As your grow older, your investment objectives change, your time horizon shortens and your tolerance for risk reduces.
In age-based asset allocation, you start with a high allocation to risk assets such as stocks and gradually reduce your allocation to risk assets in favour...
...of safer assets such as bonds as you grow older.
For example, at 30 you would have 70% of your portfolio in stocks & other risk assets and 30% in safer assets such as bonds.
At 40, your exposure to risk assets such as stocks would reduce to 60% while exposure to safer assets such as bonds increases to 40%.
Allocations may vary depending on life expectancy.
Safaricom hit a new 52-week low of Kshs. 32 today. The previous 52-week low was Kshs. 33.20.
This means all the price gains of the last one year have been wiped out!
KCB hit its current 52-week low of Kshs. 34 today. Again, all price gains for the last one year wiped out.
Equity Group's 52 week low is Kshs. 39.5. The only reason its holding the 47 - 49 level is because it's trading cum dividend.
Why are share prices falling?
1. Inflation
2. Weakening Shilling (Foreign Exchange Fluctuations) due to interest rate hikes in the US and other developed markets which are also dealing with high inflation rates.
The Federal Reserve Bank raised the Fed Funds Rate by 50 basis points yesterday.
"Take two businessmen, Kamau running an electroninc shop in nyamakima & patel an autospare shop along kirinyaga road. Both men take their sons to JKUAT for a degree course. Patel's son commutes daily from parklands while kamau's son lives in a small rented bedsitter in juja.
Before joining college, Patel son used to spend the days at the autospare shop a routine he continues every sat when not going to college. Over the vacations, he even takes over the management. Kamau on the other side believes that nyamakima is not the place for his university...
...going son so he should get a degree and get a better job.
The two young men graduates and goes seperate ways. Patel junior now takes over the running of the autospare shop. Kamau jr hits the road, looking for a job.
In 2011, The Least Cost Power Development Plan (LCPDP) 2011-2031 was updated, the electricity supply interconnected system in Kenya had a total installed capacity of 1,533 MW made up of 761.0 MW of hydro...
...,525 MW of thermal, 198 MW of geothermal, 5.45 MW of wind, 26MW from cogeneration and
17MW of isolated grid.
The registered national sustained peak demand was 1,178 MW.
In the updated projections, demand was forecast to be between 2,301 MW on the lower side and 2,951...
...on the higher side in 2018. The reference point was set at 2,566 MW.
To cater for the energy requirements of the Vision 2030 flagship projects, amendments were made to the projected demand figures.
Most of us grew up in a 'land is the ultimate investment' culture. In some communities, you're not considered mature if you don't own a place of your own.
This 'reasoning' I believe, partly explains why the real estate market is so inefficient.
In the developed world, specifically in the US, the value of properties and indeed many assets, is often quoted as a multiple of annual earnings, rental yields or capitalisation rate (cap rate) if you like...5X, 10X etc.
Here in Kenya property prices are speculative in nature.
People buy property not because the fundamentals make sense but because of the cliché 'you can never go wrong with real estate'. In the process, people are prepared to pay prices that don't make any sense. This explains the crazy prices in the real estate market.