China Bank and BPI Offers Additional Equity-Invested Products

It may be a case of bad timing or not depending on how you look at it but stocks are certainly not attractive nowadays. What were China Bank and BPI (Bank of the Philippine Islands) thinking?

The Philippine Stock Exchange index just fell to 6242 from a record high of 7392 mainly because of investors pulling their capital from the market. From an appeal standpoint, stocks certainly lost a lot. People look at recent performance mostly for their investing decisions. Rightly or wrongly, the downward trajectory of stocks makes them very, very unattractive.

But as I have been pointing out recently, lower stock prices can be a good thing. This is most especially true if you're a long-term investor, which you should be. “Short-term investors” is an oxymoron. There's no such thing. If you are one, you'd be better off being called a speculator than an investor.

New Product Offerings

Both BPI and China Bank are adding (Unit Investment Trust Funds) UITF products that are invested in equities. (Equity is another name for stocks). These guys may have come up with their ideas when the market was still doing well. Too bad that they had to roll them out in time with the market plunge. Not good for marketing purposes.

BPI's additional UITF is said to be designed to track the Philippine Stock Exchange index. It is apparently targeted to the retail market, meaning individual investors, for a minimum capital of P10,000. It is very similar to BPI's existing mutual fund which is also PSEi-index based although the fact that this one is a UITF makes it a little different.

One thing to be said about index-tracking funds is that they should be less expensive to manage. The fact that they are tracking an index means that the fund manager does not have to execute a lot of investing strategies. In fact, he won't need to at all. He or she just tracks the index. So you should expect a lot less management fees for these funds. If not, do not invest in them!

China Bank, on the other hand, is also adding a UITF invested in equities but is not intended to track the stock market index. A majority of the fund (up to 90%) will be invested in equities with the rest going to fixed-income securities and bank deposits. It is also, rightly, marketed as a long-term investment for an "aggressive" investor willing to stay amidst volatility in the market. Minimum investment is P50,000 for a holding period of at least 30 days with allowable top-up of P10,000 minimum.

Recent Conflagration

These investment products are late reactions to the impressive run of the stock market right before its downward slide recently. It's not surprising for banks to try to cash in on that.

But smart investors would know that it's the wrong kind of strategy to invest even more when stocks are getting really expensive. That's why although these two banks did not intend it, the current bear market is probably the best time for their offerings.

It will be difficult to convince investors that they should invest in stocks now. But if you compare it to the market say, a few weeks ago, it's arguably better. Some people would wait for the market to hit bottom but it's not that easy to predict. If I had the money, I would go for stocks. Whether they are in the form of these two UITF's from BPI and China Bank is entirely another matter. I'd get to the minutest details to convince myself they're any good.

Photo Credit: Jun Acullador (Creative Commons)

Investing in Human Capital for Pinoys

As has been the case for many years now, last week’s opening of classes here in the Philippines for elementary and secondary students proved challenging most especially for public schools.

The usual lack of classrooms, teachers, facilities, books and many other necessary learning materials continue to plague the public school system. These problems have been present as far back as we can remember so that expectations for improvement have been low and people have resigned themselves to the pitiful situation that is out there for them.

How Smart Investors Deal With a Falling Stock Market in the Philippines

There has been a recent downward slide in the Philippine stock market for the past few days. The Philippine Stock Exchange Index (PSEi), which is a representation of the stock market performance in the country, went down from its highest point of 7,392 to close at 6673 as of Tuesday (June 4, 2013).  That represents a 10 percent slide in few days’ time.

Any stock market investor would know that fluctuations such as this are not unusual. The volatility of stock prices is unpredictable. The collective sentiment of investors drives the demand for stocks but this demand is not always based on any logical reason. That’s why the real worth of a business is not always properly reflected by way of their stock price.

Gold Investments in the Philippines

You don’t have to be rich to invest money in different ways. Anyone can save up money for investing. For those who are looking for an investment that can provide them with high returns for low initial investments, then putting money in the stock market can be a good move.

There are many people who earned millions by buying and selling stocks from different companies like Shell, Petron or San Miguel. But if you are not particularly knowledgeable with these kinds of investments, there’s a chance you could lose money. To minimize the risk of losing money, you need to learn how to invest wisely.

Among all investments, gold is often considered as the safest, especially during times of financial crisis. Some people buy, sell, and stock gold from online bullion companies like Bullion Vault, while others buy stocks from mining companies like Philex and Lepanto.

Tips for Newly Married Couples to Start their Life Together on Good Financial Footing

Getting married is a beautiful time in any person's life. You are deciding to join your life with another person's, and you are declaring your love and commitment for one another to the whole world. It is a time of pure happiness and unbridled optimism. You don't want to ruin it by starting your life together mired in debt and fighting over the bills.

It's important for every newly married couple to create a solid financial plan so that they can start their new life together on good financial footing. Many of the major problems that couples experience in their marriage are a result of financial issues. You don't want to let this happen to you. Here are a few tips for how you can create a strong financial plan to give your new life together the best start: