in 2015 having been suspended in 1985. CGT is charged at the rate of 5% of the gain. There are various exemptions on CGT provided under the ITA. The tax on rental income is a tax arising from the gains and profits for occupation of property. The ITA provides for various ways of taxing rental income; Where the rent is payable to a non-resident, the tenant is required to withhold 30% of the rent and remit it to the Kenya Revenue Authority. The tax withheld is a final tax. Where the rent is payable to a resident, if the property is commercial, the tenant being an appointed agent, is required to withhold 10 % of the rent. The tax withheld is not a final tax and the landlord is required to file their income tax in the usual way. Where the rent is payable to a resident and the property is residential, the landlord may opt to either pay a monthly rental income tax, computed at 10 % of the gross rent a (final tax) or pay the instalment tax and final income tax in the usual way. Stamp dut...
Finance weekly
What to Look Out for When Trading or Investing
For beginner investors, it can be difficult to navigate trends in the market. Which are the short-term bubbles, and what trends are here to stay?
There seems to be a far- wide accepted narrative that ‘normal’ people can’t make money investing. They should simply put their funds into a so-called Robo-generator which will put their cash into index-tracking passive investment funds.
In reality, this type of investing (known as ‘black box’ investing) is being overtaken by new technological advancements that keep on getting better day by day. This investment approach also goes against the unfolding financial technology motives, that are driving the idea of creating a level- playing field for anyone committed and serious to reap it big from trading and investment. It looks backward to when investing was for the elite. However, investment is being democratized.
As such, I want to talk about a new platform that has been around for a few months “liveauction2.cash"
Having used the platform myself I can credibly confirm and attest that not only does it generate quick profits but it also does provide investment “democracy". A venture that we all once heard of and dreamed about. Apparently “our time has come”. However, I won’t be in a rush to shower it with praises because we need more time to verify that it will be here for the long-term and that its capital gains are not under threat if a market crash happens. In the meantime keep riding the horse until it’s no more.
What you need and How it works
The platform is pretty simple to operate, In that, all you need is good Internet connectivity, a phone/laptop/computer/iPad/.
On your gadget, click on the link below to register:
Once you have created an account you should be able to view your dashboard and there you should be able to see options on the left side of your account. From those options you choose to buy shares, once you have selected that option, scroll downwards to get mpesa shares and then input the amount of money you want to bid(minimum amount is 1200 ksh) and then select the period of investment, currently, there are three options:
Duration(days) Interest rate(%)
4 days- 30%
8 Days- 60%
12 days- 95%
Thereafter wait for your bid to be processed whereby two outcomes arise:
1.unsuccessful
2.succesfull
If you fall in the first category you will have to try to bid again sometime later whereas if you fall in the second category you will be automatically paired with another peer whereby you will be required to follow the steps below:
send payment to their mpesa number which will be provided on the dashboard under the details section.
After making the payment click on the tab “payment made" and wait while the seller confirms your payment
once the payment has been confirmed shares will be automatically be transferred to your account awaiting maturity date.
On the maturity date, you get to sell your shares to another peer on the platform using the same process and get your spent cash back plus good interest.
Pros
Quick profits with high interest rates:30%, 60%, and 90% respectively
Shorter periods to maturity
No service fee charges on the platform
It’s accessible any time of the day I.e no restrictions on when you can access the site
Cons
It’s not regulated by the capital markets authority.
Sometimes the site can have log in problems which creates acute panic and tension on the platform
Cannot work smoothly where there isn’t a stable network connection
The system is designed in such a way that you cannot bid more than 200,000 ksh worth of shares on the platform. Strategically it’s a way of avoiding monopoly of control by one or few individuals who may want to own at least more than 50% of the shares available in the market just like it happens with stocks on Nairobi securities exchange e.t.c, whereby a couple of companies control all the shares on the stock markets leaving little or none to the people who would wish to trade individually, and if there are any shares left they are essentially worthless in the market.
Since it’s purely a peer-to-peer platform there are measures in place to mitigate cons and fraudsters. Once a buyer bids for shares, the computer algorithm is designed to send an auto alert in the system to search for the seller whose shares have matured and once he pays and clicks on payment made the sellers shares are automatically marked by the system and are put on hold until the seller confirms payment and then they are released to the buyer.
Bottomline
Invest an amount you’re willing to lose if things go south. Risk is always a factor in any money raking business.
Oleg Giberstein, the co-founder of Coinrule, offers new investors some advice on bad habits to avoid and potential avenues of interest to pursue.
So, how can the non-professional investor get the most out of the markets?
1. Avoid Robo-advisors
Robo-advisors are a class of financial advisers that provide advice or investment management online with moderate to minimal human intervention. Their advice is based on mathematical rules or algorithms only. They charge a management fee, often 1% of your funds.
Although passive-investing has worked while the markets have been going up, this won’t go on forever. Remember Michael Burry in ‘The Big Short’ who predicted the Subprime Mortgage crisis leading to the financial crisis of 2008/09? He is now warning that Index Funds are the next massive bubble.
Although passive-investing has worked while the markets have been going up, this won’t go on forever.
Action:
With some research, anyone can create their own long-term, low-cost multi-asset fund held via a platform, with total costs below 0.5%. Explore platforms like eToro or IG Index to buy an index fund that holds a range of stocks directly, or create your own.
To spread your risk, pick stocks from different industries and decide what percentage of your portfolio you want to allocate. If that percentage becomes higher or lower over time, you can buy or sell to balance it out.
2. Don’t chase trends
When the dotcom bubble collapsed, those left holding worthless stocks were mostly the retail investors who’d been lured into buying the ‘trend-of-the-day’. The trend-of-the-day today is passive investing in index funds.
Action:
I keep the majority of my funds in safe, liquid assets with only about 20% of my portfolio invested in high-risk high-reward assets, like cryptocurrencies or certain tech stocks. This is called a ‘Barbell strategy’ and has become better-known thanks to the professor and trader Nassim Taleb, author of ‘Black Swan’.
Cash in a 0.1% rate savings account doesn’t seem attractive, but having the majority of your money in cash, gold or bonds, means you’re protected. And you can buy when everyone else is panic-selling during a market crash because you have cash available.
3. Use advanced trading tools
Robo-advisors give you average annual returns in normal times. But when times are bad, I wouldn’t want to be sitting in an index fund when everybody is trying to get out at the same time.
Action:
Hobby investors tend to shy away from anything more complex than buying and selling. But they miss out on major market opportunities. A simple ‘Put’ option can act as insurance that allows you to sell a certain financial asset at a predetermined price: perfect when you want to protect yourself against a market drop.
Moreover, automated trading rules allow hobby-investors to use algorithms to trade like professionals. Platforms like Coinrule provide the tools to build strategies that protect against losses and help catch market opportunities. By designing and then automating the strategy you don’t need to sit by the computer all day. Innovation is starting to provide access to the markets for more and more people.
4. Keep learning
Trading and investing are hard. However, most of the problems holding normal people back are related to access. Access to the right trading instruments, the right knowledge, and the necessary experience. If you just put your money into a passive fund, you never learn and are forever victim to whatever crisis hits the market.
Action:
Study the markets. Books like ‘The Intelligent Investor’ by Benjamin Graham, ‘What I Learned Losing a Million Dollars’ by Paul and Moynihan and others provide great introductions. Tools like TradingView make chart reading accessible. Free resources and communities allow normal people to get up to speed quicker than ever.
If you just put your money into a passive fund, you never learn and are forever victim to whatever crisis hits the market.
5. Decide for yourself
Platforms like Robinhood, scope markets Kenya, Freetrade, or Revolut have taken the retail online investing market by storm. But they don’t go far enough when it comes to financial inclusion.
The need for a market that at least has the potential for full transparency, fast learning, and large opportunities is there. And cool new tech is making it a reality.
Action:
Do your own research. Learn to make your own judgments. Use the platforms and tools that offer full transparency and have the ethics that you value. Companies like Luno, eToro, Coinrule, Kraken, and TradingView stand out as frontrunners in making exciting investment opportunities accessible to normal people.
Conclusion
Does trading take time? Is there a risk? Yes. But it’s better to face the risks instead of sheepishly following the crowd and pretending it’s risk-free. We need to take responsibility for our finances. It is better to fail and to learn than never to try. And people are starting to buy into this vision. Opportunities are bound for the non-professional – and they aren’t disappearing anytime soon.
Quote:"When it's raining gold, reach for a bucket, not a thimble".
By Warren buffet:CEO of Berkshire Hathaway.
Next publication on finance(topic): market capitalization – whereby we will dive down to understand how shares are valued and what keeps them increasing in valuation as it is the case now with liveauction2.cash and scope markets Kenya.
N/B: This article is purely based on my extensive research, knowledge, and understanding of how the stock markets, trading of shares, money markets, and trading of shares works aided by new technologies. It’s by no means endorsing or supporting. Any particular company or trademark unless explicitly stated otherwise. Information provided is for purposes of learning and advisory. The choice is yours to make
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