Growth & Jobs | Don’t watch the hype: Invest based on your personal goals

Rashidi Thomas, head of sales and client services at JN Fund Managers, is cautioning potential investors not to watch the hype surrounding investments that get a lot of publicity, but to make intelligent and informed decisions when pursuing investments.

Thomas was advising participants in a financial-management seminar, which was held at the JN Bank New Kingston branch in March.

He noted that developing an investment portfolio is a personal journey that should be pursued based on an individual’s unique goals and circumstances.

“Everyone has different investment goals and because they have different goals, one shoe does not fit all in the investment landscape,” he advised.

“Our objectives and risk tolerance are different. Therefore, what I would do in the investment landscape to make money isn’t necessarily what my mother would do because I may have a longer timeframe to invest than her, and I may be less risk adverse than her.”

Thomas said that there is a common fallacy among Jamaicans that suggests that because a friend or family member has invested in a particular instrument and was able to make money that it is a good move for everyone.

“When investing in the stock market, especially IPOs, do not follow the hype. Make sure that you understand what you are investing in. Make sure to read the analysis and research the company,” Thomas advised.

He further said that persons who invest in stocks must have a long-term outlook. “Try not to check on it every minute and worry when you see it go down. Stocks are a long-term investment, and you must be willing to see it through,” he said.

Thomas also pointed out that history has shown that over the long term, stocks tend to do much better than low-risk investments.

“The stock market is a good place to invest your money, but you must be wise and do your research. Don’t invest based on the instructions of your friends or family, and try to find a portfolio which matches your circumstances.”

He also advised that now that stocks are down, it is a good time to buy as investment wisdom teaches that persons should sell high and buy low.

Thomas added that persons should also look at diversifying their investments.

“Choosing something like a mutual fund is also a good move as what this does is to offer you diverse investment exposure,” he stated. “Therefore, if one investment should start to decline, you have the backing of a few more types of investments within your portfolio.”