What are you doing about your personal wealth creation? At the Scotia DBG Investments seminar held at the Terra Nova on Wednesday, Christopher Chin Loy, Assistant Vice President, Brokerage and Structural Products told the audience that the time to start planning is now.

"The earlier the discipline for Investing is introduced, the easier the transitions through your life cycle stages will be up to retirement." He advised, "There is no question that the key to developing real sustainable wealth is through prudent investing- in assets; in yourself; or in an enterprise/business." Chin Loy asked the audience to consider the following questions.

"What are you doing about your personal Wealth Creation now? What changes need to be made to your lifestyle now to accommodate for the future? What are your Risk Aversion levels like right now? Do they match your "Life Cycle Stages." He added, "Remember that retirement expenses may be over a longer time frame than your working life was in generating wealth.

THE MAGIC OF COMPOUNDING

Next, Chin Loy spoke of the 7th wonder of the world
- Compound Interest.
Essentially, the earlier you start, the better. In his presentation, Chin Loy explained that the longer you have until retirement, the more your invested funds will grow. Someone with 30 years until retirement can expect to have an initial investment of J$710,000 (US$10,000) grow to over J$12 million in 30 years. However, should you start much later in life, say when you have only five years to retire, then that initial investment will only be worth J$1.143 million.

THE COST OF FEAR

Chin Loy noted that many investors fear the sometimes turbulent nature of investing. And find many excuses why they should not be invested in the market. However, taking this attitude can be very costly. Chin Loy pointed out that investors who paniced in the 1980s recession and did not invest, lost the opportunity to gain returns of over 1000 percent by 2008.

REGULAR CONTRIBUTIONS

Just investing a lump sum is not enough. Chin Loy advocates setting up a standing order with your bank that will sweep the funds into an investment account. "By developing the discipline of a Pre-authorized Contribution Plan (PAC) to your investments, even at a moderate rate, you will always build wealth with the intention of enjoying it at a future date."

DON'T PUT ALL YOUR EGGS.....

For investors who want a better way to manage the peaks and valleys of investing, Chin Loy advocates diversification. He explains, "Instead of working on 'timing' work on choosing the right baskets of the moment." And the tried and true method of diversification holds. "Don't chase the latest high performer; don't put all your eggs in one basket and diversify your assets into the right baskets." That said, Chin Loy cautions against over diverisfication. "By no means does this mean that investors should run out and buy everything."

THE BASICS

In his presentation, he outlined how investors can position themselves and their funds to create wealth. He first outlined the basic rules of investing:

*PAY YOURSELF FIRST!
*Asset Allocation is the single most important factor in developing your portfolio.

*Wherever possible, Investments minimizing your Tax exposure should be considered

*Equities and mutual funds are perfect examples of mediums of tax efficient investing.

THE LOCAL STOCK MARKET

Looking specifically at local equities, Chin Loy told the audience that to pick the right stocks, one should utilise various research data and discuss the information with your Investment Advisor. Also diversify appropriately to meet each of your different life cycle goals. And he noted that one should, "Stay away from what you don't know."

For investors who are ready to buy stocks now, Chin Loy gave the following recommendations.

STOCK RECOMMENDATIONS

. Scotiabank Group of Jamaica (SGJ)
. National Commercial Bank of Jamaica (NCBJ)
. Carreras (CARR)
. Pan Jamaican Investments (PJAM)
. Jamaica Broilers Group (JBG)
. Grace Kennedy & Co Ltd

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