move! act now!

"nothing happens unless something moves."

at long last, i made an appointment with an agent from a mutual fund company. we will meet on sunday afternoon to discuss the details on how we can invest in their stock or equity funds.

why mutual funds?

because mutual funds are managed by professional money managers. by owning shares in a mutual fund instead of buying individual stocks or bonds directly, my investment risk is spread out.

stock or equity funds

stocks funds are considered risker than bond funds (although certain bond funds can be very risky) and are used for growing your money. money market funds and bond funds typically provide returns just a percentage or two above inflation, but stock funds should do much better over long periods of time.

inflation fighter

for the Philippine investor, inflation is a particularly serious challenge since the Philippines has a high inflationary environment. it's worth noting, though, that the average historical rate of return of the Philippine market in the past ten years largely outpaced the inflation averaging in the double-digits.

that being the case, your savings need to grow at a rate that will outpace inflation. otherwise, you will be losing valuable purchasing power from the capital that you've worked so hard to accumulate. investing in stocks of publicly traded corporations through the stocks or equity fund can provide you with built-in protection against the erosion of your savings over the long-term.

long term investment

when you invest in a mutual fund, you are investing in a diversified portfolio of securities that normally fluctuate in value. to obtain the best results, they should generally be regarded as long-term investments which means they should be held for seven years or more.

the securities markets in which mutual funds invest tend to rise and fall over the short-term, as well as the value of your investment. your ability to withstand short-term volatility, especially on the down-side, will generally result in greater returns over the long-term. when the value of your investment decreases, and it will from time to time, be patient.

that is why this kind of investment is very suitable for my retirement fund. but since i also up to capital gains, i'm still investing in stocks through online trading. this may take sometimes but i promise that this month will not last that i will put my hard-earned money to work for me.

Think Rich, Pinoy! Millionaires Club

we'll be having our second meeting for our group in TRPMC Makati Club tomorrow. though i haven't look for a possible property for our project (as our individual assignment), i think we have so much in the agenda that we could handle other tedious things like this.

looking for a good foreclosed property in banks is so time consuming and very frustrating. it's not enough to look through the list, you still need to see it for yourself if the property is worth buying.

next time i will share to you the things you should consider in buying a property. have a good time!

mutual funds & online trading

up to now, i haven't invested yet to stock market or mutual fund. gee, its been a week since my first post this year and still i haven't done anything. i was struck by "analysis paralysis".

though i already made up my mind on what mutual fund company and agent should i put my hard-earned money into, i still yet to contact them.

mutual funds

there are several types of mutual funds in the Philippines. the common types are:

1. stock or equity funds - invest in shares of stock of Philippine corporations listed in the Philippine Stock Exchange (PSE). equity funds offer the highest possibility of growth among all mutual fund types, but they also have a corresponding high amount of risk.

2. bond funds - invest primarily in fixed-income securities such as bonds or treasury notes issued by the Philippine government and commercial papers issued by reputable Philippine companies. since these bonds are normally guaranteed, the possibility of loss is very low. investing in bond funds provide capital preservation while maintaining conservative asset growth.

3. balanced funds - is a mixture of equity and bond funds. the high potential growth of equity investments is tempered by the conservative growth of fixed-income securities. obviously, the return of a balanced fund is normally somewhere between the return of an equity fund and a bond fund.

4. money market funds - are similar to bond funds because they also invest in fixed-income securities and the growth of the fund is conservative. the main difference lies, however, in the term of money market fund investments, which is usually short-term such as one year or less.

i'm very optimistic this year so i will choose to invest in equity funds.

online trading

because of the technology and the internet people can now make orders online and put them in control on when to sell or buy stocks. you don't have to wait for your broker to take your orders over the phone. just trade stocks right at your fingertips. all you need to do is to check the facilities, terms and requirements. as of now i'm still weighing my options between two brokers.

five factors to consider in choosing an online stock broker

1. commissions. online brokers or even the conventional brokers charge a fee each time you buy and sell. but most online brokers charge lower commission rates than live brokers. obviously you want the lowest commission rate which is 0.25%. this is the lowest allowable commission rate set by the PSE.

2. minimum initial deposit. you should check the online broker's minimum initial deposit. as a newbie, you want to get your feet wet with as little money as you can afford to play with. there are online brokers that require P5,000 only. you should also check the minimum account balance as well as the penalty for going below this level.

3. features. DIY or do it yourself, is the main attraction of online stock trading and investing. of course, you want to have all the tools necessary to make the best decision to buy or sell. you need to take a look at the range of services they offer in terms of research, their online tools and functionalities and other products which can enhance your trading experience. look for streaming charts and data, real-time stock quotes, financial news, analytical tools, and research reports. other offers margin financing, allowing you to leverage returns through a flexible and convenient trading line at competitive rates.

4. ease of use. you can have the lowest commission and all the tools you want but if the user interface, site availability, and speed of page loading suck, then you're in for a terrible experience. ask for a demo account to see if you like how smoothly the entire process goes before you commit.

5. customer support. you would also feel much better if your online broker will pick up the phone immediately and quickly responding to your queries and complaints as needed. so get the best customer service possible.

now, i have to act as quickly as possible and invest my money before it disappears on thin air.

happy investing!