At what age should you start investing?
The best time to start investing is NOW, even though the rule of thumb is to start after your first pay cheque. Starting early creates a major advantage because time is of critical importance in making your money work for you. It might seem challenging at first, but “the future depends on what you do today” – Mahatma Gandhi.
With every venture there are challenges, and there are common excuses for not investing. Young people may think that they have time on their hands and so procrastinate instead of using time to their advantage. Others may think that their income is not enough or they may have too many expenses. The convenient time may never arise, therefore whatever your stage in life, it is critical to start investing immediately for your future. It will require discipline and sacrifice, but planning a credible budget and sticking with that budget will help to reduce the temptation to use funds invested before they are needed.
Investing early will allow you to be able to take calculated or strategic risks with your money. Investing involves risks, but calculated risks will equate to reward. At a younger age, you can structure your portfolio with a greater portion of funds invested in riskier assets. These assets will have a better chance to generate higher returns over the long run. Investments in riskier assets such as stocks have historically outperformed the rate of inflation. Hence, there will be less concerns about the loss of purchasing power from your investment.
CAPITAL GROWTH FUND
Barita Unit Trusts offer the Capital Growth Fund (a pooled fund) which provides investors with the opportunity to invest primarily in stocks. This is suitable for investors who have an investment horizon of at least five years and are able to tolerate short-term fluctuations in the value of their investment.
Investing consistently is also extremely powerful, as you are able to benefit from periods of extended portfolio growth. You are also able to recover from periods of extended portfolio declines without much concern about not recovering at least the initial value of your investment. Being consistent allows you to gain more from your investments through compounding, which is interest growing on your interest, plus your initial investment, over time. One such solution through Barita is the FX Bond Portfolio, which allows investors to pool funds and invest in bonds that would otherwise be unavailable to them because of the amount required to buy these instruments individually. The FX Bond Portfolio is US$-denominated and also provides protection against the devaluation of the local currency.
There is an income benefit from investing which helps with current or future spending. Investing early can help to secure a comfortable retirement with additional income to support or substitute for a pension. Also, there is current expenditure for which there are many possible uses of funds invested, such as medical emergencies, higher education, your children’s education or starting a business. Additionally, some investments provide a steady income stream which can help to offset current expenses. One such investment solution is the Barita Income Portfolio denominated in Jamaican dollars and comprises local government securities, sovereign government securities and corporate enterprises of high-grade ratings. This investment allows for income to be paid at regular intervals while the principal is rolled over to the next interestpayment period. Because of the high grade of the instruments involved, the Income Portfolio is attractive for investors with a low to moderate risk tolerance who are seeking regular income.
Don’t wait! Get started today! A Barita investment adviser is ready to help you with your budget and will tailor the right portfolio for your specific needs.