This was during the peak of the 2007 post-election skirmishes which led to a mortgage meltdown on the global as well as Kenyan economy. The economy had been disrupted and assets in the stock exchange were at record lows.
After asking me a series of questions, he told me that I should leave employment way ahead of our meeting because there were numerous opportunities around me “clothed as trouble.”
That fact has not changed. Look at the stock exchange and you will see prices falling 40 per cent lower than what they were before March 13, 2019 when Covid-19 was first reported in Kenya.
These prices have remained depressed following the uncertainty around Covid-19. The property market has seen price drops of between Sh1 and Sh2 million in the sub urban towns of Ngong, Rongai, Kikuyu and Kitengela, even after vaccination started in earnest. 14 years ago, I needed the “eyes” to see value hidden in the undervalued assets. That is what you need today.
Whatever amount of money is in your hands, there is an asset with a hidden opportunity for growth. You only need to wait for the market to attain full recovery, and that will be very soon.
But first, you need an understanding of how the investment market works. Secondly, you need to seek access to other people’s money (through loans) to take the opportunities. In the stock markets, share prices respond to company fortunes.
Other than companies involved directly with large numbers of people such as the hospitality sector which was significantly affected by Covid-19, the impact of the pandemic on other assets is indirect.
Once the national vaccination drive reaches a critical mass, there should be a significant reduction of new infections and consequently no need for strict Covid-19 containment measures.
You must develop an “eye” for seeing these drivers of value before they eventually happen. Also, you should have taken positions on certain assets by now and then work on increasing your holding.
Amid the economic uncertainty that we continue to experience, planning and frugality are useful skills. They make more resources available. Sharpen these skills so that you can have more cash in your hands. Some are lucky to be doing business related to Covid-19. They have cashflow from related services. All they need to do is release more resources to the investment. But, that won’t be possible unless they know how to invest. Seek advice and take the opportunity when the market is still depressed, and buyers are not growing fast.
Finally, we are approaching Christmas of an unpopular year. If you treat the festive season normally, the demands of 2022 will treat you abnormally. Schools reopen in the first week of January 2022.
Where possible, buy requirements like school uniforms, books, and shoes and deposit the school fees before Christmas. Spending on the spur, which typically happens over Christmas, will be detrimental for a long part of 2022. Avoid unnecessary consumer debt. They come with interests, which affect your future income. Borrowing now may mean borrowing more for survival in 2022.
Patrick Wameyo is a financial literacy coach at Financial Academy and Technologies, and an entrepreneurship coach at The Entrepreneurship Center EA. [email protected] .
