Business Life - Issue 3

Issue 3 | December 2016

Painting The Town Plum!

What’s Inside?

8 TIPS FOR THE HOLIDAY 5 FUNDAMENTALS FOR EVERY ENTREPRENEUR

10 COMMANDMENTS OF PERSONAL FINANCE

From Palette To Portfolio DEVALUATION & INFLATION

+

2016 SEGMENT PERFORMANCE A REVIEW: 1 YEAR OF SSL FINANCIAL PLANNING

CONTENT 4

Welcome Letter

6

8 Tips for the Holidays

8

Asset Management’s Top Picks

10 5 Fundamentals for Every Entrepreneur 13

SSL Foundation - Math Matters

14

Painting the Town Plum

16

From Palette to Portfolio

18

A Review: One Year of SSL Financial Planning

21

2016 Segment Perfomance

22 The 10 Commandments of Personal Finance 24 Devaluation and Inflation, What do they Truly Mean for the Average Person?

26 6 UWI Students on a Mission to spread Financial Literacy

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editorial team Alanah Jones

Business Development Manager

Alanah's areas of concentration at SSL are Sales, Marketing and Culture. Under the Marketing and Brand arena, she oversees all aspects of the BusinessLife publication to ensure it aligns with the company's objectives and is relevant to our readers.

December 2016 Issue 3 info@sslinvest.com www.sslinvest.com 33½ Hope Road, Kingston 10 876.929.3400 Unit B10 10 Fairview Town Centre Montego Bay 876.764.0276 @ssljamaica

clfd

Renee Barnett Internal Control Officer

Although Renee enjoys a recent promotion outside of the Marketing & Brand team, she has been instrumental in the production of Business Life. She was responsible for coordinating and editing the content for the featured articles.

Contributors Alanah Jones Kelley Reid Kimberly Patterson Kris-Andrew Brown Lamar Harris Mark Croskery

Graphics Judine Johnson

Judine Johnson Graphic Designer &

SSL Foundation Coordinator

Judine uses the ideas generated by the team to construct the entire visual execution of Business Life. She develops the overall layout for the magazine, creating the aesthetic appeal for our readers.

REFLECTING ON 2016 WITH LAMAR HARRIS Dear friends, We have come to the close of another year and as customary we look to the past to see how far we have come, and to the future with anticipation of where we shall go.

For the financial sector, it has been an unprecedented year. The landscape has definitely changed and these are unchartered courses. Nonetheless certain core principles remain and it is with a watchful eye we have been able to navigate the times with great success.

Sensational headlines abound in 2016 many of which were targeted towards the financial sector; however, their significance to your investment portfolio must be put into perspective and analysed appropriately. The Panama Papers was definitely on everyone’s lips across the globe. It cast a pejorative light on wealth, whether this is justified has remained to be seen. Wealth has become a dirty word yet most people aspire to be wealthy. There are also the issues of privacy. The Mossack Fonseca IT breach caused great concern not from the perceived tax avoidance perspective but from a security perspective. For the most part, the disclosures in the Panama Papers did not reveal any noncompliance with any laws; rather, it exposed wealthy families, not to authorities to whom they report their wealth, but to unscrupulous persons.

On the other hand, there is the Wells Fargo scandal, that revealed pervasive and purposeful malfeasance. Post the 2008 financial sector meltdown, it was definitely evident that the ramifications for top level officers in the largest financial firms has changed. Executives should no longer expect to keep their jobs, as was the case with Mr. John Stumpf, now former Wells Fargo - CEO who promptly resigned.

Let us not forget across the pond where BREXIT created quite the ripple. How the Brits shall go about exiting the European Union remains to be seen. The devaluation of their currency was quickly felt upon the decision to exit.

The financial sector in 2016 also felt the impact of the ever-changing political environment locally and abroad. A Trump administration could not have been predicted 12 months ago! There was an instant market reaction; however, since then bonds have appreciated and most indices are reporting all time highs. As the pendulum continues to

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swing we stand ready to take advantage of the opportunities that are created. Further, the Federal Reserve has increased interest rates, as market indicators continue to indicate a strengthening US economy.

Jamaica has also seen a political change. The People's National Party lost the general election to the Labour Party who not only secured the national election but went on to secure even more seats in the local election, controlling the House of Representatives.

Kudos to Mrs. Marlene Street-Forrest and the rest of the Jamaica Stock Exchange who effectively lobbied for the continuation of the Junior Market concessions. We look forward to numerous listings in 2017 as companies seek to mirror the successes of AMG Packaging & Paper Company and Caribbean Cream “Kremi� who are listed on the Junior Stock Exchange.

The SSL Team would like to extend a hearty thank you to our clients and soon to be clients for supporting the Company, travelling the road to even more exciting growth for our clients and the Company.

2017 is poised to reveal an even more agile and far reaching SSL, well on its way to being the Google of Finance.

Thank you for your readership and we hope you enjoy the third issue of BusinessLife.

From our family to yours, we wish you the season's happiest greetings and prosperity for the new year.

Yours respectfully,

Lamar Harris General Manager & Company Secretary

5

8Tips

FOR THE HOLIDAYS - Kelley Reid Asset Manager

“It’s the most wonderful time of the year!”

Decorations are out, holiday’s songs are playing and Christmas movies are on every channel. The holiday seasons is here and the chaos is upon us. So here are 8 financial housekeeping tips to make sure you ring in 2017 right.

1. Make a gift list

2. Update your budget

As old fashion as this may

Separate

sound, make a list of all the

spending from your holiday

persons you will be giving

expenses,

gifts to. Assign a dollar

Nobody likes to build a

amount to each gift, the

budget, but now is the

total

be

perfect time to create a

affordable without the use

plan to track your spending

of credit cards.

using Microsoft excel or

amount

must

your

everyday

this

free financial apps.

3. Rebalance your portfolio Now is a good time to call up your broker and review your stock holdings. Take a look at the best and worst performers, if you have made significant gains during the year, it may be a good idea to sell some of the gains to offset the losses and use the money to reinvest. Furthermore ensure that you are not overexposed in one stock as diversity is your best friend.

As the economic climate is changing with Mr. Trump set to take office in January 2017, how confident are you about the stocks you’ve invested in? Maybe it’s time sell those small-cap stocks and join large cap stocks with multiple revenue streams.

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BusinessLife - December 2016

is

key.

4. Review your beneficiary information Not a pleasant topic, but an important one.

During the

5. Emergency fund

course of the year, major life

You had to see this one coming.

events may have happened

Every year is an opportunity to start

such as marriage, the birth of

or replenish your emergency fund.

a child or divorce. The end of

Set aside 3-6 months of living

the year is a good time to

expenses for unexpected cost. If

ensure your polices are up to

during the year you happened to dip

date and the people most

into your emergency fund replenish

important

it with that year-end bonus.

to

you

are

protected.

6. Buy gifts ahead of the season The hustle and bustle of the holidays is not fun but what’s worse

are

those

holiday

It is important to recognize that every year, the amount set aside should increase as the standard of living and general expenses increase as well.

prices. Buying gifts before the holidays comes around will not only save time but money.

A neat trick my Aunt taught me

is

to

buy

holiday

7. Check your credit card points

decorations after the season

Use those reward points that you’ve

has ended, as stores always

accumulated throughout the year to

sell them out at reasonable

buy gifts for the persons on your list.

prices.

8. Donations During the holiday season, don’t forget the less fortunate. Donate items that you no longer use or wear along with cash and even time.

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Our Asset Management Team at SSL is extremely busy. They are constantly monitoring the markets, creating investment proposals, identifying opportunities, negotiating prices, and making sure that your money is working for you at optimal eďŹƒciency. They had limited time to spare, but were able to give the BusinessLife editorial team some insight into the securities on the Local and US market that they recommend, and why.

CISCO SYSTEMS [CSCO] Cisco Systems is the leading developer and provider of IP-based networking hardware, telecommunications equipment, and other high-technology services and products.

TOP 2

Bonds [USD]

UNDER ARMOUR [UA] Under Armour Inc is one of the leading designers, marketers and distributors of authentic athletic footwear, apparel and accessories for a wide variety of sports and fitness activites.

AT&T 4.5% 2035 AT&T Inc. (T) is the second largest wireless service provider in North America and one of the world’s leading communications service carriers.

JAMAICA BROILERS GROUP (JBG)

SUPREME VENTURES LIMITED (SVL) Supreme Ventures has earned the

predominantly family-owned business

enviable reputation of being one of

domiciled in Jamaica, involved

the leading and more dynamic companies in Jamaica with its

sale of poultry and related food

well-recognized brand icon

products.

being the treasure chest.

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Stocks [USD]

CENTURYLINK 5.8% 2022 CenturyLink Inc. (CTL) is a leading rural local exchange carrier providing a range of communications services to its residential and business customers.

The Jamaica Broilers Group is a

primarily in the production and

TOP 2

TOP 2

Stocks [JMD]

BROKERAGE - FINANCIAL PLANNING - PRIVATE WEALTH MANAGEMENT

5Fundamentals

FOR EVERY ENTREPRENEUR - Mark Croskery President & CEO

All great businesses start with a “light bulb� idea. Write down all of your light bulb moments.

Invest time in showing, mentoring and teaching others. This will help you, as an entrepreneur, to move quickly and onto bigger things - because you have a team that can handle what you have taught them.

1

BE DIFFERENT

Let your brand stand out and do the talking...

When I graduated from university, the owner's of "Jordan's Furniture" gave the keynote speech. They made one comment about their branding and culture objectives that always stuck with me.

They dressed different on purpose, in casual clothing, their parking lots had bold signs, they never instructed customers where to park, and they encouraged everyone to be disruptive. They said that this helped them to position their brand as being different, which in turn, helped the company stand out.

2

AN IDEA WITHOUT A PLAN IS JUST A WISH

A lot of people have incredible ideas, incredible scrap books and incredible notes on the back of envelopes. Sometimes, the best advice is to execute and implement that hunger for that idea as soon as practical.

As Steve Jobs mentioned, if you have a mentality that you will live today like you will die tomorrow, then you may get more things done!

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3

ENSURE YOU GET INTO SOMETHING THAT IS SCALABLE.

Conceptualizing and executing are great achievements, but can it scale?

What will be your exit in 5 years? Will someone actually be attracted to your idea and business? Does it have scalability, in regard to, more locations, more parishes, more customers, more product lines? These are overall items that will grow your idea’s market share.

4

DON'T PARTNER, BUT OWN AND BE YOUR OWN COOK AND CAPTAIN FOR YOUR BUSINESS. Have you ever seen a kitchen argument between a sous chef and a head chef? Or, between a captain and a navigator?

Imagine how bad this can be with a Head and Deputy, then what it may be like with two CEOs, two Presidents or two Principals?

The visions can differ greatly between leaders. Ensure that whoever you bring on board in the early stages, or who you decide to involve in crafting your company's vision, has the same definitions as you, and possibly the same amount to lose as well.

5

CREATE YOUR CULTURE AND NOT SOMEONE ELSE'S

You're the owner! Always remember that. So, no matter who you put in place the buck will stop with you. Everyone looks at or calls the owner.

Finding awesome and credible team members takes time. It wouldn't happen as an entrepreneur overnight. So, you will have to be hands-on and inject yourself into the day to day operations to ensure your goals are accomplished. Don't be afraid to know and do everything.

Ensure you monitor, track and see things through.

Your culture will evolve in time. It wouldn't happen from a random retreat or a consultant asking random questions. It needs to come naturally based on your brand, product lines, and goals.

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Give the gift that keeps giving!

Buy a loved one a gift certiďŹ cate to start their investment portfolio today!

SSL Foundation implements Math Enrichment Programme he newly reinstated SSL Foundation has launched a long-term project called Math Matters — designed to increase the level of education of future generations.

The SSL Foundation is focused on enhancing the quality of life of the youth via empowerment through education, and has now officially implemented Math Matters, a math enrichment programme in alignment with the Ministry of Education’s mandate to increase numeracy levels in the country, according to a recent company news release.

The Foundation has adopted its first primary school, the Maxfield Park Primary. The school, located off Maxfield Avenue in Kingston, has students who face a great deal of adversity, the release noted. Some of them are exposed to issues including violence and poverty. Given their circumstances and the lack of resources at the school, learning is often difficult. The Maxfield Park Primary School has one of the lowest numeracy rates in Kingston & St Andrew. In 2015, they had a math mastery rate of 17 per cent at the grade four level and 10 per cent at the grade five level.

Through Math Matters, the SSL Foundation has signed a five year sponsorship contract with the school,and aims to increase their math

mastery rate to 85% over a five-year period.

“This is the first of many schools to be adopted. We hope to grow the foundation through partnerships so that we are able to adopt more schools in need of help with their numeracy rates. The underlying problem with numeracy in Jamaica is a very frightening one as Math is a fundamental subject. Students need to fully grasp this subject in order to function effectively in life after school”, said Renee Barnett, SSL Foundation Coordinator.

“We definitely want our children to be on that path to success and math is definitely one of those fundamental skills necessary to achieve this,” said Judine Johnson, SSL Foundation Coordinator.

“We can guarantee that the children at this school will benefit tremendously from this bold partnership. The tools and equipment that you will provide will help us immensely to increase our performance in numeracy, and within a short time frame we will be meeting the regional and national targets established by the Ministry of Education,” said Beverly Gallimore-Vernon, principal of the Maxfield Park Primary School.

Anyone interested in donating towards this initiative can contact the SSL Foundation at 876.929-3400 or email sslfoundation@sslinvest.com.

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From Palette To Portfolio!

HOW THIS ENTREPRENEUR HAS TAKEN CONTROL OF HER FUTURE

Kimberly Patterson embodies what it means to be young, passionate, headstrong and focused. As a SSL Financial Planning client, we thought it fitting to interview the professional make-up artist to find out what motivates her, and why she decided to not only start investing, but start her investment account at SSL! WHEN DID YOU START YOUR BUSINESS? I commenced my business as a makeup artist in the summer of 2010.

HOW DID YOU GET INTO THE BEAUTY INDUSTRY? It was a very spontaneous start for me, but my passion and drive for the business has propelled me to where I am today. I had a slight interest in makeup artistry as a hobby since my years at the Immaculate Conception High School but never thought of it as a career. It wasn't until the carnival season of 2010 when I was asked by various groups of ladies to do their makeup. I strategically planned out how I would operate that day as a business by building a team who had strengths in particular areas resulting in a smooth flow and success that first year. I then decided to further my education and network more which landed me jobs with major projects such as 'America's Next Top Model' and a very elite clientele.

WHAT MADE YOU DECIDE TO INVEST? Through reading a book titled "Rich Dad, Poor Dad" by Robert Kiyosaki, the importance of investment and financial independence stood out to me as a youth desiring financial stability. Instead of storing my money under a mattress, or have it sit in the bank, I wanted to put the knowledge I gained into practice.

WHAT MADE YOU CHOOSE SSL? I learned of SSL via one of my clients who is an owner of a successful corporation.

WHAT HAS YOUR SSL FINANCIAL PLANNING EXPERIENCE BEEN LIKE? I have recently started to invest with the company, however I feel secure and trusting in the aid of my SSL advisors. They have guided me carefully in my decision making and I am comfortable knowing that investing with them will afford me a great outcome.

WHAT ARE YOUR INVESTMENT GOALS? My goals are to eventually be able to make other major investments in real estate and larger companies trading on the stock market locally and internationally.

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WHO IS YOUR FAVOURITE SSL REPRESENTATIVE AND WHY? Kris-Andrew Brown has played a key role in my decision to invest with SSL. He did his research overnight before meeting with me the following day. I was very impressed knowing he knew my background, he helped me to discover the type of investor I was and answered all my questions when I was uncertain. I admired that he had so much knowledge in the field at such a young age.

WHAT IS THE ONE THING EVERYONE SHOULD KNOW ABOUT INVESTING? Investing is about taking risks! If you want to see great returns on your investment, do your research on the investment company, plan wisely and carefully with the help of your advisor, ask many questions and leave it in their hands. The bigger the risk, the greater the outcome.

WHAT IS YOUR NUMBER ONE PERSONAL RULE ABOUT MONEY? My number one personal rule about money is to "let your money work for you..."

- Robert Kiyosaki IF YOU COULD GIVE ONE PIECE OF ADVICE TO A YOUNGER MAKEUP ARTIST WHO WANTS TO START THEIR OWN BUSINESS, WHAT WOULD IT BE? My advice to a younger makeup artist is to take your business seriously. In order to do so, work hard and save as much as you can, focus on the assets versus the liabilities in regards to your lifestyle and business and finally, don't be afraid to take risks.

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roduct development should be at the core of any firm that strives to be an innovative leader. At Stocks and Securities Limited (SSL), we don’t just develop on a whim, to diversify revenue streams or to give people something to talk about. We develop products because our clients need them. We listen to the desires that come out of the portfolio reviews, the lunch meetings, the calls and the ‘by chance’ meetings that occur so frequently in Jamaica, and then use this information to innovate. In 2015, our Investment Management team developed the most tangible of its kind, financial products available in Jamaica: Safe Solutions, Plum Financial Plans Plans and the Plum 100 was added later in 2016. These are housed under the Financial Planning segment at SSL. One year later, we take this opportunity to evaluate our progress, commend our team and thank our clients for their participation.

When the global trend toward portfolio management, versus the brokerage model, became more popular at our 18

BusinessLife - December 2016

North American counterparts, we identified an opportunity that would mitigate an on-going pain point for local investors; trade fees. It is common in Jamaica that investors are charged a trade fee each time a trade is made on their account. This tends to eat away the gains that the investor is making as a result of the trade - a deterrent for investors who seek active management. It also incentivises increased trade recommendations from the brokerage firm. We designed our Financial Planning products to be more cost effective to our clients, with zero trade fees, while still achieving the benefits of full-time, active management and of course, greater returns.

Launched in November, 2015, SSL currently holds over US$2 million in assets under management of Financial Planning products for our clients. We believe that the success of these products can be credited to the careful construction and monitoring of the U.S. dollar securities chosen by our Investment Management team, the

the convenience that the low maintenance nature of the products provides to our clients, and the drive of our sales and service teams to deliver the product to the client.

Besides the product features, our Investment Management team has done an excellent job in applying strategies to maximize portfolio return to our clients. Our conservative Plum Plan is up 9.89% for its debut year ending October 31, 2016 - beating our expectations of 6% per year. While, our conservative Safe Solution has increased 10.16% during the same period - almost doubling our target return of 5.6%. Our clients have not only benefitted from this capital appreciation in U.S. dollar terms, but also the savings in trade fees that would typically be incurred on this level of active trading. Under Financial Planning, a management fee does not exceed 1.5% per year on the value of the portfolio. The moderate Plum Plans and Safe Solutions are up 6.27% and 8.12% respectively, surpassing the target return by 1.52%, while the aggressive portfolios for the same products have increased 6.75% and 5.87% respectively for the 12 months ending October 31, 2016.

The Plum Plans, with a minimum

Minimum Investment $3,000.00 USD

Minimum Investment $25,000.00 USD

Minimum Investment $100,000.00 USD BusinessLife - December 2016

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investment of US$25,000, and the Safe Solutions, starting at US$3,000, have been particularly popular with professionals ranging from 25-55 years old, who are seeking an investment solution that suits their busy lifestyles, holds best of breed securities, and will be realigned as necessary to encourage greater returns. The Plum 100 was designed to be the ideal ‘package for corporate treasury investments that produce consistent and favourable income. The Plum 100 starts at US$100,000.

The idea of a pre-packaged plan where investors own the individual securities, versus investing in a fund, is relatively new to the Jamaican investor. Our team, affectionately called, “The Money Team”, has injected themselves in several board rooms, offices, lunch

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rooms, lobbies, classrooms and public spaces during the past twelve months to build awareness of the Financial Planning products. Supported by marketing campaigns that highlight the message of “being of the boss of your own money and putting it to work”, we are pleased to see this segment continue to grow, perform and provide a practical solution to the investment needs of our clients and prospective clients.

SSL wishes to thank the clients that continue to put their trust in us and support our endeavours. We strongly believe in a mutually beneficial relationship between company and client and will continue to work to serve you in dynamic and innovative ways.

9M

Description

Q3

ending Sept 30

ending Sept 30

RUN WITH PLUM

10.57%

3.50%

US EQUITIES

11.02%

7.56%

US BONDS

10.39%

2.64%

JMD EQUITIES

37.63%

2.55%

* Figures represent the period: January 1, 2016 - September 30, 2016 * The historical returns are not indicative of future results.

12M

12M

PRODUCT TYPE

ending Oct 31, 2016

PRODUCT TYPE

ending Oct 31, 2016

CONSERVATIVE

10.16%

CONSERVATIVE

9.89%

MODERATE

8.12%

MODERATE

6.27%

AGGRESSIVE

5.87%

AGGRESSIVE

6.75%

* The annualized returns are not guaranteed returns. Returns may vary due to market fluctuations. * The historical returns are not indicative of future results.

PERIOD

RETURNS

Q3 ending Sept 30, 2016

6.44%

6M ending Sept 30, 2016

8.09%

* Figures represent the period: April 1, 2016 - October 1, 2016

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THE 10 COMMANDMENTS OF PERSONAL FINANCE - Kelley Reid Asset Manager

1. KEEP THY BUDGET HOLY The lack of financial discipline is the reason why these 10 commandments are necessary.

Living within your means is hard to do when you confuse the difference between wants and needs. Everyone should create a budget. Personally, I use an Excel sheet every month, using the 60-30-10 rule.

The rule states: - 60% of your income should go towards fixed costs: rent, food, utilities and transportation.

- 30% of your income should go towards your financial independence: savings, investments, emergency fund, and retirement.

- 10% of your income should be for discretionary spending: vacation and entertainment.

2. THOU SHALT BE SENSIBLE WITH CREDIT CARDS Credit cards can be great or your worst nightmare. Without caution, credit cards can put you in debt in no time, leaving you wondering, “How?” Therefore, never let your credit card limit be more than your pay cheque.

Another fatal mistake is only paying the minimum balance on your credit card. It’s like you’re begging the bank to take your money. And let’s have a round of applause for the people who take out several credit

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cards to pay other credit cards off; it’s like one big game of musical chairs, it’s fun until the music stops.

3. WOE UNTO YOU, CO-SIGNERS OF LOANS! Every now and again, a friend or family member may ask you to co-sign on a loan; sometimes it works out, but quite often it doesn’t. Then you’ll get that dreadful phone call telling you that it is now your responsibility to pay back his or her debt.

A general rule of thumb: If it is a hassle to get your money back whenever they borrow from you, DO NOT CO-SIGN. 4. BLESSED IS THE MAN WHO HAS AN EMERGENCY SAVINGS ACCOUNT Do not be derailed by unexpected expenses. Therefore, it is absolutely necessary to have at least three months’ living expenses. I would advise you not to even have an ATM card or cheque book for this account; that way you will not be tempted to spend for a so called “emergency”.

5. INVEST IN THYSELF FIRST Now before you jump for joy thinking that this point is about spending on yourself before paying the bills, calm down.

Whether it’s your first, second or tenth job, planning for retirement is essential. This should be separate and apart from what your company provides. Investments are great facilitators of retirement plans. With the utilisation of bonds, preference shares

and defensive equity stocks, you can be on your way to preserving your wealth for for the future.

9. THOU SHALT NOT PUT THYSELF IN DEBT FOR THE SAKE OF KEEPING UP WITH THY NEIGHBOURS

6. THOU SHALT NOT BE NAIVE ABOUT WORLD AFFAIRS Everything is interconnected. The wars in the Middle East, natural disasters, US elections, Brexit – they all affect you. Have you heard the saying, “When America sneezes, Jamaica catches a cold?

Have you seen the show “Keeping up Appearances”? The show revolves around a neurotic English lady named Hyacinth Bucket, who spends all her time projecting her prim and proper, fancy lifestyle to others while hiding her not so fancy family.

Oil, food, medication, the general cost of living changes when events like those listed occur. Being aware can allow you to make better decisions about your finances; for example – when to hedge using another currency, when to sell the gains from your investments or when to exit a bond due to high country risk.

7. BLESSED ARE THOSE WHO REFINANCE, FOR THEY SHALL INHERIT MONEY Refinancing simply means to finance something again, usually for a lower interest rate.

What was good for you five years ago may not make financial sense today. Market conditions are always changing, and so should you. It would be wise to shop around to different financial institutions to see which provides the best options that won’t bleed your wallet dry.

8. THOU SHALT NOT OVERSPEND Sounds simple enough. Generally, people tend to overspend when going through emotional times; a break-up, disappointment, mourning the loss of someone. This overindulgence provides short-term relief but can often lead to a personal financial crisis, because you have now created an unnecessary debt.

This is relevant today. Far too many people are living beyond their means because they have to show everyone how fabulous their life is, to be a participant in an unspoken competition. Be aware of your financial limits!

IF IT SOUNDS TOO GOOD TO BE TRUE, IT PROBABLY IS.

10. BE AWARE OF GET-RICH-QUICK SCHEMES If it sounds too good to be true, it probably is. If you get an offer which promises an extremely high rate of return on your money in no time – RED FLAG! Of course it sounds nice, but it’s oftentimes a scam and you will lose your hard-earned money.

Most wealthy people didn’t get that way with get-rich-quick schemes.

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DEVALUATION AND INFLATION,

What do they truly mean for the average person?

- Kris-Andrew Brown Sales Associate, Managed Products veryday we hear these jargons being tossed around. They are topics of conversation in just about every media outlet, coffee shop, bar and other social gatherings. These gatherings often turn into a replica of Gordon House, as persons propose amendments to fiscal policies, structural economic reforms, capital control and various other measures to be taken, in order to counter the increasing rate of depreciation of the Jamaican dollar relative to the US counterpart. Today, I am not here to assume a seat in parliament dissecting and making suggestions as to which economic change needs to be made to tackle the issue of increased devaluation and rising inflation.

Instead, I am here to shed some light on their effects and how we can take matters into our own hands to protect the value of the money for which we work so hard for.

It is imperative that the general public becomes more cognizant of the effects devaluation and inflation have on the value of the dollar we hold and its subsequent purchasing power.

Devaluation speaks to the reduction in the value of a country’s currency relative to another foreign currency. Further, if the nature of the reduction in value stems from market forces, as opposed to government actions or central bank policies (depreciation), there is one thing that stands true and resonates with the general public. Devaluation/depreciation means that the purchasing power of their money has declined.

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Let’s put things into perspective. At the start of the year, the exchange rate was approximately J $120.37 to US $1. By December (19/12/16) the dollar declined by 6.91% exchanging at J $128.69 to US $1.

What does this 7.1% devaluation mean for us? Well devaluation may result in a host of negative effects. It may give rise to inflation as imports become more expensive and we see this reflected in the increase of prices of goods and services.

Individuals who have debts in foreign currency will significantly feel the effects of devaluation when the cost of their debt repayments increase. The most prevalent effect is quite possibly the reduction in the purchasing power (the amount of products/services our money can buy) of our money. We now have to ‘fork out’ more of our money to buy the same items we could have bought for less a few months ago. Foreign goods, traveling, vacationing and general shopping become more expensive. In essence, we now spend more money to buy one US dollar.

The million dollar question? How exactly do we beat these two daunting factors that seem to be inevitable and how do we assume that vantage point? The simple answer? Invest, regardless of how small.

Taking a portion of your hard earned money and allocating it to investment instruments, thereby maximizing its earning potential.

The next line of questioning may be, where do I place my investments? Will my

money gain a better return in the US market or in the local market? The truth of the matter is that there is great earning potential at either end of the spectrum.

One thing that is worth mentioning is that investing in hard currency (e.g. USD) may act as an automatic hedge against the effects of devaluation. If you had US $1,000 at the start of the year and did absolutely nothing with it, by December, the value of that US $1,000 would have grown upwards of 6% relative to the Jamaican dollar. Now, let’s imagine if you had invested that same US $1,000 and the investment appreciated by 10%. That is a 10% gain on your US denominated investment, thereby further increasing the purchasing power of the US you hold.

These are excellent gains that we can all take advantage of by investing. I am by no means saying that similar profits occur right across the board, or that past performance is indicative of future results.

I am simply highlighting that there are additional revenue streams that can benefit the regular investor.

Local investments are generally more affordable, allowing a wider range of persons to start investing without the need of having large sums of money. However, considering that investing in the local market still exposes the value of your money to devaluation, any investment that you undertake, needs to outperform the rate of the devaluation and then some for you to realize an actual net positive increase. Investing is not only for the rich!

It is where we go to become wealthy.

Take matters into your own hands, protect the value and increase the purchasing power of your money

The local market is also quite attractive for investors looking to capitalize on capital appreciation. Let us look at a few local securities on the Main and Junior Market and their Year to Date (YTD) increase in stock price as at December 19: AMG Packaging & Paper Company Ltd | 205.00% YTD Jamaica Broilers Group | 45.32% YTD Seprod Ltd | 42.38% YTD Lasco Manufacturing | 39.50% YTD National Commercial Bank Ltd. | 22.71% YTD

Various brokerage houses offer expert advice on being a prudent investor. At Stocks and Security Limited (SSL), you will be guided by our highly experienced team who will analyse your investment goals and objectives and assess your risk appetite. They will also use research driven analysis to recommend and aid in the construction of a diversified and balanced portfolio tailored towards your investment goals. This team will guide you along your investment journey in building your wealth and securing a more comfortable future.

With this said, it is important for us to consider investing as an alternate avenue to generate income and grow your wealth.

Take matters into your own hands, protect the value and increase the purchasing power of your money!

BusinessLife - December 2016

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6 UWI STUDENTS ON A MISSION TO SPREAD FINANCIAL LITERACY On August 1, 2016, we launched our SSL Brand Ambassador program. Six UWI students were recruited, trained, tested and lead into the field by Business Development Manager, Alanah Jones, with the goals of increasing awareness of the importance of financial literacy and educating the public about SSL's products and services. Most importantly, these students have been able to acquire working experience, learn about the financial markets, build relationships and improve their time management skills.

Our SSL Brand Ambassadors are Romario Sterling, Abuna Jones, Joseph Quallo, Brittney East, Joelle Baker and Connoly Black. If you see them around, make sure to ask them about investing!

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Let’s Talk!

33½ Hope Road Kingston 10 876.929.3400

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Unit B10 10 Fairview Town Centre Montego Bay 876.764.0276

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info@sslinvest.com www.sslinvest.com