I am a newbie with respect to investment. When I say investment, I refer to the legitimate types available through banks, financial firms, and the stock market. So far I have only been familiar with savings and time deposits, insurance/pre-need plans, cooperatives, and just last year UITF's (which are quite similar to mutual funds). I've had a bit of experience with stocks through my past employer, Intel, which of course offers stock options and discounted stock purchase plans.
Now why am I starting to take an interest in knowing more about investment options? Because 1st of all interest rates for savings and time deposits from banks are getting smaller and smaller such that it is almost non-existent. Insurance and pre-need plans are ok but they are usually just set aside for future specific use. Membership to cooperatives is one good alternative as it not only allows you to save but also allows you to borrow in case you need money among other benefits. However, share capital in a cooperative is not something you can liquidate throughout your membership (unless you're planning to withdraw membership which I do not plan to do). Savings account interest here is also higher than banks but they're not enough to
battle inflation. When I got a bit of experience buying and selling our company stocks, the rate of return was good. And it inspired me to learn more how to take advantage of these opportunities.
As a beginner with respect to stock investment, I canvassed for quite a while what are good possible investment prospects in terms of mutual funds and UITFs. These were my only initial considerations as these are handled by experienced fund managers and I wanted to test the water first. I read a lot of feedback from forums discussing which are the best performing and differences with respect to minimum placement, holding period, fees etc. In the end, I opted for BDO Balanced Fund. I started out with the minimum P10k first.
I chose BDO balanced fund because 1st of all BDO is a very accessible bank. It is located in any SM mall and therefore there is always an open branch during weekends or after office hours. Basically I had factored in its accessibility. Secondly, it is affordable aside from its Fixed Income Fund which also has a minimum placement of P10k. Thirdly, I checked their portfolio and past performance. I saw that from its inception it has been on a continuous uptrend. And since it has a mix of stocks and fixed income securities in it, there's a higher rate of return but with some volatility.
That was in August 2007. I checked the NAVPU (Net Asset Value per Unit, while for mutual fund it's per share) daily which changes up or down ranging from a few pesos to a hundred. I was happy that in general the rate increases up to a point that it reached an all-time high in October that I decided to cash it in. My first attempt in UITF gave me a return of 18% in less than 2 months. I just realized I should have put in more money. But it was beginner's luck.
In December, I decided to invest again now that the rate went down by a few hundred pesos. The next month it went down again but I continued to invest. The same thing happened in the succeeding months, with the rate going down and I continuing to invest. My philosophy was the general direction it will go is only UP in the long term. And I incorporated what some investors say as cost averaging, which is continuously investing in order to absorb the changes and averaging over the long-term your investment. However, up to now, the rate is still going down. As a precaution, I invested partly on Fixed Income Fund (which is more conservative than the Balanced Fund) in order to preserve my capital more due to higher risk in the Balanced Fund. But both of them are going down although not at the same rate.
I stopped my continuous monthly investment last month. I want to wait it out first until the market changes course. I am planning to analyze the fund performance based on the Technical Analysis training I attended and assess whether it is time for me to pull it out or just hold. Unfortunately, the website where I can access the charts currently doesn't work. O well, I just need to look for a way to improvise.
While the current economy is not the best time to invest, I am now starting to learn what I can about investments particularly the stock market so that I am prepared to take action when the right indicators/opportunity comes.
Now why am I starting to take an interest in knowing more about investment options? Because 1st of all interest rates for savings and time deposits from banks are getting smaller and smaller such that it is almost non-existent. Insurance and pre-need plans are ok but they are usually just set aside for future specific use. Membership to cooperatives is one good alternative as it not only allows you to save but also allows you to borrow in case you need money among other benefits. However, share capital in a cooperative is not something you can liquidate throughout your membership (unless you're planning to withdraw membership which I do not plan to do). Savings account interest here is also higher than banks but they're not enough to
battle inflation. When I got a bit of experience buying and selling our company stocks, the rate of return was good. And it inspired me to learn more how to take advantage of these opportunities.
As a beginner with respect to stock investment, I canvassed for quite a while what are good possible investment prospects in terms of mutual funds and UITFs. These were my only initial considerations as these are handled by experienced fund managers and I wanted to test the water first. I read a lot of feedback from forums discussing which are the best performing and differences with respect to minimum placement, holding period, fees etc. In the end, I opted for BDO Balanced Fund. I started out with the minimum P10k first.
I chose BDO balanced fund because 1st of all BDO is a very accessible bank. It is located in any SM mall and therefore there is always an open branch during weekends or after office hours. Basically I had factored in its accessibility. Secondly, it is affordable aside from its Fixed Income Fund which also has a minimum placement of P10k. Thirdly, I checked their portfolio and past performance. I saw that from its inception it has been on a continuous uptrend. And since it has a mix of stocks and fixed income securities in it, there's a higher rate of return but with some volatility.
That was in August 2007. I checked the NAVPU (Net Asset Value per Unit, while for mutual fund it's per share) daily which changes up or down ranging from a few pesos to a hundred. I was happy that in general the rate increases up to a point that it reached an all-time high in October that I decided to cash it in. My first attempt in UITF gave me a return of 18% in less than 2 months. I just realized I should have put in more money. But it was beginner's luck.
In December, I decided to invest again now that the rate went down by a few hundred pesos. The next month it went down again but I continued to invest. The same thing happened in the succeeding months, with the rate going down and I continuing to invest. My philosophy was the general direction it will go is only UP in the long term. And I incorporated what some investors say as cost averaging, which is continuously investing in order to absorb the changes and averaging over the long-term your investment. However, up to now, the rate is still going down. As a precaution, I invested partly on Fixed Income Fund (which is more conservative than the Balanced Fund) in order to preserve my capital more due to higher risk in the Balanced Fund. But both of them are going down although not at the same rate.
I stopped my continuous monthly investment last month. I want to wait it out first until the market changes course. I am planning to analyze the fund performance based on the Technical Analysis training I attended and assess whether it is time for me to pull it out or just hold. Unfortunately, the website where I can access the charts currently doesn't work. O well, I just need to look for a way to improvise.
While the current economy is not the best time to invest, I am now starting to learn what I can about investments particularly the stock market so that I am prepared to take action when the right indicators/opportunity comes.
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