Trading Stocks

Make Money Kenya

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Posted by on Monday October 22, 2012 at 16:45:59:

In the Kenyan stock market, there are two kinds of investors - Those who invest in stocks for the sake of dividends and those who do so for capital gains.

Capital gains are the extra income you get when you trade stocks after recovering your initial investment while dividends on the other hand are the little returns on your investment in a company while you remain a shareholder.

You can actually make a good living by trading stocks in Kenya if you know the right time to buy and sell in order to make profit.

Stocks are like assets which can easily be converted to cash or other forms of wealth and you can make a profitable income from it if you invest wisely.

There are certain times in the market when a particular stock would be overpriced and if you were are shareholder, that would be a good time to sell rather than waiting for it to fall again. You can make money by selling at the peak and then investing in other stocks that are underpriced.

The stock market has its boom and rock bottom periods which depends on the market sentiment and how investors are willing to stake their money on them. More attractive stocks tend to rise in share price while untrusted ones tend to lose value.

Some people trade stocks based on time periods like on a particular month or quarter period of the year while some trade stocks based on days of the week. Some also trade stocks based on just price action while another grouped may also trade stocks based on market fundamentals or news reports. Whichever way you've decided to trade stocks, the focus should be on capital appreciation.

In Kenya, share prices tend to rise and fall during certain periods and depends on the market forces involved. Knowing when to buy or sell and doing so can really help you to achieve success in the long term.

How does one then make profit by being a stock trader in Kenya? Well, let me give a scenario here: Assuming that Stock A is priced at a low kes20 after falling from kes40 due to a bad market report, chances are that with improved company performance, you may be in a good position to make money buy buying the stock, having known its stock price history and future market outlook if it doesn't have any serious long term liabilities. Buying a stock at a low point is more likely to be a good investment and you then cut your profit by selling it when it appreciates to a higher price within a year.

Another stock may also be a good investment if it was from a promising new company that has a lot of publicity and then you buy into its ipo but only to sell about 3 months later after price appreciation.

During times of inflation, stock prices also tend to rise since there is a general rise in the prices of things in a country so holding on to stocks rather than cash can be a good investment decision as you cash can become worthless in such times while stock prices keep rising.

So, you can make money in Kenya if you are able to study market conditions and then make a good buy or sell decision as a trader. You just need to have the right financial knowledge, connect with a stockbroker and trade your stocks.