Stock markets all over the world are plunging due to the effect of the coronavirus pandemic, and the Jamaica Stock Exchange has not been immune. After being the top performing market in the world for five consecutive years, it crashed, losing over half a trillion dollars in wealth since February.
This has caused a great wave of uncertainty among investors, pondering whether to cash out of the market or pull through this period.
But if you ask Director of the Jamaica Stock Exchange (JSE), Marlene Street-Forrest for her advice- stay for the long haul, as the market will recover.
“Investing in the stock market is about long term investments, and one should look at what happens in the long term. Taking a long view is very very important in a time like this,” she said.
Street-Forrest was speaking at an online conference recently, put on by the Honeybun Foundation. The conference focused on maximising business and leadership opportunities during the coronavirus pandemic.
She urged investors to be a little more analytical of the stock market before pulling out.
“One can also look at, what are the stocks that I have in my portfolio, and which are the stocks that will perform for me within a crisis and immediately thereafter. And so while not taking those funds out, one could simply look at diversifying within the market as against going outside of the market,” she said.
She also wants them to consider what the government and the Jamaica Stock Exchange is doing to ensure the market remains viable.
“When you’re looking to cash out, think about if the Government of Jamaica is doing everything to stimulate the market quickly?
“Is the stock exchange doing enough to encourage confidence within our structure at this point in time? Almost all our staff members are working remotely, we have employed technologies to ensure that the market continues to operate,” she said.
She said they should also not forget the previous success of the JSE, success she is confident it will return to.
“Jamaican companies, most of all, they are resilient. Anybody who had invested in the market over a five-year period, from 2014 to 2019, if they invested in everything on that stock market, they would have seen approximately a 400 per cent increase in their investments. They would have also been able to see that, from the standpoint of the value of the businesses to this market, we would have had $3 trillion in market capitalisation,” she said.