Growth & Jobs | Young investor not deterred by COVID-19 pandemic
The COVID-19 pandemic, which officially emerged in Jamaica in early March last year, has not diminished David Rose’s appetite for trading on the Jamaica Stock Exchange.
In fact, the pandemic has presented a rare opportunity for the young investor to expand his investment prospects, which allows him to take advantage of the global stock market.
“Apart from my investments locally, since the pandemic started, I’ve expanded my portfolio, and I’m now investing overseas in Canada and the United States,” Rose said. “Between August and September last year, I started to trade in those markets, before it was only Jamaica.”
Rose said the experience has been a good lesson in trading, noting that his Canadian portfolio is relatively stable, as he is employing a three-way tier hedge strategy.
He also noted that this approach helped him to hedge his funds while reducing potential risks, and at the same time, provided invaluable lessons about the global market.
“In owning Canadian stocks, the US dollar has devalued to the Canadian dollar while the US dollar appreciates against the Jamaican dollar; therefore, I’m always in the positive in any scenario,” he explained.
Rose further pointed out “when I first started back in September, the US$1 could have given you CDN$1.33. Now it’s about CDN$1.26. Therefore, my Canadian dollar values more in US dollars, even if my investments have not necessarily increased by 10 or so percentage points. And then, in terms of the Jamaican dollar, I am benefiting even further because the US dollar is continuously appreciating against the Jamaican dollar.”
The University of the West Indies, Mona, student, who turns 23 years old next month, said his foray into stocks and trading started in 2016 – a venture he financed from earnings he made working during the summer. In fact, the science major said he opened an investment account before he opened a savings account, an act that many financial advisers would probably caution against.
Since then, his love and passion for the stock market have only grown deeper.
Not only has he been able to use portions of his earnings from the stock market to assist in funding his university education, but his knack for trading and analytical skills has not gone unnoticed by the experts.
He was the three-time quarterly winner in the Jamaica Stock Exchange/All Media Services’ Young Investors Stock Market Competition for 2018 and has been invited to share his knowledge and experience at several investment fora, including the recently held ‘Ask Me Anything About Money’, a youth forum organised by the JN Foundation.
Rose, who fuels his passion for the stock market by reading widely and doing a lot of research, said that his initial ambition was to become a medical doctor. And while he has not given up on that dream, he pointed out that he has come to realise that he can be of service to his fellowman in more ways than one.
“When you think about a doctor, his role is to make persons better health-wise; and I’ve grown to realise that I don’t have to necessarily be a doctor to impact others and help them to improve their lives,” he stated.
“I’ve become somewhat of a guide or educator, in a sense, to many persons who are interested in the stock market. I’ve been able to clarify information for them and to direct them to resources. And in that way, I’m helping them to improve their financial health.”
Garfield Goulbourne, relationship manager at JN Bank, stated that Rose is a bold example of the potential for significant earnings, which is available from investing in the stock market. However, he cautioned that his style of investing may not be for everyone.
Goulbourne advised that before anyone embarks on a path of investing, they should ensure that they have a solid savings base in place, including having at least six months of basic living expenses in their emergency fund.
“Because when you go the route of equities or any other investment, while your potential for earnings may be great, you don’t get a set interest rate, but instead, you receive returns, which may be positive or negative. If your investments don’t work out the way you want them to, you will certainly need a financial cushion to fall back on,” he advised.
Goulbourne further noted that persons who receive a sudden windfall of money should be wise in their approach to investing.
“If you inherit a lump-sum payment, before you explore any investment, it may be best to clear certain credit obligations or regularise loan payments if you are behind on them,” Goulbourne said.
He added that investors should ensure that their financial portfolios are strengthened not just by the typical savings and investment instruments, but also through life insurance and living benefit plans, property insurance, as well as retirement plans.
Goulbourne, who is also an ambassador for the JN BeWi$e Financial Empowerment Programme, further added that investing takes an individual approach and is not a one-size-fits-all endeavour.
“What works for Mr Rose may not work for someone else because their propensity for risk may be different. In addition, their age, earning potential, and goals may all vary,” he related.
Goulbourne further advised that potential investors should first talk with a licensed financial adviser prior to embarking on any investment to ensure that they are on the right path.