Business View Caribbean | May 2016

22 May 2016 - Business View Caribbean Business View Caribbean - May 2016 23 It is incumbent on each investor to think and do the necessary due diligence before invest- ing. Here are seven investment tips from the Financial Services Commission of Jamaica: 1. Determine your personal investment goals To better understand yourself as an investor, consider your risk tolerance, investment knowledge, investment objectives, income, and investment time horizons. Work with a licensed investment advisor to help you determine the investments that best match your goals. 2. Start early Investing over longer time periods allows you to take advantage of "compounding". This is one of the best ways to make your money work for you. Compounding is essentially money multiplying itself by earning a re- turn on the return. 3. Invest consistently Taking advantage of the opportunity to invest smaller amounts on a consistent basis is often easier than making a large, lump-sum contribution. A regular in- vestment plan allows you to choose when and how often you make contributions and ensures you make investing a priority. Practice the concept of “dollar-cost averaging”, whereby you invest a fixed amount at regu- lar intervals over a long period in your chosen invest- ment product(s) – this will lessen the risk of investing a large amount in a single investment at the wrong time. 4. Work on diversifying your portfolio Spreading your assets across a wide range of invest- ments is an effective way to reduce risk and increase potential returns over the long term. 5. Monitor your portfolio Investing makes it possible for your money to work for you. So keep a close watch on it by comparing the per- formance of your investments with similar products over the same period of time. 6. Choose the Right Professional Selecting the right financial professional is as impor- tant as choosing the right investment instrument. Thoroughly evaluate the background of any financial professional with whom you intend to do business and ensure that they are licensed and registered to carry out the business and services that they are offering. 7. Begin with the end in mind Whether you’re investing towards your education, a car, a family home, your children’s education or your retirement, successful investing involves making choices that meet your unique needs today and your financial goals for the future. Consider your personal circumstances and the time horizons of your goals when selecting an investment instrument.