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Behavior, risks of investing in the Jamaica stock market

Using information from Morgan Stanley Capital International and other sources, answer the following questions:

1. How has the stock market in Jamaica done over the last five years?

2. How risky do you think Jamaica's stock market is?

3. Would you personally invest in Jamaica's stock market? Would you combine an investment in that stock market with an investment portfolio that contains mostly US securities? Do you see any advantages for such a 'design' of the portfolio?

Assignment Expectations:

A well-written paper detailing the behavior and risks of investing in the stock market in Jamaica

Solution Preview

International equity markets

Jamaica stock exchange performance

The Jamaican Stock Exchange performance can be determined by the trading statistics, the volume traded the traded value and the number of transactions. During the year 2008, JSE index decreased by 25.76%, the all Jamaican composite Index also declined by 30% and the JSE Select index declined by 32.24%. Walker et al (2011) provides that by the month of May in 2011, the JSE Main index declined by 132.42 points amounting to 0.15%, the Composite index also declined by 0.l24% (217.83 points), while the JSE select index declined by 11.57 points accounting for 0.47% decrease trading carried out at the JSE market is estimated to be $ 30 billion . The Jamaica Stock Exchange has low volume of securities compared to other major stock markets such as the New York Stock Exchange. The JSE market trades an average of 50,000 daily while trading in NYSE involves over a billion securities. The value of trade in 2008, the ...

Solution Summary

Behavior and the risks of investing in the Jamaica stock market are examined.