How to invest in the local stock market

Happy Labour Day everyone! Today’s topic is going to be an interesting one. We are going to talk about what you need to know to get started with investing in Trinidad and Tobago. I did a lot of trial and error to figure this out during the pandemic and now I’m going to present what I learned to you. Something to keep in mind is that investing is not a get-rich-quick scheme. It’s slow and takes time. From my experience, the more money you have available to trade the more you can benefit—earning %2 on $1000 invested will only net you $20 but %2 of $100,000 will get you $2,000. But remember, do not invest what you’re not willing to lose. I’m going to cover how to register and set up your accounts, how to choose a stock and how to place a trade.

Get registered and set up your accounts. You will need a Trinidad and Tobago Stock Exchange Trading account, a Trinidad and Tobago Central Depository account and a bank account with a licensed broker. First, you need to register a TTSE online trading platform account, TOP. Registration | Trinidad and Tobago Stock Exchange Trading Application. Next, you need to set up a TTCD account. Linked here: Registration | Trinidad and Tobago Central Depository (stockex.co.tt)

According to TTSE’s website, there are currently eight (8) licensed brokerage firms or stockbrokers operating within Trinidad and Tobago. Linked here is a list of them. Equities, Mutual Funds and Corporate Bonds - TTSE (stockex.co.tt). Generally, most stockbrokers require a minimum of $2,000 as a start for investing in stocks and of course, you will need your standard documents for opening a bank account in this country. I tried two of them and decided to stick with WISE. Call one of these brokers and ask how to get started.

Choosing a stock. A security in this case is the company stock. When researching start broad and then narrow it down. Go to the TTSE website and check under the Listed Securities tab. Listed Securities (stockex.co.tt) The most popular listed securities include Massy, JMMBGL, NFM, and Angostura (AHL). Some of these, such as Massy, pay dividends while others can be undervalued or overvalued.

Clicking on a security will show you more information such as

• A chart
• The value of the stock
• Corporate actions
• The value change of the stock as of the opening and close of the market
• News

When looking at the chart what I tend to do is zoom out as far it will allow. This will give me a general overview of the company. I want to know if the company is growing, shrinking or stagnant.

On the TTSE website be sure to go through the annual reports and financial statements for the quarter under the newsroom tab. This will inform you of any issues or promises of growth with the security. A graph on a 3-month interval can look like it’s going up, but on a 1-year or year-to-date (YTD) it can tell you that the company’s stock has been in free fall for a number of years. It is also good to rely on the news to make your decision.

Make your trade. There are 2 main ways to make a trade. By phone call or through TOP (TTSE Online Trading platform). When I started TOP was new and not well advertised. I was told by my first broker to make the call over the phone, I thought that was so archaic and strange. Eventually, I found out about TOP. When signing into TOP, click on trade>place order. You will be asked to fill out some information. You need to select your TTCD and Broker account, your action, the number of shares you wish to purchase ( a neat shares calculator is there in red to help), the share price you wish to enter and the expiry date (how long you want to trade to be valid for if the order is not filled).

I’m going to try to be as simple as I can here. Basically, you have a few options for how you want to set your purchase price.

• You can set your purchase at the current market price for an increased chance for the order to be filled and enter the market right away.
• You can set your purchase price slightly above the market price to protect yourself if the market continues downward.
• You can set your purchase price slightly below market price if you think the market is overvalued but you want to buy it at a lower price to maximise profit.

The choice is up to you. In long-term investments, however, those last two points do not matter as much. This is called timing the market.

To place an order to sell is straightforward as well. Go to the same panel and set the price and volume you wish to sell your shares. Keep in mind the time for funds to settle can take a while. Expect a call from your broker to come in to collect a cheque.

Follow these steps and you’ll be on your way. Set up your accounts, research the market and place your trade. Good luck!