As the world continues to recover from the impact of the novel coronavirus pandemic on investment portfolios, more local investors are placing greater emphasis on diversifying their portfolios to reduce risks.
In today’s article, we’ll explore the opportunities which exist across the world and in the region that can assist investors seek their alpha.
Locally, brokers such as VM Wealth Management, Stocks and Securities Limited, GK Capital Management Limited, Proven Wealth Limited, and Sterling Asset Management Limited (SAML) offer investors the opportunity to purchase stocks that are listed on the New York Stock Exchange and Nasdaq. Almost all securities dealers facilitate the purchase of bonds across the world once the client meets the minimum requirement to purchase these stocks. However, the caveat in this case is that the commission on these trades might be prohibitive to the general investor who probably cannot afford to spend US $20 – US $75 per trade compared to wealthier or accredited investors who can afford these fees.
As a result of advances in technology and the entry of brokers like Robinhood, there are numerous brokers in the United States of America who offer commission free trading on all stock trades, excluding some exchange traded funds (ETF) and pink sheet stocks. Otherwise, the regular man has access to a world of opportunities. This has been further enhanced by the fact that an investor can now purchase fractional shares in companies instead of purchasing a whole share if its nominal price is too high.
Amazon products and services are used every second across the globe from their e-commerce website, Twitch and even Ring. So, an investor can now spend US $0.33 to start their journey rather than spending US$3,325.65 ($515,475.75) to get a whole share. This also extends to companies like Facebook, Apple, Netflix, Microsoft, and Walmart, which command a global presence with their products and services. Most of these companies have seen their stock prices increase by 50 – 100 per cent since the pandemic.
Through a global entity like Interactive Brokers, one can buy shares in firms such as Unilever PLC, AstraZeneca PLC, Sagicor Financial Company Limited, BMW Group, Bank of Nova Scotia, L’Oreal, Total, and Juventus. This isn’t limited to just one broker, but the world is your oyster once you have the capital and time.
If you don’t have the time to purchase across the world, you can always purchase an ETF managed by an investment management firm like Vanguard, Ark Invest or Slate Street Global Advisors. This would create the opportunity for you to gain exposure to various investments without having to create multiple brokerage accounts. ETF’s can be specific to a particular sector like technology, energy or finance and can even provide income to the investor. Index funds also exist so that one can get exposure to the performance of an index like the S&P 500.
Within the region, the Jamaica Stock Exchange (JSE) and the Trinidad and Tobago Stock Exchange (TTSE) are the most renowned. If an investor would like to invest in stocks on the TTSE, they can always open a brokerage account with JMMB or NCB Capital Markets, which are brokers in the twin island republic. Another option for one to gain regional or global exposure is through unit trusts locally. This can include the Scotia Premium Growth Fund, the Sagicor Sigma Global Equity, VM Wealth Global Equity Growth Portfolio, or the SAML Mutual fund.
Even if one might be daunted by the wire fees that are associated with transferring money from Jamaica, the rise of online wallets like Skrill and Wise have made it a lot cheaper for anyone to transfer money to different markets. This, along with the rapid change in the world, means that an investor needs to capitalise on the opportunity and find ways to hedge against the depreciation of the local currency. Remember that no investment is guaranteed, but risk is an element of reward.