Question: I have been an OFW for almost 10 years now and I think I am now ready to invest. There have been offers for me to invest in the country where I work but I prefer investing back home. Can you suggest investment options that are good for an OFW like me?— David S. via Facebook
Answer: OFWs are generally the kind of people who leave home because they want to provide for their respective families. Others are looking to broaden their life experiences by working abroad. With their time working abroad comes the idea of putting the money they’ve worked hard for to good use.
Most will find themselves putting their money in small businesses that their families can run in their stead; others will start savings accounts and allow the money they deposit to earn interest. There are other ways to grow one’s hard-earned money, such as investing.
Some people find the idea of investing daunting. The most common reaction is: “Don’t you have to study the stock market to get anything done?” There is a certain degree of studying that comes with investing, but there are a number of investment platforms available to the average OFW that are tailored fit to one’s risk profile.
A risk profile determines how aggressive someone is in making an investment, or one’s risk appetite. The first thing anyone wanting to start an investment portfolio should do is to answer a suitability assessment questionnaire. This will determine what kind of investment vehicle best applies to him.
The kind of investment vehicle you choose depends on the amount of money you are willing to risk.
There are several ways to start your investment portfolio, and here’s five:
Mutual funds
Investing in a mutual fund appears to be the simplest of the options. This type of investment takes most of the work out of your hands and places it in the very capable hands of fund managers. Their job will be to grow the money you invested, without you having to monitor it constantly.
Here’s a list of mutual fund investments that you can try: ATRKE Alpha Opportunity Fund, ATRKE Equity Opportunity Fund, First Metro Save and Learn Equity Fund, Philam Strategic Growth Fund, Sun Life Prosperity Philippine Equity Fund, Soldivo Funds, ALFM.
Stock investments
Investing in publicly traded stocks requires a certain kind of aggression and some research. Buying stocks basically means becoming a shareholder in a publicly traded company. Being a shareholder means you own part of the company, but only so far as much stock that you own in said company. The bigger your stock, the more you can participate and the more you earn, depending on the company’s performance.
Getting started requires opening an account with a broker, and here’s a list of online stockbrokers accredited by the Philippine Stock Exchange: AB Capital Securities Inc., Abacus Securities Corp., Accord Capital Equities Corp., Angping & Associates Securities Inc., BPI Securities Corp., COL Financial Group Inc.,Yap Securities Inc., First Metro Securities Brokerage Corporation, RCBC Securities Inc. and Wealth Securities Inc.
Unit Investment Trust Fund (UITF)
This form of investment involves holding a certain amount of money in trust as part of the investment made. It shares a similar structure as that of mutual funds in the aspect that your money will be managed by fund managers. This is usually offered by banks and differs from mutual funds in the sense that it involves per unit investment, as opposed to shares in a mutual fund.
Here’s a partial list of banks that offer UITFs: Metrobank, BDO, Union Bank, BPI, PNB, Chinabank, Security Bank, EastWest Bank.
Bonds
Given the propensity of OFWs to save their money in bank accounts, an investment vehicle that may also be available to them comes in the form of bonds. This form of investment is generally offered by large corporations and government offices (retail treasury bonds) as a means of raising funds by borrowing from the public. They have fixed maturity dates.
Here’s a few banks that also sell bonds: PNB, BDO, BPI, Metrobank
Real estate
This type of investment isn’t necessarily unusual, but leans more toward preparing for a future home, or a place where to put up a business. This form of investment requires a higher amount of money to start with as opposed to say, mutual funds. The money invested in real estate generally means having enough to make the payments for the land that you have purchased, and the lower the interest rate, the better.
What may eventually earn money from investing in real estate is the way land use changes over the years. One can acquire property through the Register of Deeds, but make sure to check the land title for encumbrances (mortgage, debts, and the like).
These are just some of the ways that OFWs can invest in the Philippines. They take a certain amount of patience and research before picking your investment vehicle.
Just remember to always invest according to your investment objectives, time frame and risk tolerance. Make sure that you also diversify your investments.
Randell Tiongson is registered financial planner of RFP Philippines. He is speaker, columnist and author of “No Nonsense Personal Finance,” “Money Manifesto” and The Inquirer’s Money Matters books. To learn financial planning, attend the 48th RFP program on July 11-Aug. 29. For more details, inquire at info@rfp.ph or text <name><e-mail><RFP> at 0917-3464126.