JMMB Group Shows Investors How to Create Wealth With Stock Market Investing
The investment maxim ‘buy low, sell high’ holds, even in the COVID-19 pandemic. Under the JMMB Elevate 4.0 theme, ‘Level Up Your Wealth,’ Randy Rowe, team lead, EveryMickle.com, David Rose, business journalist and JMMB’s Greig Lindo provided an impactful, succinct and pertinent beginner’s guide to investing in the local stock exchange, during the panel discussion on “Stock Market Investing: Buy. Sell. Hold.”
“Investing in stocks is (one of) the best vehicles to create wealth long-term. You will not create that kind of wealth in a savings account or in pardnas,”says Randy Rowe. Your stocks will yield a high return if the company is successful, and if it is not you can lose the investment you have made. Stocks trade up and down daily, so investors should ideally have a long-term view when making a decision to invest in any stock, although short-term trading can also reap rewards, outlined Lindo.
In spite of the recent macroeconomic conditions, there is tremendous opportunity for both new and experienced investors to grow their wealth - was the sentiment shared by the panelists. As such, they unanimously encouraged investors without the know-how, to create a sound investment strategy that is built on financial education and to hire a licensed financial advisor to guide them on their financial journey. Here are some of the key takeaways that can guide investors on their journey to level up their wealth creation.
Buying stocks is simply purchasing a share/stake of a company; in the case of common/ordinary shares, this gives investors voting rights at the company’s annual general meeting (AGM). Only majority stockholders will have a say in the day-to-day operations, so no need to worry about showing up at the office.
JMMB’s Greig Lindo, in underscoring the need for investors- new and experienced alike- to chart their own journey and build a portfolio that best meets their needs, shared, “Your investment style must take into account your unique risk profile, age and expectations.”
The seasoned trader, who is also assistant general manager, trading & treasury at JMMB, commented that being a successful investor “is about staying informed, keeping your ears to the ground, reading, reading, reading to understand and know what is happening.” The Intelligent Investor by Benjamin Graham was highly recommended as the go-to introduction to equity investing. Lindo also encouraged investors to start with the basics, by keeping abreast with the news to stay informed and read as widely as possible, including credible social media sites to access information. “(Having) a basic understanding of the fundamentals and how to read financial statements is key in making prudent decisions and understanding a company’s performance, ahead of investing.” David and Greig pointed to the Jamaica Stock Exchange as a great source for free information and courses that could cement investing knowledge.
“Your investment strategy must not only be a reflection of the past, but also a reflection of the future,” shared David Rose. Therefore, a successful investor must have a keen perception of future trends, while balancing past performances. In further giving insight to the question of how to pick the best stocks for your portfolio, Greig shared, “Look at the macroeconomic outlook first. What is happening in the economy (that provides opportunity for you as an investor)? Then, look at the sectors that have potential growth opportunity and select companies in that sector.” He also shared that a basic principle of understanding what you are investing in can be applied, by investing in companies whose services/ goods you use, as a starting point.
Entering the equity market by oneself, without expert guidance, may prove difficult, “Anybody can do it (invest in stocks)…it does take some amount of discipline, commitment and you have to decide to educate yourself (so that you can make informed decisions),” reassured Greig. In the continuously evolving meta world, information is a scroll or click or even an online course away.
“Stocks are not something that you lock up in a vault. It requires consistent assessment, at least quarterly, (to determine if these stocks still fit your portfolio and are performing), outlined Lindo. Investment research analyst, David Rose, reminded investors to keep their investment goals and their target return in mind, as a deciding factor in when to sell a stock, noting, “Don’t get too greedy”; therefore, once investors hit their target return they can sell the stock and use the returns to buy other stocks that they expect to meet their investment objectives.
For the many future investors that tuned in, the message was clear, investing can be risky and you can lose money as easily as you can earn it. Each individual must assess their own risk appetite, invest only what they can afford to lose, so as to avoid financial and emotional repercussions. Whether small or large, keep your portfolio diverse and stay informed about what is happening in the market, that is, new trends and industries and certainly the companies you have an investment in.
The most fundamental step to levelling up your wealth is opening your account at a licensed and reputable broker and developing your investment strategy. Opening requirements are generally the standard documentation needed for other financial transactions (government-issued identification, proof of income, TRN, etc.) and providing the minimum opening amount.
In the close out of the discussion, Lindo advised that although there are many rewards to be gained by investing directly in the stock market, “If you decide that this (investing in stocks) is not for me, you can also be a part of a managed fund, like a unit trust (that is invested in stocks),” which is a pooled fund where the financial experts will use their expertise to manage the portfolio of assets, to maximise your return.
JMMB Group partnered with Express Fitness, Domino’s Pizza, Roast By Bresheh, Live Simple, WATA and CranWATA, for this year’s staging of Elevate 4.0, a virtual event via the Zoom platform.