Sorry, the above statement is alarmist but that what a friend of mine shouted at me yesterday when I ?insisted that in the long run investing on Stock Market is beneficial and even better than bond market. The following are his reasons for shouting that
First in the ?NSE information does not flow fast enough and the brokers are slower than snails. Apparently sometime back one of the counters he had invested on was gaining, after three days of consecutive gains, my friend rushed to his broker to sell the shares, it took the broker 3 days to sell the shares. Sadly the shares were sold on? the day the counter shade off all the gains leaving my friend on a negative territory. To him after that the only way to make money on NSE is through trial and error and probably good luck.
The prices are never high enough.? Call him capital gain investor but he strongly believe that with the money he has investing for the so called cash flow is a waste of time. He is working with less than 50k which he has spread across four counters. The last dividends he got was around 1k and the next one he is expecting from Safaricom will not be more than Ksh.300. The question is,? would you wait for a whole year for just 3k combined in the name of cash flow investment?
When is low means low in this market. When will the prices of Safaricom shares be at rock bottom. According to him almost every day he ask the so called market experts about the trend. The answer is always they are expecting price gains in the coming days. Sometime such predictions come to pass but not for long. The classic example is where he is being told of the market share rally because of the foreign investors , a few days later, ?the same share prices are falling like a dropped orange.
Develop perspective and patient. He explained that he is a very patient person according to his own measurement but for how long should that be. He looked up with a beaten expression and said. ?This is a great advice and deep inside I know I should be but for how long??