Joanne Kabiru is an operations specialist with a 20-year experience in the East African stock markets. She started out in the retail stock segment providing stock trading services to individual investors before switching to global stock trading 12 years ago. She also offers personal finance coaching directly to clients and additionally through platforms such as ‘I Am Network’, an online mentorship programme she co-founded. The seasoned stockbroker shares her insights on the stock market and offers tips for beginners looking to invest in the stock market.
Locally, people prefer investing in land, yet they should also consider alternative investments such as stocks, bonds, bills and insurance. The best investment advice I would give anyone is not to put all eggs in one basket. You should have diversified investments, some of which are the stock market, others within the government securities – treasury bonds and treasury bills, others within insurance, others within ‘chamas’, and others in land.
Brokers only guide, not control your investment. You need to first open a Central Depository System (CDS) account with a stockbroker. You cannot transact in shares without a CDS account. You can have more than one CDS account. Shares do not sit directly with the broker, they sit with the Central Depository and Settlement Corporation (CDSC), which is an independent body. To alleviate the concerns around the security of stock investments, the CDSC offers investor services such as online account services and e-statements which help investors keep track of their investments and hold their brokers accountable.
Which stock to invest in? You first determine your budget; how much you are looking at investing. Second, look at the stock’s performance and how the company is running, since that will determine the amount of money you will make. That will guide you in establishing which stock has a future and is worth your investment.
You do not need a lot of money to invest in the stock market. The biggest myth people have is that you should have a million shillings to invest in the stock market. I will use a simple example of Safaricom shares. Currently, Safaricom shares are trading at Sh35. This stock was initially sold in the market for Sh5 during the Initial Public Offering. For someone who held onto their shares since then, from Sh5 to Sh35, you see they have made seven times whatever they invested. So even if you invested Sh500 […]
