Investing is a Good Investment!
by Juan Ramon Ampil and Irish Irene Kay Corpuz
The whole world was forced into lockdown, which led to a lot of uncertainty – especially with our job security and family finances.
Many have already lost their jobs or lost a big portion of their savings. And now, twice as many are looking for ways to regain what they have lost. For the still-lucky ones, they are looking for ways to invest to keep their assets growing despite the crisis.
On this issue, Mr. Marvin Fausto, President of COL Financial Management Inc. , shares some tips on stock investments. If you’ve ever thought of learning about investments, here’s a crash course on the subject.
There is an opportunity in every crisis
We’ve faced a multitude of these crises, and as shown in the table below, our average 10-year compounded annual growth rate (CAGR) is 16.4%. Meaning if you invest during a global pandemic, where the stock values are presumably at their lowest, it is the best time to invest for the long term. As experts would say, “there is opportunity in every crisis”. And to this Mr. Fausto heartily agrees – the best time to invest is in a time of crisis. Historically, it has been proven, especially in our country.
These are the years that the Philippines experienced a crisis (eg; Power Crisis, Asian Crisis, Political Crisis, etc.)
If you’re just starting in investing, Mr. Fausto advises that you invest in these so-called ‘blue-chip’ companies. These are large, profitable, and well-managed companies such as telcos. According to him, it’s best to look at are the PLDT stocks due to the need for wi-fi. As most employees work from home, there is a high demand for the services they provide. Plus, you gain dividends when you invest in their company.
Mr. Fausto also suggested an option for those who don’t know what stocks to buy, this is called as Equity Index Fund. It is a fund that is invested in the 30 largest companies in the Philippines (eg; MVP Companies, Ayala Corp, SM Group). A fund manager will handle investments that will help you earn for as low as Php 1,000.
Mr. Fausto also suggests to always save at least 20% of your salary to invest in this equity index fund, so you earn both on your active income (salary) and your passive income (fund investment).
To sum up what Mr. Fausto is advocating – investment isn’t complicated, it is not hard, and you don’t have to be an expert or even have experience. Investment is for everyone!
Here are some of our NLEX employees who have invested before – the reason why they invested, plus some tips for new investors.
From his 30 years of experience in stocks investment, Sir Ato (Renato R. Martinez, TDE) advises the younger generation to make it a habit to put aside a portion of their salary as emergency funds which would sum up to at least 6 months of their total salary. He said that before investing in stocks, one should first be financially literate to minimize the risk of losing their principal.
Ms. Desa (Rhodes R. Waine, Sales Admin Senior Associate, Non Toll Business), considers the uncertainties of getting sick or having an unexpected death convinced her to avail of an insurance. This is to cover not only herself, but also her family in the future.
Thru reading about stocks and taking risks, Ms. Jen (Jenevile A. Mollina, Accounting Group Secretary I, Finance) was able to learn how to make one’s money work for them. She believes that taking risks and exerting some efforts to learn the trade would be a bit of a challenge, but the rewards would certainly be sweet! “After all, no one is in a better position than you are to know what is best for you and your money for your retirement”.
A year after she graduated, Ms. Rosy (Rose Ann S. Santos, HR Specialist, HR) started attending financial seminars and conferences thru Brother Bo Sanchez’s Kerygma Conference. She’s also been reading a lot of investment books to know more about stocks and other forms of investments. She believes that time is our greatest ally in investing. Defining one’s goal for financial growth, diversity in investments, and patience are the keys to financial stability in the future.
Jeo (Jeo Jenson G. Galisim, AMS Engineer Specialist, AMD) sought financial security for him and his family. He said “I think it was one of my best decisions in life – to be able to commit to investing was just as wise as being able to plan ahead and protecting your family from unforeseen, inevitable misfortunes.” He also sees great potential in long-term investments, which can also help you be smart in managing your finances. Surely his future self would thank him for doing this.