Dennise Williams, Staff ReporterWhile we all agree that creating wealth is important, for many persons, creating an investment portfolio can be a daunting task. And of course, to execute a portfolio properly, you need a licensed financial adviser.
However, to give our readers a head start, we asked Karen FitzRitson, director of FitzRitson and Associates and noted financial analyst, to look at four individuals with $200,000 to invest and give them a sample portfolio based on their individual financial objectives.
The minimum investment horizon is 24 months because, realistically, wealth creation does not happen overnight. It takes time, patience and dedication.
Economic Backdrop
Ms. FitzRitson begins with an outline of Jamaica's current situation.
"You cannot invest in a vacuum and so let us acknowledge what is going on in the wider economy."
1. Spiralling inflation mainly contributed by increased consumption and international factors such as rising oil prices. Inflation fuel, 8.9 per cent point to point as at the end of July.
2. Steady money interest rates
ranging between 12-13 per cent, dependent on the instrument.
3. Stock market year-to-date decline of 9.9 per cent.
4. Devaluation of the Jamaican dollar against other foreign currencies. For example, the dollar has depreciated against the U.S. dollar by 1.9 per cent on a year-to-date basis.
5. Trade balance. For the period January to April, this is down by almost $1 billion $931.08 million.
Assumptions
Importantly, one needs to make certain assumptions about the individuals. "Next, you have to look at the assumptions of the situation as I am not the personal financial adviser for any of the participants. Instead, I am creating moderately aggressive profiles against the backdrop of the current investment climate with the assumption that this will be the general investment climate for the next two years."
With these factors taken into consideration, one can now create specific portfolios for the respective individuals.
