Mon | Sep 25, 2017

Ready to invest

Published:Sunday | December 20, 2015 | 12:00 AM
The Jamaica Stock Exchange at Harbour Street, Kingston.

Q: I'm interested in investing, but I will be starting with a really small amount of money. I plan to start at about the end of January 2016. Is there any information or institution that you can recommend to me?

- Ken

I like your positive approach. You are going to start investing with the little you have, you have set a time to begin and you are asking for help.

To invest in securities - tradeable investment instruments such as stocks, bonds, unit trusts and mutual funds - you should use the services of securities dealers licensed by the Financial Services Commission to give advice and trade in such securities.

Stockbroking companies are the only ones authorised to trade on the Jamaica Stock Exchange (JSE), but they also deal in a wide range of other securities. There is another kind of company which trades in securities, but they go by a variety of names, including investment companies, portfolio-management companies and wealth-management companies. They are able to handle the buying and selling of listed stock for you through the stockbroking companies. You will be able to trade unit trust instruments by relating to the unit trusts or their agents.

The above investment dealers are equipped to give you advice and guidance on investment matters. The Yellow Pages are a useful resource for identifying them, learning about the services they offer, and how to contact them.

Additionally, the websites of the companies also provide valuable information. They generally have current information on how the various markets are performing and often venture to say how they expect them to perform in light of the research they have done.

Their advisory services and portfolio planning and management services are closely linked. If they are to be effective in providing the latter, they should be good at the former. They should be able to advise when is the best time to take various actions, such as buying and selling the various types of securities, and to suggest what is right for you. Do not expect them to be right every time, though.

To suggest what is right for you, they will need to get relevant information on your personal and financial situation, including your goals and objectives. These tend to change during the course of your life. The recommendations made to you may vary from those made to another person who you may believe is similar to you. Expect them to pay close attention to your ability and willingness to take risk.

It is in your best interest to speak to more than one provider of investment services before deciding who you will engage. You are free to move your business to another investment dealer if you are not satisfied with the service you are getting.

If you are interested in buying stocks, I recommend the website of the JSE, www.jamstockex.com. Regular visits will help you understand how the stock market operates. It will take time and effort to understand, but it will be worth it. The JSE can also tell you who the stockbrokers are.

The websites of the unit trusts - Barita Unit Trust, Scotia Investments (Scotia Premium Funds), NCB Capital Markets (NCB Cap Funds), JMMB Fund Managers, and Sagicor Investments (Sigma Funds) - have a wealth of information on the types of funds, the instruments in which they invest, their unit prices, and their recent performance.

The time you spend doing research now will help you understand what investing is about and how to make the decisions that are best for you. In much the same way that you need to be patient to learn how to invest, you also need patience to get the results you desire. Take time to know what you want and to act accordingly. It will save you time and money later.

If you meet a dealer who is not able to accommodate the small sum you intend to begin with, try somebody else. You will get big one day. You can be sure that most unit trusts will accommodate you, so stick to your January target. I wish you well.

n Oran A. Hall, principal author of 'The Handbook of Personal Financial Planning', offers personal financial planning advice and counsel. Email finviser.jm@gmail.com.