Investing in the U.S & Jamaica Stock Market for Beginners

A unit trust fund is a collective investment instrument, which allows investors with similar investment objectives to pool their money into a fund.

The particular fund will then be invested into a portfolio of assets such as stocks, bonds and other securities.

Unit trust fund typically involves three parties investors who invest into the Fund. A trustee which safeguards the assets of the fund and a unit trust management company, which manages and invests the pooled funds into authorized investments and portfolios.

A mutual fund is a type of investment vehicle where the money collected from various investors is pooled together to invest in different assets including bonds, stocks, and/or money market investments. Mutual funds are professionally managed by Fund Managers, who allocate the fund's assets and attempt to produce returns for investors. Sounds similar to unit trust right? They differ in terms of Fees, and Portfolio Management.

An index fund is a basket of investments — usually stocks or bonds — that tracks the performance of a specific sector or market. Because the investments in an index fund are picked for you, index funds can be a relatively simple and convenient way to invest in the stock market.

An Exchange Traded Fund or ETF is an investment fund that trades like a stock. ETFs, like other types of funds, pull together money from investors into a basket of different investments, including: stocks, bonds, and other securities.

A REITS is a real estate investment trust, when you invest in a REIT, you are investing in a company that is investing into real estate investment properties. Unlike crowdfunded investments you can invest in REITs on a stock market.

You can buy and sell REIT whenever you want. However by the U.S definition of REITs there are no REITs on the Jamaica Stock Market but there are companies like KPREIT that invest primarily in Real Estate. To be classified as a REIT a company must meet the following criteria:

• invest at least 75% of total assets in real estate, cash, or U.S. Treasuries

• Derive at least 75% of gross income from rents, interest on mortgages that finance real property, or real estate sales

• Pay a minimum of 90% of taxable income in the form of shareholder dividends each year

• Be an entity that's taxable as a corporation

• be managed by a board of directors or trustees

• Have at least 100 shareholders after its first year of existence

• Have no more than 50% of its shares held by five or fewer individuals

A bond is simply a loan given to a company or government by an investor. By issuing a bond, a company or government borrows money from investors who in return are paid interest on the money they've loaned. Companies and governments issue bonds frequently to fund new projects or ongoing expenses. Some investors use bonds in hopes of preserving the money they have while also generating additional income.

A certificate of deposit (CD) is a savings account that holds a fixed amount of money for a fixed period of time, such as six months, one year, or five years, and in exchange, the issuing bank pays interest. When you cash in or redeem your CD, you receive the money you originally invested plus any interest. Certificates of deposit are considered to be one of the safest savings options.

Basis of allotment calculator

The P/E ratio compares a company’s share price to its profits (per share.) You can also think of the P/E ratio as the price you’ll pay for $1 of a company’s earnings (or profits.) So, if a company’s P/E ratio is 20, you are paying $20 for $1 of profit per share.

To open an account with the following documents are typically required for the adult:

• One (1) piece of valid identification (Driver’s License or Passport or National ID/Resident/Citizenship Card + Birth/Adoption Certificate).

• The name and telephone number of two (2) References. Please note that relatives or joint account holders may not provide references and any of the following below can be used:

a. Justice of Peace

b. Medical Doctor

c. Attorney at Law including Parish Judge, Judge and Chief Justice

d. Chartered Accountant

e. Current Employer

f. Police at or above the rank of Inspector

g. Army Officer at or above the level of Major

h. Minister of Religion

i. Principal (if the institution is registered as such with the Ministry of Education

• Tax Registration Number – required for all Jamaican clients over the age of 18 years.

• National Reference Number - for all non-Jamaican clients e.g. Social Security or Taxpayer Identification Number for citizens of the United States.

• Proof of Residential Address – required for each client on the account. Must have your name, your address, and must not be older than 3 months.

• Source of Funds information – source of funds being used to open the account as well as (projected) source of future investments or deposits. Proof of income is not required.

Minors:

1. Birth certificate

2. One (1) piece of valid identification (Passport, Driver’s License, Resident or Citizenship Card).

3. Notarized Picture (where a valid picture identification is not available).

4. TRN (required when being added to specific accounts).

5. Letter from parent or legal guardian authorizing the opening of an account with a minor where they are not accompanying the minor.

For proof of residential address, they may submit either of the following listed below:

• Current utility bill (electricity, telephone, water, cable, post-paid mobile phone bill) no more than three (3) months old. Please note that the service address on the utility bill is to correspond with the address indicated as your residential address.

• Current credit card or bank statement (no more than 3 months old).

• Letter from Government agency showing residential address. This must not be more than three (3) months old.

• Government property tax receipt duly stamped by the Tax Collectorate. This must not be more than three (3) months old.

• Postmarked envelope showing your current permanent address. This must not be more than three (3) months old.