MUTUAL FUNDS . INVESTMENTS   

Why Invest?

Published on: May 02, 2018

Author: Bliss Seepersad - Wealth Manager


Some of the most compelling reasons for investing are:

  • The prospect of not having to work your entire life and still maintain a comfortable life style
  • Funding your children’s education or the purchase of your dream home
  • Looking after major expenses without depleting your assets

If you keep your money “under your mattress or even in a regular savings account instead of investing it, your money is not working for you.  You will never have more than what you have “put away” (and we have not even factored in the effect of inflation).   Bottom line is there are two main ways to make money:

  1. By working
  2. By having your assets work for you

By investing your funds, you are actually getting your money to generate additional funds for you by:

  • Earning interest on what you have put away
  • Capital appreciation
  • Buying and selling assets that increase in value, thereby realizing the profit and also increasing the funds available for further investment

What are my options?

There are several options available for consideration, such as stocks and shares, bonds, mutual funds, real estate, your own business, art, precious metals or any combination of the above. The main objective therefore is to have investments that will generate more funds for you in the future.

Just as there are different investment options and vehicles to consider, there are different time horizons depending on the need to be addressed and the stage that you are at in your life cycle. Whatever your goal, be it to send your children to university, owning your home, retiring or sailing around the Caribbean, investing is essential to getting you where you want to be.

Market prices don’t always reflect value. A good strategy to consider is to choose investments based on long term prospects, not recent performance. Let’s consider how the market has performed over the past 5 years.

 

INDEX

Present

1 year ago

% change

5year ago

% change

Composite Index

1257

1230

+2.19%

1123

11.9%

All Trinidad and Tobago

1699

1793

-5.2%

1812

-6%

Dow Jones

24264

20651

17.49%

14547

66.79%

 

The figures above, illustrate clearly the importance of staying invested over the long term.  While over the past year the local and regional market indices reflect relatively flat growth, over the past 5 years the Composite Index has reflected growth of 11.9%. The Dow Jones which is reflective of the North American market has shown growth of 17.49% over the past year (this includes the rather volatile months this year) and growth of 66.79% over the past 5 years.

The growth above has taken place over a time of low interest rates in our banking sector (in many instances the interest rate paid on a regular savings account has been less than 0.1%) . Clearly, investing over the long term is a critical element of long term financial planning.

To find out more on investments contact GAM at 226-2799 or sign up now for a free consultation at http://trinidad.myguardiangroup.com/guardian-asset-management/gam-meeting-form/


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