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Investment Lessons for Dads » 3 Strategies for Investing in US Stocks » Market Update & Economic Overview - May 2021
VMIL SIGNS $700M FACILITY WITH KINGSTON PROPERTIES
Investment Tips for Dads
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VMIL signs $700M facility with Kingston Properties
3 Strategies for Trading US Stocks
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Market Update and Economic Overview
Evette Bryan MEET THE TEAM
Senior Manager, Treasury VM Wealth Management Mrs. Evette Bryan joined Victoria Mutual Wealth Management Limited (VMWM) as a Client Relations Officer in July 2001. She quickly advanced to the position of a Senior Investment Advisor and Treasury Officer by 2003. In her current role as Senior Manager – Treasury, she practices due diligence in asset allocation on behalf of both the company and clients. Having acquired over 20 years of experience in banking and finance, Mrs. Bryan is quite adept at financial problem solving, risk management, and training. Prior to joining VMWM, she served in the private sector as an Accounts Supervisor at one of the leading financial institutions in Jamaica. Mrs. Bryan holds an MBA in Banking and Finance from the Mona School of Business, University of the West Indies, Mona. She has also excelled in professional short courses focusing on Strategic Financial Management and Portfolio Management, from Fitz Ritson and Associates. Her vision for the Treasury Department is that it will continuously reflect the tenets of Flexibility, Integrity and Teamwork whilst practicing the precepts of strategic risk management and effective and efficient asset allocation.
Investment Lessons
FOR DAD
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hanks to Fathers’ Day, June is a time when fathers become the focus for loved ones. For many, dad is the one who delivers sage money advice; but, while they’re often thought of as having all their ducks in a row, patriarchs don’t always have everything under control – especially their finances – and can, at times, use some pointers themselves. There are countless lessons from fathers to be found on the internet, here are a few ideas we thought might be useful for any father:
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Make sure you’re okay first – You need to be in a solid place before you start to think about investing for your loved ones. You want to make sure your financial position will sustainably allow you to provide for them on an ongoing basis. This means having an emergency fund and life insurance in place at a minimum.
Start early – The earlier the better when it comes to investing. When investing for your children’s future, that means the best time to start is the day you know they’re on the way. The longer your time horizon, the more options you’ll have. Your portfolio has more time to recover from short-term ups and downs in the market and more time to benefit from the miracle of compound interest. Encourage cash gifts – Once you’ve set up an investment account that allows for deposits, it’s a good idea to let family and friends know. For birthdays and other special occasions, make cash or deposits to your child’s investment account an option. Over time, these contributions will be highly beneficial, and will benefit your child’s future more than toys or clothes ever could. Diversify, diversify, diversify – Diversification is an effective way to guard against risk. It is also a way to set up a solid financial foundation for your children. You can start one account for college, one that will be their emergency fund and one that will eventually become their nest egg. The goal for each investment should
Fathers just want the best for their children, and giving them a solid financial foundation and the knowledge of how to manage it is one of the best gifts they could ever receive. determine what assets the funds get invested in and how accessible they will be. Teach them about money – Providing for your children will be further enhanced once they know how to manage their finances. You can use age-appropriate lessons starting as early as kindergarten to teach them money basics, gradually graduating to more advanced methods as they get older. There are books and online resources to help with this. It is an investment of time and effort that will pay off invaluably. There are many ways to get to the goals you have in mind for your children. These lessons are just a few ideas, and they will hopefully get you thinking about some of your own. Fathers just want the best for their children, and giving them a solid financial foundation and the knowledge of how to manage it is one of the best gifts they could ever receive.
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3 Strategies for
TRADING US STOCKS
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ith the worst of the pandemic seemingly behind us, the US Stock Market has been regaining its attractiveness to investors. The American market is driven by different forces than the Jamaican market thus requiring different approaches to buying and selling equities there. For investors interested in trading US stocks, here are three major strategies that might be useful to know:
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Position Trading is a popular, if conservative, strategy that involves holding a specific position over an extended period, usually months or even years. Shortterm price fluctuations often cause traders to make irrational trading decisions. Position traders tend to rely on fundamental analysis when they’re evaluating a company in order to decide whether to buy or sell the stock. They may also use technical analysis to look at trends and historical patterns to help them decide on appropriate entry and exit prices for them. This strategy has been endorsed by investors like Warren Buffet, who has said he only invests in stocks that he can hold for at least 10 years. Swing Trading, as the name implies, is a strategy that entails trading on the market as it swings in both directions. The goal of a swing trader is to capitalize on short-term changes in the market as stock prices move up or down. They will buy a security when they expect that the price of the stock will rise and sell when they anticipate the price going down. The popular phrase ‘buy low, sell high’ came out of this strategy. Not for the risk averse, swing trading is a technical approach that involves continuous analysis of stock charts and trading patterns. News Trading is a strategy based on market expectations prior to or following news releases and financial reports. This type of trading requires close monitoring of the markets and ready access to the relevant sources of information. It also requires fast execution of trades, as news can travel very quickly across digital platforms. After the information is released, news traders must do quick assessments and decide whether to buy, hold or sell their securities. This strategy tends to be responsible
for some of the larger shifts in the market, due to the large number of traders with access to the information as well as the domino effect that can happen once other investors see the prices moving.
While these three strategies are distinct, many investors employ a combination of two or more. And it is easy to imagine a diverse portfolio that would benefit from the application of all three strategies at different times. While these three strategies are distinct, many investors employ a combination of two or more. A position trader, for example, might decide to readjust the asset allocation in her portfolio based on a news report. Swing traders often watch the news and look out for financial reports to inform their projections and their trading decisions. And it is easy to imagine a diverse portfolio that would benefit from the application of all three strategies at different times. The important thing is to have an entry and exit strategy for every trade you make. Over time, with your end goals in mind, and taking your risk appetite into consideration you should be able to determine a strategic approach that works for you.
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VMIL signs $700-million facility with Kingston Properties Victoria Mutual Investments Limited (VMIL) has inked a $700-million deal with real estate investment company Kingston Properties Limited (KPREIT) in the form of a 13-month bridge loan to complete the expansion of its property portfolio. Dwight Jackson, assistant vicepresident, corporate finance, Victoria Mutual Wealth Management Limited (VMWM), said this financing solution aligns well with the VMIL’s and VMWM’s strategic objective of providing solutions which fit its clients’ unique needs. “As part of the overall thrust of the
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business, we aim to provide financial solutions that allow our clients to take full advantage of opportunities to fine-tune their business and/ or expansion plans. In a crowded market, we differentiate ourselves by understanding our clients’ business and using this knowledge to structure financial solutions that can be leveraged to deliver increased return on investment. That is paramount to us, and this is considered in every step of the process we execute,” Jackson said. He added that given that the bridge loan is a short-term facility, Kingston Properties has also sought to engage
This financing solution aligns well with the VMIL’s and VMWM’s strategic objective of providing solutions which fit its clients’ unique needs.
Click here to see our Stock Picks as at June 22, 2021
VM Wealth Management Ltd in assisting with providing a longer-term financing solution as part of the real estate entity’s larger push to expand its portfolio in Jamaica, the Cayman Islands, and the United States. Kevin Richards, CEO, Kingston Properties Limited, said: “This round of financing will allow us to continue to expand our portfolio, mainly in the geographic regions that we have been operating in the last four years.” He added that the facility follows the company’s 2019 rights issue, also brokered by VM Wealth Management, which raised $2 billion. He said that this fundraising push is in line with the company’s goal to exponentially grow the
business by increasing its equity to $10 billion and to increase the footprint of properties under its ownership or management to one million square feet by 2023.
Richards further noted that Kingston Properties is also looking to increase its investment in industrial properties over the next few years, in line with the growing e-commerce
industry globally. It will also be broadening its reach in the US, particularly in states outside of the hurricane corridor.
Wealth Knows
Averaging Down Averaging Down is a strategy of buying additional shares in a company at a lower price than that which was paid for the previous owned shares thereby decreasing the investor’s average purchase price. 9
Market Update and Economic Overiew May 2021
Fixed Income Market activity during May was heavily influenced by the debate on US inflation. While the Federal Reserve and Department of the Treasury maintained that the current spike in inflation should be transitory, many economists and investors hold the view that inflationary pressures could be more long-term. Read the full report
Money Market The Bank of Jamaica’s overnight rate of 0.50%, remained unchanged at the May 18, 2021 rate consideration. The next review is scheduled for June 30, but it is not anticipated that any change will be announced. The decision was based on the expectation that inflation will continue to trend within the BOJ’s inflation target of 4%-6% over the next 2 years. Read the full report
Equities Guardian Holdings Limited re-listed on the JSE on May 4, after a 7-year hiatus. At listing, it was the 3rd largest listed company by market capitalization. NCB Global Holdings is offering 2 million of its GHL holdings with 600,000 shares available to the general public at a price of $795.00 per share. Read the full report
Foreign Exchange During the month, the JMD, according to the BOJ’s Weighted Average Selling Rate (WASR) gained $4.96 (3.32%) to close at $149.35. Net International Reserves (NIR) increased by US$100.92 million to US$3.419 billion in May. This represented 30.57 weeks of goods and services imports and 140.4% of ARA (adequacy) metric. Read the full report
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