What newbie investors need to know

    




Newbie? Here's what you need to know. 





Investing Early is key. I have been emphasizing this over and over again in my blog.

With this post, I will teach readers the 2 types of investments:

1) lending investment
2) ownership investment.

What is lending investment?
It is actually “lending your money to institutions in exchange for a profit. Putting money in the bank is lending investment. Money in a savings account or in a time deposit is actually a loan to the bank.

What is ownership investment? 
It is the acquisition  of OR OWNING assets (shares of stock, property, etc.) with intention of periodically earning income from these assets. In ownership investment gains or losses are actualized only when the asset is sold. This type of investments are generally  more suitable for long term goals.

Now the more important stuff. Guides in Investing:

Know that:
a) the higher the return, the higher the risk;
b) the longer the time, (investment period), the lower the risk; and
c) the longer the time, the higher the return

Investing is a choice. Retiring rich is a choice. If you know what you're doing early on, nothing will stop you from retiring rich. Doing something NOW rather than later (or none at all) IS A FAR BETTER CHOICE to make.

Again, it’s developing the habit that’s more important. When you muster the discipline, you will retire rich.

Good luck and happy investing!

See this yahoo featured article about how to retire a millionaire

Yahoo featured this today. Click the link.

start-with-10k-retire-millionaire-marketwatch: Personal Finance News from Yahoo! Finance

For most of us Pinoys, around P10M (instead of $1M) is enough retirement fund. So do the math. $:P exchange rate is around P42. This should give us an idea of how much to target monthly and how long.

Good luck, people. Information is key!

Mutual Funds Performance update - Q1 2011 report

Let me refresh your memory, dear readers:


Image via WikipediaWhat is a Mutual Fund?

A mutual fund collectively pools money from individual and corporate investors. These funds are managed by a professional fund manager who invests the collected money in financial securities such as stocks, bonds, or money market instruments. In local lingo, this is one type of  "bakas" system of investing, as I mentioned in a previous article of mine. (Read about it here). 


Our friends from the Investment Company Association of the Philippines (www.icap.com.ph).has made public the Philippine Mutual Funds Performance Report for the 1st quarter, 2011, as follows:

In bullet points:

• Mutual funds in the Philippines were off to a not-so-good start in 2011, as most funds registered negative returns during the first quarter of the year.
• This was in stark contrast to the funds’ performance during the similar period last year, wherein all but one mutual fund were in positive territory.

Note: 

a) Figures in (xxx) below denote a loss; 

b) In blue means a gain 

EQUITY FUNDS (primarily invested in Peso equity securities): 
Sun Life Prosperity Phil. Equity Fund – (1.18%)
Philequity PSE Index Fund – (1.31%)
Philequity Fund – (1.52%)
United Fund – (2.11%)
Philam Strategic Growth Fund – (2.78%)
Philippine Stock Index Fund – (4.18%)
First Metro Save and Learn Equity Fund – (4.86%)
ATR KimEng Equity Opportunity Fund – (5.46%)

FOREIGN CURRENCY-DENOMINATED EQUITY FUND
ATR KimEng AsiaPlus Recovery Fund – (0.05%)

BALANCED FUNDS (primarily invested in Peso debt and equity securities)
Sun Life Prosperity Balanced Fund – (1.51%)
Optima Balanced Fund - (2.29%)
Bahay Pari Solidaritas Fund – (2.79%)
GSIS Mutual Fund - (2.82%)
Philam Fund, Inc. – (2.82%)
NCM Mutual Fund of the Phils. – (2.86%)
First Metro Save and Learn Balanced Fund Inc. – (5.16%)
MFCP Kabuhayan Fund – (5.90%)
ALFM Growth Fund – (6.74%)


FOREIGN CURRENCY-DENOMINATED BALANCED FUNDS: 
Cocolife Dollar Fund Builder – 0.68%
Sun Life Prosperity Dollar Advantage Fund – 0.19%

BOND FUNDS (primarily invested in Peso debt securities)
Cocolife Fixed Income Fund – 1.33%
First Metro Save and Learn Fixed Income Fund – (0.13%)
Grepalife Bond Fund Corporation – (0.24%)
ALFM Peso Bond Fund – (0.37%)
Philequity Peso Bond Fund – (0.82%)
Sun Life Prosperity Bond Fund – (1.00%)
Ekklesia Mutual Fund – (1.28%)
Philam Bond Fund – (1.32%)
Prudentialife Fixed Income Fund - (3.01%)
Sun Life Prosperity GS Fund – (3.06%)

FOREIGN CURRENCY-DENOMINATED BOND FUNDS:
PAMI Global Bond Fund – 0.41%
Philequity Dollar Income Fund – 0.02%
ALFM Dollar Bond Fund – (0.04%)
Grepalife Fixed Income Fund Corp. – (0.22%)
Grepalife Dollar Bond Fund – (0.31%)
Sun Life Prosperity Dollar Abundance Fund – (0.90%)
Philam Dollar Bond Fund – (0.93%)
ATR KimEng Total Return Bond Fund – (1.35%)
ALFM Euro Bond Fund – (1.73%)
MAA Privilege Euro Fixed Income Fund - (2.90%)
MAA Privilege Dollar Fixed Income Fund – (4.76%)


MONEY MARKET FUNDS (primarily invested in short-term Peso securities)
ALFM Money Market Fund – 0.41%
ATR KimEng Money Market Fund – 0.34%
First Metro Save and Learn Money Market Fund, Inc. – 0.29%
Philam Managed Income Fund – 0.14%
Sun Life Prosperity Money Market Fund – 0%

My take:
Although the rate of return is a good measure of performance, other things such as consistency of return and exposure to risks must also be considered. Note that past performance of a fund is not and cannot be a guarantee of future returns.


So there. Again, INFORMATION IS KEY! Be wise with your investments, readers.

You may also want to read my article on : Earning while sleeping. Read here.
Hesitant? Read my article on hesitation here.

My life's mission update

The past few days had been such a joy: I was able to fully immerse myself in the other area of my life's mission.

Although it has always inspired me that the World Wide Web (internet) has allowed me to reach Pinoys all over the world, i can now say that what I have been up to the past couple of days has been to date the most rewarding.

I touched base - quite literally- with people in need of personal financial advice in the northern part of this country. The lectures I gave out had been eye-openers, these people bluntly told me. And that's enough for now for me to continue on with this fight.

Indeed, life has given me so much. It's time for me to really give back.

PS.
I have now started working on my e-book about managing one's personal finances. It will be out very soon. Meantime, enjoy great reads I am sharing with you, readers in my newly-created page titled "e-books".

May wealth and happiness follow you forever.




I have also been busy working on my e-book collections which i intend to share with my readers.

Readers' question: How do i save money?

A reader emailed me, asking "how do i save money?".Another one asks my opinion on Francisco Colayco's suggestion (in his book, Pera mo, Palaguin mo) of using envelopes.

With this post, I hope to answer these questions in the simplest, and most effective way i can. In fact, i will only use 3 words: Just do it!

I'm sorry if you were expecting a magic formula. But folks, really, ask yourself, how else do you expect yourself to save? In my opinion, there is no formula. Just willpower.

By all means you can, save every excess centavo. These add up. It's developing the habit that's more important. Once you've developed the habit, and have made this automatic and lasting, I promise you, you will very soon be taking the next big leap which is "growing your money" thru investments.


I can relate to you, ordinary Juan Dela Cruzes. I've been there. I am living proof that this is possible. Discipline, willpower and a bias for action. These are key.

Hesitant still? Also read (click links) relevant topics about:

a) Why create wealth?
b) Why save?
c) Money-saving tips
d) Investing 101
e) What to do with money saved

Basketball and building wealth in the Philippines

Before anything else, let me make it clear: I love basketball. I play the game 3x a week. It is one of my greatest passions in life. However, i feel time is beginning to catch up on me. One day soon, i'll be saying goodbye to the sport. But not before i give the Filipino youngsters out there a piece of my mind. 

"one of my personal joys"

The Pinoy male reader will definitely relate to this post. The female ones, my apologies if you cannot. 

Something’s really wrong with the below scenario:

Almost everyday at around 3pm, a group of  basketball playing guys travel to an unfamiliar barangay to look for worthy opponents. This is called “dayo”, in street language. Normally, the hosts (the ones dinayo) would agree to play but with a bet, to which the visitors (the dayo) accept as this is their intention in the first place – to try to win games so as to bring home cash.

So the exciting game begins.