The basics and intricacies of investing in stocks

On August 2, 2019, the Nairobi Securities Exchange 20 Share Index closed at 2,586. It was the first time since March 13, 2009, that the index had fallen below the 2,600 mark and sent jitters that the bears were mauling investor wealth to lows last witnessed during the hangover of the 2007/08 post-election crisis which were later amplified by the global financial crisis. The market has since clawed back marginally, closing Monday, December 9 2019’s trade with the 20 Share Index at 2,609.

Peter Wambu’s book The Ultimate Framework for Success in Shares provides a good straddle of both the basics and the intricacies of investing in stocks. Like many others delving into the subject, the book argues that the framework lies in “knowing the right stock, the right price and the right time”. It unpacks this critical tripartite through discussing the need for clarity on one’s investment strategy as to whether they are income investors targeting dividends; growth investors generally targeting small entities with promise for rapid expansion; and value investors who chase targets the upside of undervalued companies.