In Summary
  • In most cases, the recommended selling price is that which will give you a minimum net profit of 10 per cent.
  • This is not the only way to make money from shares.
  • You can also buy shares whose company pays out dividends, hold them for the long term and earn annual dividends.

 

 

Have you ever wondered how some people are always making money from trading in shares at the Nairobi Securities Exchange (NSE)?

The answer to this is probably yes.

But while you’d wish to make some of that money yourself, you do not know how to get started, leave alone start buying and selling.

Trading on the NSE is not the rocket science it looks like. For a start, you need to know the basics.

WHAT ARE SHARES?

A share is a unit of ownership interest in a particular company or a tiny fraction of a company.

In this case, this unit will be of a company that is listed and trading on the Nairobi Securities Exchange.

For example, it could be Safaricom or KCB shares. In order to make money from these shares, you will need to buy them at a discounted or fair price, and sell them at a price that is higher than your buying price.

In most cases, the recommended selling price is that which will give you a minimum net profit of 10 per cent.

This is not the only way to make money from shares. You can also buy shares whose company pays out dividends, hold them for the long term and earn annual dividends.

GETTING STARTED

There are a few things you will need before you can start buying and selling shares on the NSE.

The most critical will be the CDS account.

You will get this account free from a stock brokerage firm or investment bank that is licensed by the Capital Markets Authority.

Page 1 of 2