- Winston Sill/Freelance Photographer
LEFT: Speaking at the investment forum organised by the National Commercial Bank is Christopher Williams, deputy managing director of NCB Capital Markets Ltd. Listening are Audrey Chin, senior vice-president of marketing and client relations at NCB Capital Markets Ltd, and Courtney Campbell, senior assistant general manager at NCB Retail Markets Ltd.
RIGHT: Members of the public registering for the forum held last Tuesday at the Jamaica Pegasus Hotel in New Kingston.
Dennise Williams, Staff Reporter
OLD-TIME people used to say, one-one coco fill basket. The National Commercial Bank (NCB) fully endorses that sentiment.
According to NCB, if you save $50 (yes, Jamaican dollars) per day over 18 years at 10 per cent, with compound interest, this amounts to $18 million!!
And so, with wealth creation in mind, NCB hosted their forum 'On Becoming Financially Independent' at the Pegasus Hotel on February 17.
The seminar highlighted the various ways to create wealth with, naturally, the help of NCB.
Ingrid Chambers, managing director of NCB Insurance Company Ltd., opened the forum with this: "A spindly old man was heard to say resignedly at the end of his career: 'I started out with nothing, and I still have most of it.'"
From there, the main presenters outlined how different financial strategies can create wealth. Sunday Business now gives a little teaser from each presentation.
DIVERSIFICATION
Audrey Chin, senior vice-president of marketing and client relations at NCB Capital Markets Ltd., spoke on 'Developing a Diversified Portfolio.'
Mrs. Chin identified reasons why one should diversify:
Different assets carry different levels of risk
Return on assets vary depending on market conditions
Provides a 'buffer' against unpredictable swings in the market conditions
Changing national and international market conditions may impact country and currency risk.
Mrs. Chin states that a well-balanced portfolio should contain a combination of the following instruments:
Equities
Individual Stocks
Mutual Funds
Money Market (less than 365 days)
BOJ repos
Corporate Paper Fixed Income (over 365 days)
Treasury Bills
Indexed Bonds
Investment debenture
Local Registered Stock
Long-term savings account
Global bonds
Mrs. Chin's tips for successful investing include, "applying investment strategies which minimize the effect of inflation, devaluation and taxation. One should also develop a long-term relationship with your investment adviser and stay on track."
Courtney Campbell, head of NCB retail banking division, spoke on 'Borrowing to Create Wealth.'
He stated, "The benefits of borrowing for investment purposes are that it increases the total amount of money working for you. It increases your investment income and it allows for accelerated growth in the value of your portfolio over time."
Mr. Campbell cautioned, however, that there are risks involved. One of the major one is the risk of rising interest rates that could restrict your ability to meet the loan payments.
That said, he gave an example of how the principle works.
You have $10,000 invested in an asset and it increases in value by 10 per cent, the gain will be $1,000.
If you had borrowed $20,000 and added your $10,000 to invest a total of $30,000 in the same type of asset, the 10 per cent gain would have been $3,000.
This means your return on your original $10,000 is now $3,000 or 30 per cent (excluding interest and other costs).
STOCK MARKET GROWTH
John Jackson, financial analyst, spoke on 'Wealth Creation and Preservation.'
He gave some examples of the growth of money placed on the Jamaica Stock Exchange.
"Carreras and the Bank of Nova Scotia (BNS) have done well for investors. If one invested J$100,000 in 1990 in Carreras stock, that stock would be worth J$3.33 million. That same $100,000 invested in BNS stock in 1990 is now worth $4 million."
Mr. Jackson also spoke on various factors affecting investments on the JSE.
He provided these facts:
The JSE had a good year in 2003
The JSE is off to a flying start in 2004
Profits of most of the companies on the JSE are strong
Since interest rates are down, the best way to get adequate returns on funds would be to invest in the JSE, as good stock selection would outdo all other investments.
As Ms. Chambers stated during the forum, "Most of us present at this forum may not have been born with, or inherited, the proverbial gold spoon dangling from our mouths. A lot of us, however, do have a real opportunity during the tenure of our employment to make good on securing our own gold spoon; to improve our own individual lots and enjoy a better quality of life today, but also making provision for the desired financial future."
