Thanks for the great feedback. In the Wazua spirit, share the links with your friends and family so we can educate as many Kenyans as possible :)

I hope this information had been taught in the 8-4-4 system. Instead we were taught about mitochondria!

I also don't like that there are people charging for this kind of information. Therefore, I am sharing my personal finance knowledge and experience for FREE so at right those wrongs.

Have a great day!

I think that money market funds are very good option for diversification of portfolio. I am never putting all my money in one basket, so blue chip companies plus government bonds and money market funds are all good portfolio investments

Some quote the return having deducted withholding tax. Others don't. See my analysis in the below YouTube Videos

Part 1: https://youtu.be/HLGRNg8M4m0

Part 2: https://youtu.be/4WMSAjee7Vs

For the savviest among us, you don't have to focus on the locally available mutual funds. You can also buy globally traded funds and these have a couple of advantages:

1) transparency - you can choose a fund which tells you exactly where they are putting their investments e.g This Artificial Intelligence fund invests in tech startups in the US https://www.bloomberg.com/quote/ALGAATU:LX

2) They actually perform very well, often beating the local ones. The data is publicly available on the internet, you will find some with a history of 16% return and above. e.g the fund above made a 27% return in the last year and 5% YTD (January is not over even)

3) You invest in USD hence cushioning yourself against inflation, at the rate the Kenya government is mismanaging resources and also the pressure from IMF to devalue the Kes... you better be looking at investing in USD otherwise your little gains may at some point be averaged out by inflation

4) You can easily buy these funds locally, at least I know standard chartered bank's investment arm offers a way to get into this space, stress-free. There may be more options for you

PS: If you get in now, and the predicted US recession happens this year or next year, don't start crying like a little baby and blaming me... that will be your best opportunity to buy more and prepare to hold for the next 3 to 5 years... and that is how Billionaires are made.

Excellent analysis @slick, I agree with most of your points. It's probably not the most optimistic time to get in... but if you go with a thematic fund such as AI, healthcare, banking or climate change.. some of those gotta be resistant or at least less affected by the recession and of course you must be prepared to wait for the recovery (which could take more than 10 years in the worst cases, and that is when real wealth can be made i.e average down your ABP and wait). I am not convinced about the concerns you have about the US monetary policy I would like to believe they know what they are doing... at least much better than what we have in this country.

I personally would encourage folks to diversify into these global funds as long as they are not putting everything they got. I would put like 25% of my portfolio there and classify it as my highest risk position, just slightly above my local equities market.

Still got my stake in local blue-chip equities (high risk as well), infra bonds and money market funds (lowest risk)

Of course, real-estate is my medium risk (with medium to low returns) position and the least exciting in the current market

@slick the printing of money may have helped some stocks but the tech stocks have been fueled by massive value creation... 5 years ago there was no uber or instagram, today they are big global value generating ventures. That has to count for something ...everyone agrees AI will be a massive disrupter of industries and will generate massive economic value, the only way to tap into this for you and me is probably through a mutual fund focused on AI companies.

To summarize, my strategy is to buy now and continue buying under recession and exit at the next peak point. That has to work unless there is a world war 3 or something that annihilates most humans

@NewMoney Yes I agree that some tech companies have created value but their stock valuations and profitability cast serious doubt over their business model.Just to check a few examples

1)Tesla-This Electrical Vehicle company is loosing money on car sales,posted losses for many years and its only very recently its making meagre profits (from selling EV credits) relative to the size of the company and most times it suffers from negative free cash flow.They raise capital from junk debt that's getting increasingly fragile.Despite this the stock has practically gone parabolic since August 2019 from as low at 210 USD to a high of 594 USD recently.No financials can justify this move other than the cult of Elon Musk personality and belief that he is a genius that will revolutionize the Electronic Vehicle Market and also Space travel with his other company SpaceX.No doubt Tesla EV cars are superb but the financials of the company stink.Tesla is probably the most emotive stock in the US stock market with bulls riding on the Musk myth and bears looking at the stinking financials and this stock is the most shorted equity in the US equity market but the shorts have been crushed by the epic upward move.Once the next recession hits and the junk bond debt unravels,Tesla may not survive this.Also other car manufacturers with better financials are entering the EV market so Tesla may face stiff competition in future.

2)Amazon-No doubt Amazon has revolutionized the online retail market displacing even traditional brick and mortar companies that are closing stores in droves.But just like Tesla,good product not so good financials as its profits relative to revenue is appallingly low.The stock market cap had punched through 1 trillion and at one time traded at over 2000 USD/share with a grotesquely high P/E ratio of 83.None of its financials justify such high multiples of P/E and stock price and its definitely in a massive bubble.

3)Uber-Despite also having a good business model,Uber keeps making losses.In Q2 2019,it made a whooping 5.2 billion USD loss and the IPO was a mess.

4)Netflix-Excellent streaming service but horrible financials with most times suffering from negative free cash flow and the stock P/E ratio of over 84 is ridiculous.

Those are just a few and there are many others to drill down to (just look at WeWork debacle).Even the oil fracking industry that has made US the world's largest oil producer only exists because of Fed liquidity abundance and issuance of junk debt thats now showing signs of rot.

Well the market can still keep going higher despite serious underlying issues provided the Fed just keeps printing money and lubricate the markets.Most investors are piling into these stocks especially the tech stocks in a pyramid ponzi scheme like behaviour just like the dot-com mania and real estate frenzy that ended in tears.The bubble has existed for many years.Even Trump called the US stock market a "big fat ugly bubble" when the Dow was at 18,000 during the 2016 presidential campaigns and now the Dow surpassed 29,000 and is most likely going to hit 30,000.Dow 35,000 and beyond isnt hard to fathom for as long as the Fed keeps printing money.

All I am saying is that the market could go up but one needs to be cautious and not commit too much on the long side.The current late cycle dynamics of the markets are similar to the peak of the dot-com and housing bubbles and events could unravel very quickly so prudence is needed.Even Warren Buffet is keeping a cash hoard of over 120 billion waiting for a correction to scoop stocks at bargains.

Nominal stock price gains due to Fed printing money arent sustainable and real.Venezuela at some point had the world's best performing stock market in nominal terms because they were printing money into hyperinflation so those gains werent real

[/quote]

Wow and this reckless monetary policy only benefits the asset holders, majority of who are already rich. This is why we have the biggest wealth gap in recorded history.[/quote]

"Richest 10% of Americans Hold Over 85% of Stocks"

This is why you guys were so shocked in 2016. You think the Fed's trickle-down wealth effect is real, and everybody lives in NYC and has millions in stocks, and pays extra for ice in their bourbon.[/quote]

Oh yeah.Such a sick system.US treasury issues bonds to fund government programs,the primary dealer wall street banks like JP Morgan,Goldman Sachs,Citigroup buy these bonds from the treasury then these wall street banks sell these bonds to the Fed in a mechanism called Quantitative Easing (QE).Fed creates new money from nothing and buys these bonds crediting the accounts of the wall street banks held at the Fed.Using that QE cash,the banks then go out and buy their own stocks in stock buyback schemes or lend to their buddies in large corporates like IBM,McDonalds etc plus hedge funds,mutual funds,private equity firms at ridiculously low rates and these firms also go buy their own stocks in stock buyback schemes plus buy other hot stocks.In fact over 60% of US stock gains are from companies buying back their own stock as opposed to using this money to hire more employees,build more plants.All these from money created from nothing by the Fed.

Fed maintains ultra low rates by keeping the Fed funds rate at nearly 0% for nearly 7 years from 2009 to 2015 and to achieve this they expand the money supply vastly.Currently,since lending rates are so low the banks also lend to undeserving corporates at ridiculously low rates.Its similar to how the banks were lending to undeserving mortgage applicants during the housing bubble of the early 2000s.These sub-prime corporate loans are called leveraged loans similar to sub-prime mortgages of the housing bubble.The leveraged loans are bundled up and sold to other investors as derivative Collateralized Loan Obligation (CLO) products just like Collateralized Debt Obligation (CDO) were sold for sub-prime mortgages.The derivative bets of CLOs is even more grotesque then the CDO mania of the housing bubble which unraveled so spectacularly in the 2008 crisis.No worries in 2008 the wall street firms that participated in the CDO sub-prime madness got bailed out when the Fed bought up all that junk yet the bloke who took the sub-prime mortgage got foreclosed and house auctioned at massive discounts to the same hedge funds and private equity funds that caused the madness in the first place.

To keep the game going,lending rates have to remain very low and this means Fed and other advanced nations central banks have to keep printing money.Well one asks,if the West keeps printing money why arent they having consumer price inflation.Its because this printed money largely goes to buy stocks,bonds and real estate by the mechanism I explained above.Its asset price inflation and US stocks have appreciated more than 5 times since their bottom in 2009.Inevitably all this printed money will trickle down to consumer prices inflation

The Fed tried to raise rates from 2015 to 2018 to from 0.25% to 2.5% to curb the money growth but the stock markets used to cheap money suffered massive declines in Q4 of 2018 with US stocks declining 20% forcing the Fed to cut rates again 3 times in 2019 and inject nearly 1 trillion a week in new money with repurchase agreements and buying short term treasury bills.The 6 big Wall Street banks together with the Fed have a group called Plunge Protection team that buys stocks every-time market declines that is why US stocks have kept going up since 2009.

Its shocking that the US central bank cant raise rates even past 2.5% because of all the trillions the cumulative debt financed at ultra low rates.In 2006,they raised rates to 5.25% and this was enough to collapse the housing bubble.In Kenya we can survive on high central bank rates of currently 8.25% but the US and all advanced nations cannot.If the Fed raised rates to 8.25% like Kenya,their stock,bond,real estate and general economy will implode into a deflationary Armageddon.Europe and Japan is even worse as their central bank rate is zero and commercial bank deposit rate to their central bank is negative to force commercial banks to lend out their reserves as opposed to being charged to park the reserves at the central bank .There is no chance in hell that Europe and Japan can return their central bank rates to positive in the current monetary dispensation.European economy is so anaemic that European Central Bank is trying to force banks to lend to clients money to boost spending.It gets ludicrous that SOME DANISH BANKS ARE OFFERING MORTGAGES AT NEGATIVE INTEREST RATES.WHAT!!!Check out below Danske bank in Denmark offering mortgages at MINUS 0.5% to ensure mass buying of houses and boost the economy.Also the lunacy of negative yielding bonds is of gross concern



https://www.cnbc.com/201...ive-interest-rates.html

Too late

In the days before I "discovered" "Deep State" and "State Capture", I would have agreed with you wholeheartedly.

Today, however, my conspiracy theories mind is running overtime, fast and furious.

Think about it, who in the Board would benefit from such information?

Just a thought. Just a thought.