Look Before You Leap - A Guide to Choosing Mutual Funds

By Angela Stephan Heasley

Mutual funds are usually considered to be a risky venture. But that risk only comes when unwise decisions are made. The fault often lies in shoddy research, which leads to ignorance and assumptions. It isn't a simple matter, choosing where to put your money. You need to make sensible decisions - and for that you need to make sure that you have all of your facts straight. The best way to do that is to research. But what do you look for? The first thing to check is how the fund functions. Some mutual funds companies invest in small and medium-cap stocks while others prefer large-caps. Know which company invests where and you'll be closer to knowing how it performs. Another thing to look at is how well is has performed in the past, It might not show how well it will perform in the future, but at least you know that if there are very great ups and downs in their investment choices. You're better off choosing a steady fund, not a very volatile one. This is where you need to pay attention to who heads the fund. If there has been a recent change in who makes the decisions, then you might want to wait and watch their decision-making and its effects before you sign up.

Size also matters - if the fund is too large, it might have assets that are sitting idle. If the fund is too small, it might easily go belly up because there are too few investors. Choose a fund that is not too large but is still established long enough to be known about in the market. This neatly leads to the matter of fees. Whether or not you make a profit, you'll end up paying your fees. This is why you need to make sure that it doesn't eat into your pocket. If the firm's turnover rate is high, you'll find that it'll eat into your fees. The turnover rate is how frequently the firm trades - that is, how many times it buys and sells stocks. Trading incurs taxes, which you'll end up paying for. Keep that in mind.

You need to look at how the mutual fund works and more important, whether the working suits your needs. Undoubtedly, every firm offers you the option of a systematic investment plan - look at how viable an option that is for you. After all, it might be better than investing a lump sum and then seeing the firm close down. These are just a few things to look at before you agree to invest in a firm.

Mutual funds companies offer various types of investment plans, but systematic investment plan is good as compared to other plans.

When in Cebu City, please visit http://www.gregmelep.com for your real estate and retirement needs. Avail of the opportunity to own a condominium unit in Cebu City at the low amount of only P9,333.33 and House and Lot @ P 7,306.81/month only. Hurry while supply of units still last. Just call the Tel. Nos. shown herein: (053)555-84-64/09164422611/09173373687.

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Learn About Index Funds

By Angela Stephan Heasley

There is generally an air of anxiousness when you speak about mutual funds. This is because not all mutual funds perform as well as they should. The question of how lucrative investment in mutual funds really is arises when the funds don't perform well. So should the investment be ruled out completely? No, not really. There are some funds that are likely to prove profitable despite the slump in the overall market. Prime example of this being index funds. There are certain advantages to investing in index funds over the standard fare that you get when you choose to invest in mutual funds. The advantage springs right from the way the fund is operated. While average funds tend to buy stocks or bonds from individual companies in the market, index funds tend to buy the entire sector of the market. This simply translates to less hassle about picking and choosing the right investments.

When you don't need to choose, you don't need professional advice or people to analyse the market and tell you which stock might be the better buy. This means you're saving money that you would otherwise spend on people trying to decode the market and make shaky predictions about what could potentially be profitable to the investor. This is money that you get into your own hands as an investor. And the other good thing about index funds is that they tend to perform consistently, and better than most of the average mutual funds. What you end up with is a consistent amount that you receive as returns. There is also a benefit in the fact that it receives a good deal of tax benefits. You don't end up selling and buying stocks nearly as much as you would in the usual funds, where you buy and sell individual stocks.

When you don't buy and sell nearly as much, you end up saving on the taxes that is levied on your transactions. You also don't have to end up spending time yourself doing tons of research and speculation over which stock or bond might be better. You're saving yourself both time and money. This is perfect for those who have neither time nor the patience that mutual funds generally call for. All in all, for the first time investor, this is the safer route to take until he or she learns the ropes, so to speak. So, if you want a safe bet - an index fund might be exactly what you're looking for.

Investment in mutual funds is a good option to grow you money. Try index fund for investing.

When in Cebu City, please visit http://www.gregmelep.com for your real estate and retirement needs. Avail of the opportunity to own a condominium unit in Cebu City together with your own parking space at the low amount of only P12,000.00+ and House and Lot @ P 7,306.81/month only. Hurry while supply of units still last. Just call the Tel. Nos. shown herein: (053)555-84-64/09164422611/09173373687.

Article Source: http://EzineArticles.com/?expert=Angela_Stephan_Heasley

Bankers’ best investment bets in a low-interest-rate regime

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MANILA, Philippines—The Philippines is in a unique spot nowadays, with most macroeconomic indicators showing robust growth and positive sentiment in the business community, translating to better confidence all around.

However, this poses an equally unique situation for people who want to see their investments yield better returns. As the economy improves, domestic interest rates come down with declining risk levels associated with lending. At the same time, the push toward lower interest rates is also being driven by record low interest rates in the United States and Europe, as their central banks keep yields low in the hope of revitalizing their economies.

Where then should Filipino investors place their money to best profit from the financial markets, given these circumstances? The Inquirer’s Doris C. Dumlao and Daxim Lucas asked bankers and investment experts for their opinion on where to invest a hypothetical P150,000 in extra cash, and here’s what they said:

Norman Martin Reyes

SVP and head of marketing group

United Coconut Planters Bank (UCPB)

“Right now time deposits rates are not too attractive.

“If you have P150,000, you might want to look at UCPB’s trust banking products. With as low as P10,000, an investor can consider our various Unit Investment Trust Funds (UITF). Depending on the investor’s risk appetite, we can recommend either the United Equity Fund (UEF) or the United Balance Fund (UBF).

“The UEF is suitable for an aggressive type of investor with a long-term investment horizon. To achieve long-term capital growth, this fund invests in domestic, listed equities. This fund’s absolute year-to-date net yield is 16.79 percent. Our compounded annual growth rate (CAGR) for the last three years is 46.5 percent.

“The UBF is suitable for moderately aggressive type of investors. To achieve a balance between long-term capital appreciation and income growth, this fund invests in a mix of domestic, listed equities and fixed income securities. The absolute year-to-date net yield of this fund is 11.36 percent. Our CAGR for the last three years is 27.2 percent.

“We have two other funds that invest in fixed rate securities, namely the United Conservative Fund (UCF) and the United Cash Management fund (UCMF). These funds are less risky and they offer steady income streams but the returns are not as high as the other funds.

“One word of caution though: the UITF is not a deposit account and not insured by Philippine Deposit Insurance Corp. Any reduction in income or principal due to prevailing market conditions is for the account of the investor. Historical performance, when presented, is purely for reference purposes and is not a guarantee for similar future return.

“We also have other investment outlets. For P50,000, we can offer investors our services to purchase UCPB’s LTNCD from the secondary market, which can earn about 5.75 percent based on the present market rate. UCPB’s long-term negotiable certificates of deposit (LTNCD) pay interest quarterly and have a maturity of three to five years. We can also act as a broker and offer corporate bonds on the secondary market at rates better than the prevailing time deposit rates. Interest payouts depend on each bond offering.”

Pascual Garcia III

President

Philippine Savings Bank

“I would suggest mutual fund weighted to equities. Bond funds won’t do well next year. I think interest rates will move a bit higher so bonds won’t do well. Easing will essentially taper off locally and globally.”

Marvin Fausto

Chief investment officer

Banco de Oro Unibank

“Because of the people’s generally busy schedule, I recommend that they choose from the existing UITFs available in the banks, particularly BDO.

“They are professionally managed and offer better returns given the commensurate amount of risk one is willing to take. For the conservative investors, I recommend the Peso Money Market Fund—the fund is very stable and offers better returns compared with the ordinary time deposit.

“For the balanced investors, I recommend the Balance Fund that offers a good mix of investments in fixed income and equities, and for the more aggressive investors, I recommend the Equity Fund so they can participate in the strong long term performance of the Philippine stock market.

“UITFs have, in the past, outperformed comparative investments and are specifically designed to benefit investors over the long term. For P150,000, I believe the UITF is the best investment for you.”

Ma. Theresa Marcial-Javier

Senior VP/head of asset management and trust group

Bank of the Philippine Islands

“Invest in the Philippines. Put P50,000 in a growth-oriented peso equity fund that is positioned in cyclical bets that will benefit from the following investment themes—infrastructure spending, consumer spending, banking and credit cycle upturn.

“Put the next P50,000 in a long-duration peso bond fund as interest rates will continue to stay low for a while.

“Put the remaining P50,000 in a short-term fixed-income fund to provide for unforeseen liquidity requirements as well as a stable income source to protect the portfolio from market swings.”

Wick Veloso

Chief executive officer

HSBC

“Select common share equities with a good revenue story or potential significant growth business plan. Otherwise, go for preferred shares instruments (with good dividend paying history) like the SMC Preferred Shares for a good dividend return. Just go either way.

“Deposits, government bonds and other corporate fixed-income instruments offer very unattractive returns compared to the above mentioned investment opportunities.”

Gina Morales

Executive vice president

Philam Asset Management Inc. (PAMI)

“We believe that the Philippine equity market will continue its winning streak for the next three years as the country’s fundamentals are sustainable, with corporate earnings of listed companies expected to grow  as well. With this my recommendation is to invest over the long term in any of PAMI equity-laced funds, namely the Strategic Growth Fund, Philam Fund Inc. and GSIS Mutual Fund Inc., depending on their risk tolerance. These funds are actively managed and have outperformed the index and their peers, and have remained in the top 1 and 2 as compared to other equity funds in the market.

“Also our investment process remains to be our key differentiator versus other fund providers as seen from our consistent track record of performance and having to stay on top of the league tables. We encourage to start investing their hard-earned money in the Philippines given strong long-term growth prospects.

Overall mutual funds are still the investment structure of choice. It  fits every retail investor’s needs of starting with something small and bringing the most benefit of generating maximum returns through diversified portfolio which is actively managed by expert fund managers.

When in Cebu City, please visit http://www.gregmelep.com for your real estate and retirement needs.

Avail of the opportunity to own a condominium unit in Cebu City together with your own parking space at the low amount of only P12,000.00+ and House and Lot @ P 7,306.81/month only. Hurry while supply of units still last. Just call the Tel. Nos. shown herein: (053)555-84-64/09164422611/09173373687.

Things To Be Careful About While Investing

By Angela Stephan Heasley

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Mutual funds are certainly ways that you can grow your money. But everything has a flip side, and so does a mutual fund. There are some things that you want to keep an eye out for, just to make sure that the problem doesn't snowball into something you can no longer control. One such thing is your own savings and investment. Generally, once you get your pay, you do your best to ration it out to fulfill all your needs. The problem here is that you may not believe your mutual funds need to before some of the things on your list. The answer here is simply to make your payment an automatic one. Make your payments to the mutual funds companies every month automatic, so that you don't really consider whether or not to lay aside that amount for the month. It's already been done in the time you would've spent deciding.

You might also want to keep an eye on your investments. Everyday sighting doesn't help. It'll only depress you. But if you were to look at your investments on a monthly basis, you could see a change. Whether for positive or negative, this change will mean that you don't have to put out your money to be spent on little or nil returns. To avoid losses, you want to diversify. This way even if one of your investments fails because the sector fails another investment in another sector likely stops you from having to drown in losses. While you're investing, watch out for fees that jump out at you from seemingly nowhere. Watch out for things like sales load, or other kinds of management fees that you might have to be burdened with. If these go up, it means that you have less money for yourself, because you're using most of your money to maintain the fund company.

At the end of the day, you have to remember that mutual funds are a risky business. They aren't insured, and no matter how much you diversify your investments, there are chances that you could lose your money. Another thing you want to prepare yourself for is the inevitability that somewhere along the line, you will lose your money. There is no guarantee whatsoever that you must or will receive money when you receive in the market. Many times, the funds perform well below what they should and end up showing poorly on the balance sheet as well. This just goes to show that fund managers aren't omniscient; they will make mistakes at some point. Don't be shocked by it.

Different mutual funds companies offer you various types of mutual fund investment options.

When in Cebu City, please visit gregmelep.com for your real estate and retirement needs. 

Avail of the opportunity to own a condominium unit in Cebu City for only P12,000.00/month with your own parking lot. Hurry while the supply of units last. Just call the Tel. Nos. shown below.

Tel. No. 555-8464/09164422611/09173373687.

Article Source: http://EzineArticles.com/?expert=Angela_Stephan_Heasley

The Basics of Investing in Mutual Funds

By Angela Stephan Heasley

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No doubt you've got some plans for your future. Even if you don't, you're likely aware that you'll need some money for the future to meet your growing needs. But your needs aren't going to be met with the interest you get on savings accounts or your fixed deposits. So what do you do? You could try investing in mutual funds instead. There are various kinds that you could look up and pick the ones which are most likely to serve your own needs. The one thing you need to keep in mind is that you'll have to understand your mutual fund investments - and you can't do this if you don't know anything about what the company does. If you don't know squat about a company's product, then you don't want to invest in it. This is because you don't know whether the company's product is strong, is likely to survive competition and so on. For starters, it's best to stick to things you know best.

Once you've narrowed down the companies and the products you can identify and know enough about, you can move to the next step: comparing the pricing. You want to look at how the company has performed, yes. But you should also look at how friendly the company is to share-holders and how well priced the shares are so that you can buy them. Even when you're looking at a company's past performance - don't invest because you see the profit is good. You're not looking at the profit but checking the volatility of the fund when you do this research. If you've noticed very high fluctuations, you might want to not invest, or at least invest very little in it - it is certainly a risky venture. Look at the fund ranking when you're researching, but take the ranking with a handful of salt - if the person managing the fund has changed then it is likely the results will as well.

You want to opt for diversified funds as much as possible. Don't invest in multiple companies in the same sector - that isn't what qualifies as 'diversified'. The whole idea is to invest in entirely different sectors. This is because if a single sector goes into troubled waters, another sector which performs well is likely to make sure you don't drown. At the end of the day, you just need to do your research well and look for a competent fund manager to handle your investments. But make sure that you also keep an eye on them and that you ask questions when you don't understand something.

Among many mutual fund options you may invest in diversified funds to complete your financial goal.

When in Cebu City, please visit gregmelep.com for your real estate and retirement needs.

Article Source: http://EzineArticles.com/?expert=Angela_Stephan_Heasley

Stocks extend gains

Doris C. Dumlao

Philippine Daily Inquirer

BUOYANT INVESTOR sentiment allowed local stocks to extend their winning streak for the fifth straight day and hit a 31-month high Friday despite an overnight bloodbath in Wall Street.

The main-share Philippine Stock Exchange index gained another 33.11 points or 0.93 percent to close at 3,593.60. This was the highest since the 3,617.29 recorded on Jan. 2, 2008.

For the whole upbeat week, the index added 124.08 points or 3.6 percent. The PSEi has climbed 17.7 percent so far this year.

Dealers said investors ignored the weak data abroad that caused Wall Street to decline overnight. Instead, the local market focused on the rosy domestic economic fundamentals and corporate earnings. Any market dip was seen as an opportunity to load up stocks.

The market is likewise still benefiting from a post-election euphoria and the ample liquidity seeking better returns amid an environment of record-low interest rates.

“It’s really hard to stop a train full of money. We were expecting a correction for the week but given the corporate results, which showed most corporations performing better than expected, investors were inspired by such good numbers,” said Astro Del Castillo, managing director at local fund management firm First Grade Holdings Inc.

Published in Philippine Daily Inquirer August 21. 

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Login                          Select                         PAMI employees

WELCOME We are Philam Asset Management, Inc. (PAMI), an asset management company that manages, distributes and provides investment advisory to seven mutual funds. We help you achieve your financial goals through sound advice and wise investing. Our wide range of mutual fund products provide you with high potential returns at well-managed risks. FUND NAME Net Asset Value Per Share- Aug 20, 2010 Year-to-Date Return     Philam Bond Fund Php 3.049 4.47%     Philam Dollar Bond Fund USD$ 1.8512 11.26%     Philam Managed Income Fund Php 1.0974 1.37%     Philam Fund Php 10.7359 26.08%     GSIS Mutual Fund Php 2.4664 24.27%     Philam Strategic Growth Fund Php 410.84 30.17%     AIG Global Bond Fund Phil USD$ 1.1836 2.16%     NCM Mutual Fund of the Phils., Inc. Php 1.2586 17.63% Philippine Stock Exchange Index - PSEi (Aug 20, 2010) USD$ = Php Exchange Rate (Aug 20, 2010) 3593.6 USD $1 = Php 44.971

Contact us: Tel Nos.: (63) (2) 867-3912 to 18 | Fax No.: (63) (2) 813-6813 or 18

Above is a mugshot of the Daily Report of Philam Asset Management, Inc. published in their website to help investors monitor their investments in the different mutual funds being mange by the said company.

When  I bought some shares from Philam Strategic Growth Fund about six months ago, it cost me about P300.00 NAVPS but now if you will look closely, the Net Asset Value Per Share as of August 20, 2010 is P410.84 NAVPS or a profit of about P110.84 pesos for the past six months per P300.00 share. I bought about P21,000.00 worth of shares. So as per my computation I already earned P7,758.80 in six months.

How about you? Do you have some spare money to invest and let it grow without you doing anything?

Do not allow your money to rot in a savings bank earning a mere pittance of interest of about 2 per cent a year. Why not try what the rich people have been doing. For a minimum amount of P5,000.00, you can already share in their money making ventures. I can assure you that investing in mutual funds and even stocks is more safer than if you invest in a business venture you have no training and knowledge about.

Philippine mutual funds money and security: Alejandro A. Esteban, editorial consultant