I am happy to see that more and more Filipinos are investing. When I started my advocacy, I wanted to bring personal finance and investing to the mainstream and to see more of us achieve financial peace. To quote my friend and stock market advocate Marvin Germo, there should be “no Filipino left behind” as our economy soars.
‘Which investment should I buy: stocks or mutual funds?’ – I get asked that question a lot. It’s always the same question but I give different answers depending on the person. As you begin to learn about investments, you’ll find out the different types of investments. Aside from stocks and mutual funds; there are bonds, UITFs, foreign currencies and real estate as well. Because of the different types of investments, there is really no one answer to the question ‘Which investment should I buy?’ Before you pick one investment over the other, it’s best to take note of these reminders beforehand:
Investing takes risk
As you read about the different types of investments, you’ll learn that these investments expose you to varying risks. In line with this, the riskier the investment, the higher the return on investment (ROI). Many Filipinos still prefer to put their money in time deposits (TDs) because TDs are basically risk-free. You’re sure to get your 1-percent return after a year, unlike in stocks where you can lose your money one year but you can gain 8 percent or more in the following year. Investing takes risk if you want a return that beats inflation.
Investing takes time
Time is a big factor in investing. That’s why I recommend people to start investing as early as they can. I always relay the quote, “the best time to invest was yesterday, the next best time is today.” That’s why many fall for scams because they’re promised high returns in a short period of time. Investing, if you want to beat inflation and avoid market downturns, takes time. If you invest in the riskier alternatives such as stocks and real estate, condition yourself that you’re investing for the long term.
Investing takes knowledge
People are scared to invest because they fear losing their money. Many times, people would not take any risk at all. It’s a common notion that Filipinos are ultra conservative when it comes to money. That’s why they prefer to keep their money in a savings account or in time deposits. However, if you take the time to read and learn, you’ll find out that you lose money in a savings account because of inflation. This is the importance of knowledge. Investing takes knowledge and research. Don’t invest in anything you don’t know about. Read and educate yourself (even if you hire a financial adviser) so you know where your money is. This way, you’ll make the right investment decisions and avoid falling for scams.
Now that you’ve taken the preparatory steps to investing, you can read about the different types of investments. As you read along, you can make conscious decisions to decipher which investment most suits your needs and which do not.
Here’s another tip I have for you: invest in learning! Before you invest, investigate so that you realize that investing is empowering and not overwhelming.
Join me, Marvin Germo, Rex Mendoza, David Leechiu, Rose Rafael, Carlo Ople, Jacqueline Van Den Ende, Vasyl Davynko and Maarten Pennings at the country’s most empowering investment conference, #iCON2017 this May 27 at SMX Aura in Taguig City. The conference will not only give you information (a lot of it!), it will also empower you to make the right choices. Register via www.bit.ly/ICON_2017 or call 09161871506.