We’ve all heard the term investment used by our parents, friends, or even relatives at some point in our life, but we couldn’t quite grasp what it meant, right? If that is not the case, I will immediately point you in the direction of how to begin investing and provide you with any other information that may be useful.
First of all, you need to get a grip of matters such as Bonds, Shares, mutual funds and ETF’S . Having Shares is basically owning part of the company, and you get some of its assets and profits. A bond is a type of loan. When you buy a bond, you’re lending money to the bond issuer which could be the government, a government agency, or a firm in exchange for repayment plus interest by a certain date or maturity. An ETF (exchange-traded fund) is a type of investment that combines multiple equities or bonds into a single investment that may track an index. You own a piece of the underlying portfolio when you invest in an ETF. ETFs are also traded on major stock exchanges. Similar to an EFT , a mutual fund shares represents investments in a variety of stocks and other securities and mutual fund companies, banks, and brokerage firms are the ones that buy and sell the mutual funds.
To understand more about this securities , you can look up videos on YouTube especially the Nairobi Securities Exchange(NSE) channel as they frequently hold up talks on securities .The NSE provides a platform for the buying and selling of securities by public listed companies .You can also check Centonomy Campus Edition which even offers classes on personal finance .There are many other websites that can be used to inform you more about securities and financial instruments. It is also important for you to familiarize yourself with different stock market terms so as to understand what is happening.
For you to start trading in this securities, you’ll need to open a CDS (Central Depository System) account which is basically a trading account. To start a CDS account, complete out a CDS 1 form and submit it to your selected broker together with a copy of your original national ID, two color passport-size pictures, and a copy of the KRA certificate. You can only have one account with each agent. You can use a broker that provides an online trading platform because it allows you to sell and purchase shares from anywhere and at any time. Note that a broker can charge a regular commission or fee for trades that are normally regulated by the Capital Markets Authority (CMA). Check the NSE website( nse.co.ke ) or you can download their app from playstore /Appstore to check the market status and price lists of the financial instruments.
It’s better for one to visit their investment bank whereby they’ll guide you in terms of the money you need to invest and advise you more about the financial instruments.
Ruth Nyakerario Momanyi