Shares are "long term " but how long is long term?
Shares Are Long Term — But How Long Is Long Term?
By Postine Ngeli • Money Market Hub Kenya
Investing in shares often comes with the advice: “Think long term.” But what does that really mean — especially in the context of the Nairobi Securities Exchange (NSE)? Is 1 year long term? 3 years? 5 years?
In this post, we’ll unpack the idea of long-term investing, show you real market performance, and give practical guidance you can use today.
1. What “Long Term” Actually Means in Investing
Long-term investing means holding stocks long enough to benefit from business growth, compounding, and dividends. Experts generally consider 5–10 years as long-term.
| Investment Horizon | Typical Period | Primary Focus |
|---|---|---|
| Short term | 0–1 year | Day-to-day price action, speculation |
| Medium term | 1–3 years | Growth with some volatility |
| Long term | 5–10+ years | Sustainable growth, dividends & compounding |
2. Why Holding Shares Takes Time
- Compounding earnings: shareholder value grows over years.
- Dividends accumulate: increases total returns.
- Market sentiment fluctuates: gains often follow temporary drops.
3. Kenyan Equity Market Performance (2025 Snapshot)
- The NSE’s market valuation approached KSh 3 trillion in late 2025. Source
- Safaricom and other blue-chip stocks contributed significantly to investor wealth. Source
- KenGen’s share price has more than doubled year-to-date. Source
Year-to-Date (YTD) refers to the period from January 1 of the current year up to today’s date.
4. Actual Gains (2025 Year-to-Date)
| Company | Year-to-Date Price Change (Approx) | Source |
|---|---|---|
| Safaricom | ~+69.5% | SIB Kenya |
| Equity Group | ~+20.1% | SIB Kenya |
| KenGen | ~+136.8% | SIB Kenya |
5. Dividends: The Silent Contributor
- KenGen reported strong net profit and dividends in 2025. Source
- Reinvesting dividends strengthens compounding over years.
6. When Long Term Starts Paying
| Years Held | Investor Reality |
|---|---|
| 1–2 years | Market volatility dominates |
| 3–5 years | Trends start to stabilize |
| 5–10 years | Compounding & dividends show strength |
| 10+ years | Significant wealth growth |
7. Shares vs Other Options
- Money Market Funds – low risk, steady returns
- SACCOs – stable dividends, medium-term
- Shares – higher returns over the long term, higher volatility
Learn more in our Investment Options Guide.
8. Practical Tips From Successful Investors
- Set long-term goals
- Avoid emotional trading
- Reinvest dividends
- Diversify across sectors
- Use market dips as buying opportunities
Check our Stock Market Strategy Guide.
FAQs
Q: Can shares lose money long-term?
A: Yes, diversification helps manage risk.
Q: Lump sum or gradual investment?
A: Both work; dollar-cost averaging reduces timing risk.
Q: Are dividends important?
A: Yes, they boost total returns.
Take Action Today!
Subscribe to Money Market Hub Kenya for weekly insights.
Read Investing Basics and NSE Strategies.
Track your favourite shares with our recommended tools.
Share This Post
Comments
Post a Comment