Assessing, prioritizing real life financial goals
In the same way that real life does not remain static, investment strategies should evolve as financial goals change through time. The needs, wants, and aspirations of a 25-year-old middle management executive, for example, will most likely be different from a 55-year old family man planning for his retirement. In each case, the way they invest their money should ideally reflect their present circumstances and future plans.
“The best place to start would be to assess and prioritize your financial goals,” says Philam Life Asset Management Inc. (Pami) president Ferdinand Berba.
“Are you dreaming of buying a car or a home? Are you setting aside something for your children’s education, a small business, or for your retirement? Essentially, you need to define your investment objectives so that the road toward achieving them becomes clearer,” he added.
While there is no “one-size-fits-all” portfolio that will address the different outlooks of each individual, there are important factors that can serve as guidelines in choosing the right investments.
“Managed funds have the flexibility to suit almost any investment purpose, so the key is choosing the right ones,” according to Berba. “The funds that are most suitable for you will largely depend on how long you intend to stay invested, and your attitude toward risk and return.”
However, these factors usually change over time. As the target date of using the cash approaches, or attitudes toward the market change, there may be a need to alter the funds in which you invest.
“Usually, there are fees associated with switching funds, but we feel that this may be discouraging to some. As such, in the case of Pami, we allow our investors two free switches every calendar year for each fund under every folio he maintains,” Berba says.
Fund switches may be a partial or full transfer from one Pami fund to another, provided that the client has gone beyond the minimum holding period of the original fund before transferring out. The transferred amount must at least meet the minimum initial investment for a new fund, or the minimum additional investment for an existing fund, and will be subject to the minimum holding period of the new fund based on its new subscription date.
“The Free Fund Switch is just one of the innovations Pami will launch. We are equally excited about launching various initiatives such as new mutual funds to strengthen our product line-up, and the Citi-BPI Philam partnership, where Pami Mutual Funds will be the underlying investment for their Variable Universal Life (VUL) insurance products,” Berba enthused. “Under this partnership, BPI Philam VUL products will be the exclusively distributed by Citibank,” he says.
