ADVISORY COLUMN: PERSONAL FINANCIAL ADVISER
QUESTION: How can I benefit from the new gains in the stock market?
– Lois
FINANCIAL ADVISER: If you have not yet benefited from the gains in this run of the stock market, you have missed quite a lot. That is not to say that you cannot reap any benefits if you choose to invest now.
You should not expect to see the kinds of gains experienced in the last three years or so. The market had been in a quiet mode for a long time, some times more than others. When it rebounded, therefore, many stocks had significant scope for upward movement – and they did move.
Considering where the prices of most stocks are today, even big price movements may see only moderate movement in percentage terms even if the market continues in this vein for a while.
Always bear in mind that investing in stocks is primarily a long-term activity although there are times when significant gains can be realised in a short time. Bear in mind also that there can be significant fluctuations in the short term.
You would likely have noticed that there has been a steady increase in new listings. Expect more. Companies tend to come to the market when activity is robust and investors are confident about its current and future performance. Add to that the efforts of the stock exchange to entice more companies to list.
New listings tend to be priced to allow price appreciation. In many cases, too, listing is followed by meaningful improvement in the financial performance of the companies. This presents opportunities for gains.
But even companies which have been listed for a long time on the Jamaica Stock Exchange have potential to give you good returns as can be seen from the consistent increases in their profits. Some are expanding into new markets. Others are introducing new products and services and some are radically changing how they operate in order to be better able to serve the market and respond to competition.
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