Don’t chase fast money. That was the warning issued to budding investors during a webinar hosted by the Trinidad and Tobago Stock Exchange last week entitled “Navigating the Local Stock Market: A Beginner’s Guide to Investing with the TTSE & JMMB.”
“Now we live in the internet age, and we go on these online platforms all the time and we see a lot of a lot of websites or people promising exorbitant returns. Easy money, they call it. That is not investing. What I will tell you is if it seems too good to be true, then it probably is not true,” said David Paul, senior investor analyst and portfolio manager of JMMB Investments during his presentation in the webinar.
“Be wary of that. There isn’t any magic bullet if the way to creating wealth is through consistency and discipline.”
Paul also sought to debunk theories that investing in the stock market was only for the very wealthy or could only be facilitated through a stock brokerage company.
“The first option as a new investor is you could get professional help. You could get professional advice to do the investing for you. Now, you could do this in two ways. You can either have your advisor, put together a personalised portfolio for yourself or you could just invest in a mutual fund. This option comes with fees, just a heads up, various management fees,” he said.
“The second option that you have, which is what we are really here to speak to you about today, is that you can do it yourself. With this option, though, you would have to put aside the time and the effort to do your homework and find out the stocks that you probably should invest in, and which stocks you should hold for the long term. Are there any short-term trading opportunities?”
It was revealed during the webinar that in fact, most of the investors on the T&T Stock Exchange (TTSE) were indeed, individual investors.
“New statistics show that contrary to popular opinion most activity on the Exchange is done by individuals like you and me. As of April 2023, individual accounts make up 95 per cent of the total TTSE accounts. And further to that we noted that year to date TTSE recorded over 16,000 trades and 79 per cent of those trades were executed by individual accounts,” said Kiyohmi Joseph, marketing operations officer of the TTSE during the webinar.
Paul also said while there is some hesitancy due to the perception that the markets are volatile, he noted that the local market was largely stable and that most could make managed investments in companies that they regularly patronise.
He however said budgeting and maintaining investments were crucial to securing returns in the long term.
“Markets don’t move in a straight line. They go through booms and busts, ups and downs. Once you invest in solid companies that can withstand down cycles, what history has taught us is that the market will reward patience because over the long term, most markets trend upwards, right although we have booms and busts in between,” said Paul.
He however advised potential investors to ensure they had an emergency fund so that they would not liquidate their investments before they mature.