Tax-free investment on Stock Exchange

Tremendous investment opportunities exist at the Stock Exchange for citizens to make good returns, or even to get rich. But somehow, this bonanza remains largely unused and generally unknown so that those who should benefit the most never access the Trinidad and Tobago Stock Exchange.

Fact is, profitable investment is available to everyone, so people from all walks of life, can find investment opportunities in the Stock Exchange, and they would be surprised to discover that not much capital is required. One can begin by building a small portfolio of stocks with as little as $500. For instance, there are very respectable securities that can be accessed with small investments. Angostura Holdings Limited is quoted in the region of $4.90 which means that 10 shares cost just $49.00.  Berger is listed at $3.00. National Flour Mills at $3.00 and Prestige Holdings (okay, KFC) is trading around $4.15. Ten shares of each is well within the reach of just about everyone.

Further, a random sampling of opinions shows that the average Joe and Joan do not know that the earnings or the money made in selling shares is entirely tax free! Imagine an amazing sweetener such as that, is largely unknown and not enjoyed. Pity! By way of illustration, if an individual purchases $3,000 worth of shares, and then sells for $4,000 the entire sum including the profit of $1,000 is retained by the individual, and no tax is paid on it. This is because successive governments have seen the wisdom in having no capital gains taxes in this country on the sale of shares. It is the State’s way of encouraging citizens to invest in the wealth of this country, and benefit from it. As it turns out, there are many private citizens and companies that have doubled and tripled their dollars on the Stock Exchange. If they have done it, why not others? The answer has everything to do with knowing what’s available and what needs doing. It’s like taxation — there are dozens of legal ways of paying what is required, and avoiding paying what is not required. Oftentimes, it takes an expert or experience, sometimes of a painful nature, to know how to fill out a tax form without incurring unnecessary charges or penalties. The same thing applies to the purchasing of shares in companies. At this stage of our existence, the Stock Market remains largely an unexplored area familiar only to the initiated and the experts, and this ought not to be the case. But because trading on the Stock Exchange is an unknown factor it does not mean it should remain feared and untouched. The first step is an easy one. Simply open your telephone directory in the Yellow Pages section and look under “Stock and Bond Brokers.”

The next step is to choose a broking house that is a member firm of the Exchange, and has a duly registered and licensed stockbroker. The brokers are skilled, reputable persons and will advise on what stocks to buy. The broker will offer guidance on how much a stock can reasonably be expected to advance over a period of time so that purchasing can be tailored into an investment programme. The brokers will also caution about rushing in where sane investment ought not to go. The Stock Market is not a fixed vehicle. Like life itself, it has its ups and downs and just as assuredly as there have been winners, there have also been losers. What is comforting about the Stock Exchange is that even when there have been declines, nearly always these stocks have come back after a period of time. Everyone remembers when a share in Republic Bank went down to $1.20. That was some 20 years ago. People who had bought at $7 or more, cried and wailed as they watched their investment virtually vanish. Many decided to cut their losses and sell. A few held on. Others decided that it was just jolly to buy when the value of the shares had fallen to such a low level. These people smiled all the way to the bank, so to speak, when Republic Bank rose and rose and some purchasers were able to sell their $1.20 shares for over $40. This represented a profit of several hundred percentages! The brokers will advise new investors on how to tread carefully and successfully in the Stock Exchange. They will be the first to tell you that you should NOT put all your eggs in one basket. A portfolio should include other buttresses including where possible, insurances, real estate, units in the Unit Trust, and cash in the bank bearing in mind that a savings account is not considered a true investment but rather, an emergency fund because the interest earned   is generally eroded by inflation over a period of time. A certain discretionary percentage is then earmarked. This can be invested in the stock exchange. But take that first step and go in and have a chat with the stock broker of your choice ... and watch your life start climbing to success!