Randolph Somerville is the vice president of the Investment Services Group of First Bermuda Securities. He has been with the company since 1991.

Recently he sat with The Royal Gazette <$>and explained how investments can work to anyone’s advantage.

“There are two types of investments which people can put their money in, local and overseas. Local investments mean that the companies are Bermuda-dollar companies, not just Bermuda-based,” he said.

“In my opinion, these investments have been greatly under-utilised. Bermuda companies, over the last 20 years, have performed quite well.”

He continued: “Ironically, we get calls from overseas people who want to invest in local companies which they find attractive yet many locals want to invest in overseas companies.”

But why?

“Because they do not see Bermuda-dollar companies on the international business channels,” Mr. Somerville responded.

Alternatively, when clients want to invest in overseas companies, their local funds are converted into the currency of the interested company.

Mr. Somerville pointed out while there are different companies to buy stocks in; most opt to invest in America, the largest market in the world.

Earnings drive returns on investments, he explained: “As long as a company does well financially, shareholders will receive dividends, hence they will see their money grow.”

“That is the motivation behind investing. You believe that the company is going to improve its performance and make more money. “First Bermuda Securities can facilitate anyone who wants to buy shares in an overseas company.”

For those who are interested in investing their funds but not quite sure where to begin, Mr. Somerville recommended that they initially invest in the local market, or if they want international exposure, to utilise a mutual fund.

“Mutual funds are professionally managed and are very diversified. I think it would be the easiest and best route for the first time investor,” he said.

Mr. Somerville suggested that a new investor should start with a $2,500 nest egg, which will enable them to track investment results a bit easier.

He added clients handled their accounts differently<\m>some choose to move their funds around while others just let them sit and grow.

“I also recommend that people add to their investments at least half-yearly.”

And when is the likelihood that investors will cash in on their profits, The Royal Gazette <$>queried?

“Investments are supposed to be long term and should sit there until you really need it,” Mr. Somerville said. “People usually invest so that they can save for education, early retirement or long term saving for a house.”