and see why some figures are rising. Check data from the exchanges.

2. Diversify your stocks:
This is best done after you've gained some experience. Even as you diversify, you must diversify with well-known players. This is because new players may be uncertain, and therefore risky. Only go for new players after having done enough research and gotten reports from reputable brokers.

3. Identify safe stocks:
The safest way to enter the market is by investing in established large companies. Entering the market through initial public offers is in itself a mistake because companies just getting listed for the first time in the stock market are more risky or uncertain than the already established companies on the stock market.

4. You have to be vigilant:
You must choose your broker carefully to eliminate any form of fraud. Although now, most banks offer stock brokerage services and can be trusted brokers. Equity bank stands out because it offers online brokerage services, which means that instant service is offered to customers, unlike other banks. If you are going to rely on a broker for investment advice, choose one that has the best research capability.

5. You must be diligent:
Get yourself organized and keep your papers in order. Check your contract notes and file them away safely. If you have all your documents at a glance, it's easy to spot fraud and take action against it.

6. Know when to sell:
This is a

very important factor to consider. You must not sell when prices are low. Sell when prices are optimally high. This is when prices are bound to fall after being high for a period of time, when they can rise no higher. To be able to know this time, you have to consider market trend patterns and also advice from experienced brokers, who may be able to tell between market "highs" and market "lows".

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