Growth & Jobs | Good investment outlook for 2020 – Palmer

The Jamaica Stock Exchange (JSE) is expected to remain buoyant in 2020, with additional listings and trading volumes driven by the increasing interest by Jamaicans to invest in equities, says Dania Palmer, research manager for JN Fund Managers.

Palmer cautions, however, that no stock exchange can exhibit positive double-digit returns indefinitely and, therefore, investors should be prepared for the time when stocks listed on the JSE will fluctuate and investors may suffer capital losses from time to time.

“The momentum of the Jamaican equity market in 2019 could carry through into 2020,” the research manager stated. “Low interest rates should continue and makes equity valuations more attractive; however, as most listed equities on the JSE may already reflect their intrinsic values, investors may not receive the same returns in 2020 as in the previous two years.

“The equity market could remain buoyant in 2020, based on the increased levels of liquidity expected from maturing Government of Jamaica (GOJ) securities, in addition to the low interest environment,” Palmer explained. “Given the favourable interest rate environment, we anticipate that more companies will utilise the capital market and list more equity securities on the Jamaica Stock Exchange.”

He cautioned that, “Given the macroeconomic outlook for Jamaica, investors should focus on those companies with strong fundamentals, sound management, and defendable competitive advantage in their respective fields.”

Palmer emphasised that, “At JN Fund Managers, we believe that most individual investors are better off investing in equities through a mutual fund or other collective investment scheme. Such funds give most investors who don’t have the time to conduct thorough investment research on listed companies, the ability to earn stock market returns by utilising the expertise of professional managers.”

Mutual funds and unit trusts use the pooled savings of their investors to purchase stocks, bonds, real estate, money market instruments and other assets, allowing them to spread their investment risks and rewards across a wider class of securities.