Michelle Sinclair-Doyley of JMMB gives some of her favourite philosophical quotes that have guided her and hopes that they will guide you towards your journey of a wealthier life:
1. “How many millionaires do you know have become wealthy by investing in savings accounts? I rest my case.” (Robert G. Allen):
Savings accounts are designed for safety and liquidity. However, growing your portfolio will require taking greater risk which can include investing in real estate and the stock market; which in the long run should outperform inflation and depreciation of the J$.
2. “The individual investor should act consistently as an investor and not as a speculator.” (Ben Graham):
Well-timed, quick supernormal profits seldom occur. Instead your financial decisions should be guided by facts and solid analysis. Additionally, determine the criteria for the assets to be included in your portfolio, for example, assets selected should meet your investment objective and your timeline, whether 1 year, 3 years or more than 10 years (short term – long-term). JMMB’s website shares market research, stock prices and portfolio strategies to keep you informed and provide you with factual analysis.
3. “Know what you own, and know why you own it.” (Peter Lynch):
It is important to recognize that each asset class (such as real estate, bonds or stocks) and each asset in that class serve a different role. For example, when purchasing stocks it is good to diversify across industries. Ideally, it would be best to include stocks that move in opposite directions. For example, if you have agricultural stocks, a construction stock may be purchased to add balance to the portfolio, in the event of a hurricane, although the agricultural related stock prices may fall, in the rebuilding process, construction related stock prices should increase. Investors should also include different assets in diversifying their portfolio; by including cash to offer liquidity, bonds for consistent cash flow and stocks to outperform depreciation. Unit trusts are also an excellent way to diversify your investment, with the opportunity to benefit from expert management, so that you can reap the best returns on your investment.
4. “Always start at the end before you begin. Professional investors always have an exit strategy before they invest. Knowing your exit strategy is an important investment fundamental.” (Robert Kiyosaki):
With this mindset of the goal at the beginning of the journey, investors should try to purchase assets well below its top price, if not it will be difficult to obtain large profits on the sale of these assets. Additionally, in order to be less emotionally led, set investment guidelines for yourself including your desired profit margin and sell when the market prices reaches your target prices. You can use JMMB’s Moneyline to enter the price for a stock at which it should be automatically sold, making this an automatic process for you.
Taken from JMMB’s Finance Made Simple with Michelle series which appears in The Gleaner. Michelle Sinclair-Doyley, Manager, Client Financial Education, JMMB Group.
