With just a few weeks into the new year, many people remain upbeat about their goals and hope this will turn out to be their best year yet.
You have probably put your best foot forward to make this a year of growth and scaling greater heights, be it in careers, family life, spiritual journey, health and of course, finances.
If you are wondering where to grow your money this year, financial adviser Mary Mwangi has some practical tips for both seasoned and first-time investors.
“Safe investments mean channels that give a guaranteed return with low to zero risk of loss. These include Treasury bills and bonds, fixed deposit accounts, money market funds, and specific insurance investment plans,” she says. “These channels offer a steady income and security for your principal.”
But for investors willing to accept more risk, higher returns are possible. “Absolutely. The stock market has been performing well, as have real estate and commercial papers from private companies. The key is to understand the volatility of these investments and your own risk appetite. You must acknowledge that while the potential returns are high, you could also lose part of your investment.”
Comparing traditional investments to stocks and real estate, Mary notes that while bonds and fixed deposits are reliable, they generally yield lower returns. “Traditional investments are steady and low-risk, but stocks and real estate can deliver higher returns over the long term,” she explains.
Digital assets like cryptocurrencies, she adds, remain largely speculative. “They are mostly ‘invest and wait’ platforms. They serve to diversify a portfolio but should not form the backbone of one’s investments.”
Balancing risk and return is a matter of life stage and financial goals.
“Investment aims to build, grow, and preserve wealth. Early on, you may want to keep your seed money in guaranteed platforms. As your portfolio grows, you can allocate some funds to higher-risk, long-term speculative options. Your personal risk appetite informs most investment decisions.”
Common pitfalls
Common pitfalls for Kenyan investors include following the crowd without understanding the investments. “Failing to do due diligence is a major mistake. You need to understand exactly what you’re investing in, how it works, and the pros and cons. Make informed decisions.”
On liquidity, Mary recommends keeping a portion of funds easily accessible. “Cash or liquid investments should cover short-term goals and emergencies—at least three times your monthly budget.
The rest should be directed toward long-term goals with clear timelines.”
Looking at promising sectors for 2026, she highlights infrastructure, health, agriculture, technology, and clean energy, noting their significant growth potential both locally and globally.
Current economic factors also influence investment choices. “High inflation pushes investors toward high-yielding investments. Currency fluctuations make dollar-based investments attractive.
Stable, long-term investments continue to attract investors,” she says.
For those starting with a modest amount, such as Sh100,000, Mary advises tailoring investments to risk tolerance. “Depending on your appetite, you could consider equities, Treasury bonds, bills, or goal-linked insurance plans. Special funds exist, but Sh100,000 is often only sufficient as a top-up rather than an initial deposit.”
Rebalancing portfolios
She also emphasises the importance of reviewing and rebalancing portfolios. “Do so anytime there is a major change in life, income, or the market—or when you’ve achieved a goal—to ensure funds are redirected appropriately.”
For first-time investors nervous about entering the market, Mary’s advice is simple: “Start small, invest consistently, set clear short-, medium-, and long-term goals, and choose investments that align with those goals. Know your risk appetite, research thoroughly, consult professionals, and avoid simply following the crowd.”
For investors looking at the Kenyan market through 2026, Monicah Mwaniki, co-founder and chief executive officer of ArvoCap Asset Managers, says local assets are likely to remain resilient despite lingering global uncertainty.
“Kenyan government bonds and listed stocks should provide relative safety into 2026, largely due to lower inflationary pressures. This helps buffer investors against currency shocks and makes local yields more attractive.”
She adds that improved government finances, partly driven by privatisation efforts, could support fiscal spending and incremental development, providing a tailwind for consumption and overall economic activity.
While higher-return opportunities often come with higher risk, Monicah says this does not mean investors should avoid them altogether. “Equities inherently carry higher risk because of the cyclical nature of business and the economy,” she notes.
“However, with prudent diversification and sound portfolio management, it is possible to manage those risks and capitalise on market volatility.”
On fixed income investments, Monicah expects continued stability. “Fixed income securities should perform well on an absolute basis as government borrowing demand eases and alternative sources of capital are tapped,” she says. “Lower inflation also creates room for more flexible monetary policy, which supports bond markets.”
Looking ahead to equities, she is cautiously optimistic. “We believe the Kenyan stock market will continue to show upside momentum, supported by attractive valuations and relatively high dividend yields, especially within the banking sector,” she says. She also expects credit growth to strengthen as fiscal policy becomes more expansionary in the run-up to elections.
Successful investing
Many Kenyan investors, she observes, struggle not because opportunities are lacking, but because of how decisions are made.
“Chasing returns without understanding risk, overconcentrating in a single asset like property or shares, confusing saving with investing, and relying on tips from WhatsApp groups or social media often undermines long-term growth,” Monicah says. “Successful investing is not about finding the perfect opportunity, but about building a disciplined, diversified strategy aligned with one’s goals, time horizon and temperament.”
For someone with Sh100,000 to invest, Monicah says the priority should be preserving value. “The first step is placing money in an investment that beats inflation while protecting capital,” she explains, noting that professionally while protecting capital,” she explains, noting that professionally managed fixed-income products can offer steady, structured growth with minimal volatility, especially for investors seeking discipline over speculation.
And for first-time investors who feel anxious about entering the market, Monicah says hesitation is natural—but inactivity carries its own risks. “Fear is normal, but staying out of the market entirely is often riskier than entering it thoughtfully,” she says.
“Start with clarity, invest money you don’t need immediately, choose products you understand, and focus on consistency and patience. Over time, discipline and a long-term view turn uncertainty into confidence.”
Clarity of purpose
Another key consideration when deciding where to invest in 2026, according to Alfred Mathu, lead financial consultant and founder of East Africa Insurance Agency, is clarity of purpose.
“Every investment agenda is driven by several factors, but the first thing is always the investment objective,” Alfred explains. “Are you investing short-term, medium-term, or long- term? That clarity determines everything else.”
Age and risk appetite, he emphasises, must always be factored in. “It would not be prudent for an older person to go into very long-term investments,” Alfred cautions. “A young person has time on their side, but someone closer to retirement needs liquidity and support. Different investments come with different risk levels, and your age should align with your investment horizon.”
He also warns against concentrating funds in a single investment. “Always have a cushion,” Mathu advises. “If you’ve sold property and set the money aside for something as critical as your children’s education, don’t put it all into one instrument. Diversify so that even if one investment underperforms, you still have financial support elsewhere.”
Ultimately, Alfred says diversification and regular review are non-negotiable. “Markets change, life changes, income changes. Investors should review their portfolios whenever these shifts happen to ensure their money is still aligned with their goals.”
For short-term investors, he says security of capital should take precedence over returns.
“When someone is investing short-term, their primary agenda is not high returns—it is the security of the funds,” he notes. In such cases, he recommends money market instruments, which pool funds from multiple investors and place them in low-risk government and fixed-income securities such as Treasury bills, Treasury bonds, commercial papers, debentures, and fixed deposits.
“The objective of a money market is to give you a competitive return while enjoying optimal security,” Alfred says. “You earn interest daily, you can withdraw or top up your funds at any time, and that flexibility makes money markets ideal for emergencies or short holding periods—especially if you’ve sold an asset and are waiting to redeploy the funds.”
For investors with a longer horizon—typically five to 20 years—Alfred points to what he describes as contractual or medium-term investments. These are suited for goals such as building a home, starting a business, or educating children.
“Here, you’re not only growing your money, but you’re also enjoying coverage against uncertainties like death, disability, or critical illness,” he explains. “The duration often depends on age—a younger person may go for 15 or 20 years, while someone older may prefer a shorter term.”
Long-term investments, he adds, are largely about retirement planning. “Retirement is the time when you allow your money space to work for you,” he says. “If someone is 30 years old and plans to retire at 60, they have 30 years to build a retirement fund through a retirement savings account, which may be a pure investment or one combined with life or disability cover.”
Age and risk appetite, he emphasises, must always be factored in. “It would not be prudent for an older person to go into very long-term investments,” Alfred cautions. “A young person has time on their side, but someone closer to retirement needs liquidity and support. Different investments come with different risk levels, and your age should align with your investment horizon.”
Investing in cryptos
On digital assets such as cryptocurrencies, Alfred says they should only play a diversification role. “These instruments tend to carry medium to high risk,” he notes. “The idea is not to put all your eggs in one basket, but to spread risk across different platforms—real estate, bonds, shares, money markets, or even alternative investments, so that if one is affected, another can cushion you.”
Asked what advice he would give someone with Sh100,000 to invest, Alfred returns to the same principle: objective first. “Why do you want to invest that money, and for how long?” he asks.
“If this is the only money you have, you cannot afford to gamble. You must be cautious and avoid overexposure to risk. But if it’s money you can afford to set aside for a long time, then higher-risk, higher-return options can be considered.”
Common mistakes Kenyan investors make, according to Alfred, include failing to understand investment risks and not seeking professional guidance. “Some people invest without understanding the chances of loss, and when losses occur, it affects them deeply,” he says. “If you go in with clarity about the risk levels, you can plan better.”
