Individual Investor Life Cycle
Individuals will go through various life stage, in which their investment needs and objectives are different.
- There are 3-phases
- Age: 20-30s
- Age: 40-50s
- Age: 60-70s
- Accumulation Phase (20-30s)
- This a critical phase for accumulating assets to satisfy immediate or future financial needs
- Getting started early pays off due to the power of compounding
- Power of compounding
- Monthly investment of Kshs. 5,000 per month at 8% interest
- Typically, investors have a long investment horizon
- Optimal investment strategy is to achieve above-average returns over time.