Ms Carolyn Hall, managing director of Gulf Stream Securities Ltd., gave The Royal Gazette some insight into the mind-set of such an investor.

Ms. Hall has tens of millions of dollars under asset management. She was trained by Merrill Lynch, and served as a stockbroker and investment consultant.

The first thing she determines from prospective investors is what they want from their investment. Is it for retirement savings, their children's college fund or saving for a home? Are they simply trying to affect growth? The next question deals with their tolerance to risk. All investments mean some form of risk. The higher the projected return, the greater the risk. She asks prospects if they would be upset if they lost a dollar through an investment. Not everyone can keep it together when their investment loses and sometimes the value can ride like a rollercoaster.

Ms Hall says that Bermudians, much like Canadians, are more risk averse (or have less tolerance to risk) than Americans or Asians. Europeans, she feels, may be bigger risk-takers than the British.

All of this is important to consider. She provided this example: "Before you buy into a futures fund, you have to decide whether or not you are the type of person who is willing to lose it all. There is exposure to stock fluctuations and there is exposure to currency risks.'' Consider currencies. She would be bullish on US or Canadian dollars (She would buy, and probably hold onto such currencies). On the other hand, she is bearish on Yen and Sterling (she'd sell these currencies).

"You have to consider the time frames for investment and your goals. An economic cycle is three to seven years. You have to be prepared to stick it out. I would put no-one in equities, for example, unless they were going to be there for at least five years. The markets always trend upwards over time.

They never move in smooth lines. It's a jagged edged sword, trending upwards.

"You might be buying into a market, just as it is going down. You've got to be able to stay and hang in there. It's just like the local hotel industry, construction industry or tourism industry.They all have their cycles. Many stocks are cyclical.'' Key questions an investor should ask an advisor are: How many years have you been investing in overseas markets? How much in total assets are you managing? have you managed more in the past? What is your performance history and can it be independently verified? Ms Hall adds that history is no guarantee of future performance, but it is generally your best guess.

Ms Carolyn Hall.