Uploaded April 2020 | Updated September 2026, 3 days ago
Last year early 2019 the JSE was declared the best performing stock exchange for 2018 and I know a lot of persons decided that this was a very good time to start investing. Now fast forward a year later the main index is down 33% in the first quarter of 2020 with 29% of that happening in March alone. There are now talks of a global recession and investors are cashing out and running for the hills. What do you do? If we look at this from a very simple point of view nothing lasts forever. The markets are currently falling they will have to stop at some point. The great depression of 1930’s saw global GDP falling by over 25% and this ended by the late 1930’s. the economic recession of 2008 ended with the longest bull market where investors made a killing.
Now to navigate this downturn as a new investor we need to be patient and level-headed. When transjam opened I read an article where a broker didn’t want to sell for a client at $1 because he bought it for 1.41 in the IPO but he was comfortable selling as his portfolio could absorb the loss. Let me put this into perspective for you if you bought 100k trans jam at 1.41 in the IPO you would have spent $141k now to sell at $1 you just lost $41K just like that. Now we can see how this will snowball depending on how much we had decided to buy on the IPO.
The problem with transjam from my perspective is that most persons went in with the intention of making a quick profit when it listed. Now with how the JSE has been going on this seemed like a solid plan. When you check the que for the Jamaican dollar side of transjam at the time of this recording you have over 581 sell orders with 86 buy orders. This is a buyers’ market they have the power. And with the persons holding the shares panicking they have been driving the prices down.
Personally, I think warren buffet was onto something when he said “we simply attempt to be fearful when others are greedy and to be greedy when others are fearful” for me this perfectly sums up my mindset with this downturn in the market. Now with the main market down 33% I have also seen a 30% drop in my portfolio between January and March. You have two options 1 do nothing and hope the market recovers quickly or 2 double down. For me I keep a manual track of all the stock in my portfolio because I am very big on data as there are things that the generic trackers which our brokers provide don’t provide, that I want to know about my portfolio.
Ok so back to my portfolio When I noticed that my portfolio dropped 30% in 2 month I decided to SELL. Just kidding. Now with 30% of my portfolio just disappearing poof you think I would be frantic right about now, but I am not. My first thought was how to capitalise on this drop in the market. So, I opened my portfolio tracker and started to do the math. Now I have stock that I bought that are now cheaper. This is when it hit me why not reduce my average price. Now when you are buying stocks you will pay a price for the stock but there are also charges associated with the purchase of these shares namely broker fees and stock exchange fees. What this means is if you paid $10 for a stock you may notice your average price per share is $10.1 because of the charges.
Now by lowering my avg price, when the market rebounds, I stand to make better gains when I eventually decide to sell. The process I used to decide where to invest more wasn’t random as I need to find the stock where I get the most bang for my buck. First thing I did was to set a spending limit now with this limit I want to have at least a 20% reduction in my avg price. By doing this I found 4 companies that gave me between 20 and 38% reduction without breaching my spending limits. Now these companies are ones that I believe in and based on my analysis I stand to gain more than I spend in the short to medium term. When investing in the stock market I believe in keeping a stock for at least 1 year before selling so increasing my holding is inline with my overall strategy.
Is my decision to double down the correct one? Let me know what you think in the comments below.
So, in essence, what I’m trying to bring across to you is don’t be too quick to sell off your stocks. The Jamaican stock market has proven time and again to be very resilient, companies have to build strategies to combat these kinds of occurrences, and so remaining steadfast and analysing the movements in the economy just may allow for your investments to become even more profitable in the short to medium term.
Disclaimer: This is my personal opinion on the movement of the stock markets. For more in-depth and specific information speak to a licensed investment advisor.
Last year early 2019 the JSE was declared the best performing stock exchange for 2018 and I know a lot of persons decided that this was a very good time to start investing. Now fast forward a year later the main index is down 33% in the first quarter of 2020 with 29% of that happening in March alone. There are now talks of a global recession and investors are cashing out and running for the hills. What do you do? If we look at this from a very simple point of view nothing lasts forever. The markets are currently falling they will have to stop at some point. The great depression of 1930’s saw global GDP falling by over 25% and this ended by the late 1930’s. the economic recession of 2008 ended with the longest bull market where investors made a killing.
Now to navigate this downturn as a new investor we need to be patient and level-headed. When transjam opened I read an article where a broker didn’t want to sell for a client at $1 because he bought it for 1.41 in the IPO but he was comfortable selling as his portfolio could absorb the loss. Let me put this into perspective for you if you bought 100k trans jam at 1.41 in the IPO you would have spent $141k now to sell at $1 you just lost $41K just like that. Now we can see how this will snowball depending on how much we had decided to buy on the IPO.
The problem with transjam from my perspective is that most persons went in with the intention of making a quick profit when it listed. Now with how the JSE has been going on this seemed like a solid plan. When you check the que for the Jamaican dollar side of transjam at the time of this recording you have over 581 sell orders with 86 buy orders. This is a buyers’ market they have the power. And with the persons holding the shares panicking they have been driving the prices down.
Personally, I think warren buffet was onto something when he said “we simply attempt to be fearful when others are greedy and to be greedy when others are fearful” for me this perfectly sums up my mindset with this downturn in the market. Now with the main market down 33% I have also seen a 30% drop in my portfolio between January and March. You have two options 1 do nothing and hope the market recovers quickly or 2 double down. For me I keep a manual track of all the stock in my portfolio because I am very big on data as there are things that the generic trackers which our brokers provide don’t provide, that I want to know about my portfolio.
Ok so back to my portfolio When I noticed that my portfolio dropped 30% in 2 month I decided to SELL. Just kidding. Now with 30% of my portfolio just disappearing poof you think I would be frantic right about now, but I am not. My first thought was how to capitalise on this drop in the market. So, I opened my portfolio tracker and started to do the math. Now I have stock that I bought that are now cheaper. This is when it hit me why not reduce my average price. Now when you are buying stocks you will pay a price for the stock but there are also charges associated with the purchase of these shares namely broker fees and stock exchange fees. What this means is if you paid $10 for a stock you may notice your average price per share is $10.1 because of the charges.
Now by lowering my avg price, when the market rebounds, I stand to make better gains when I eventually decide to sell. The process I used to decide where to invest more wasn’t random as I need to find the stock where I get the most bang for my buck. First thing I did was to set a spending limit now with this limit I want to have at least a 20% reduction in my avg price. By doing this I found 4 companies that gave me between 20 and 38% reduction without breaching my spending limits. Now these companies are ones that I believe in and based on my analysis I stand to gain more than I spend in the short to medium term. When investing in the stock market I believe in keeping a stock for at least 1 year before selling so increasing my holding is inline with my overall strategy.
Is my decision to double down the correct one? Let me know what you think in the comments below.
So, in essence, what I’m trying to bring across to you is don’t be too quick to sell off your stocks. The Jamaican stock market has proven time and again to be very resilient, companies have to build strategies to combat these kinds of occurrences, and so remaining steadfast and analysing the movements in the economy just may allow for your investments to become even more profitable in the short to medium term.
Disclaimer: This is my personal opinion on the movement of the stock markets. For more in-depth and specific information speak to a licensed investment advisor.
