Investing in times of uncertainty

WITH global markets facing continued volatility, investment professionals are urging Jamaicans to take a more strategic and diversified approach to building their portfolios.

Maurice Wright, chief investment officer at Cumax Wealth Management, noted that Jamaica’s financial institutions have weathered crises before — from the 1990s financial sector meltdown to the 2008 global crisis and, more recently, the COVID-19 pandemic — and the strategy proven to work is portfolio diversification.

“Now, what is a portfolio? Simply defined, as your grandmother would have said to you, ‘Don’t put your eggs in one basket.’ So, therefore, what you want to do is to have a collection of assets,” Wright explained during Cumax’s Spring Investment Forum held at Terra Nova All-Suite Hotel in St Andrew last week.

He encouraged investors to take a disciplined, long-term approach to wealth-building. Diversification, he added, goes beyond stocks and bonds and should include exposure across sectors, industries, companies, and regions.

He suggested the Canadian market, saying that it “is even more diverse”.

Another key aspect of diversification, he noted, is spreading risk, not just across asset types but also across sectors, industries, and individual companies. Holding a large portion of your equity portfolio in a single stock — even one that’s performing well — can expose you to unnecessary risk. Instead, he encourages investors to spread their holdings broadly. The goal, as Wright puts it, is to build “portfolios within your portfolio”, an approach that allows you to manage volatility and position for long-term wealth in today’s uncertain environment.

“I’d like to tell you that, for one thing, this too shall pass,” he said confidently. “It’s always a good time to invest.”

In addressing market fears and anxieties, Herbert Hall, CEO of Cumax, shared a personal anecdote from his previous role at another institution. “We were about to launch an IPO within the COVID environment and somebody looked at me and said, ‘Boy, Herbie, you’re mad.’ I said, ‘Listen, guys, there was life before COVID, there was life during COVID, and there’ll be life after COVID.’ ”

Hall used the example to illustrate the importance of staying the course even now in global uncertainties.

“What you need to do is have a plan and stick to the plan. Be diligent about investing and ensure that you are of faith with all the data that is relevant to what you’re doing,” he said.

Despite current uncertainties, Hall remains optimistic about Jamaica’s investment outlook. He highlighted emerging opportunities in digital securities — a space he believes can provide significant diversification benefits. Through the Jamaica Stock Exchange’s collaboration with Canadian fintech firm Blockstation, investors can gain access to global digital assets beyond traditional instruments. While Hall did not reveal specific plans, he confirmed that the potential in this area is being closely considered for future investment strategies.

Denise Marshall Miller, assistant vice-president of global markets and digital asset trading at VM Investments, explained that recent developments in the United States have led to significant volatility in global markets. US stock indices tumbled, Treasury yields rose, and investors moved away from equities, seeking refuge in commodities like gold and foreign currencies.

“You saw where the Canadian currency, the euro, and the yen all strengthened against the US dollar. So that just shows that investors are saying, ‘I don’t have that confidence in the US, so I’m looking for other alternatives,” Marshall Miller told the Jamaica Observer.

She explained that this behaviour points to a broader loss of investor confidence in US economic leadership. While these events may seem distant, Marshall Miller stressed that the ripple effects are very real for Jamaica. If inflation continues to rise in the US, the Federal Reserve may keep interest rates elevated longer than expected. That could influence the Bank of Jamaica’s own interest rate decisions, potentially stalling local rate cuts that had been anticipated.

“If inflation in the US spikes, our imports become more expensive and our cost of living rises, and the Central Bank may be forced to delay rate cuts,” she said.

This could weaken consumer spending, discourage private sector investment, and reduce investor appetite for local stocks. At the same time, prolonged uncertainty in the US could also dampen tourism and remittance flows, which are two vital revenue streams for Jamaica’s economy. Her recommendation to Jamaican investors is to monitor key indicators like inflation trends, interest rate movements, credit spreads, and macroeconomic signals from both the US Federal Reserve and the Bank of Jamaica and to be cautious against reactionary decision-making. Instead, she advises remaining alert, seeking professional guidance, and in an environment like this, taking a calculated approach based on economic data and not emotion.

“It’s not just about, ‘I’ve seen a particular stock drop 20 per cent; I’m just going to buy it.’ You need to assess if the stock is really revaluing. You need to check what the impact of these tariffs, et cetera, could have on this company’s bottom line to decide how you go forward,” she warned.

Volatility, however, is not the enemy. Marshall Miller acknowledged that although periods of uncertainty can be unsettling, they also present valuable investment opportunities if approached with strategy and clarity. Rather than remaining inactive, her advice is to assess market conditions carefully, understand your objectives, and act based on sound judgement.

“Don’t only think on the negative side,” she told Sunday Finance, adding that global market shifts are driving prices down, creating an opportunity for investors to buy into major brands that were previously considered overvalued.

WRIGHT… I’d like to tell you that, for one thing, this too shall pass. It’s always a good time to invest.