JAMAICANS are being reminded to let their money sit in their investment account a little bit longer in order to reap the benefits.

Financial planner Sherace Pinnock has been offering investor education online through her business “Talk money to me” and has observed that many persons, while completely aware of how to invest, are still not using their investment accounts properly.

“If you take out your money before time or before your expected goal, you may end up losing on the investment,” Pinnock explained to the Jamaica Observer. She said treating an investment account like it’s a savings account is a big mistake. Though savings and investing are terms that are sometimes used interchangeably, she says it is important to note that they are very different and individuals should consider investing separately from savings.

“The features of a savings account may not be the features of an investment account, so we have to understand that we can’t treat it the same way,” Pinnock added.

Understanding the difference between saving and investing is essential to ensure financial security and a bright future. Saving to buy assets or to fund education is traditionally taught; however, “we don’t think of investment in that category [to save],” Pinnock said. This is something she has been trying to encourage amongst individuals citing that the opportunities are far better than having a regular savings account “because when you take into account inflation and everything, your savings account is really not doing as much for you as an investment account could.”

Investing is a way to grow your money over time by putting it to work in financial instruments such as stocks, bonds, and mutual funds. Unlike saving, investing involves taking on some risk, but it also has the potential to earn higher returns over the long term.

“[It] allows you to gain [additional money] and be confident in knowing that although you’d earn and your income may be fixed, that isn’t limited to your overall earning potential.”

But in order to see that benefit it takes some time, and according to Pinnock, there are some individuals that are desiring to go into an investment that might not necessarily be suited for them or may not be aligned with their goals. While acknowledging that sometimes a situation may arise where people cash in investments early, she encouraged investors to put a plan in place to take care of short-term liquidity needs that would result in fewer drawdowns from the investment for purposes other than the original goals.

“If you invest and it gives you interest every six months and you really want interest every three months, don’t do it, because if you’re going to encash every three months then you may end up being in a problem where you reduce the amount that you can actually earn interest on.”

“If you have a solid plan in place, in expectation of what your returns will be, and understanding that the financial market may fluctuate, then you should be okay.”

She recommends investors do continuous periodic review of their investments to minimise losses rather than “buy and hold or set it and forget it”.

Ideally, Pinnock recommends people opening an investment account to take the time to learn about investment including from various investor education forums.

“A lot of information is out there. It’s about finding the one that works for you and also knowing what level of interest and time you have to dedicate to it… if you don’t have the time, get a licensed advisor to tell you what to do.”