20. Swabeng Strategy: What UITF works best for me?

We know that not all UITFs are created equal. Some are made according to your risk appetite and some are made for how long will you hold the fund.

Regardless of which will you be choosing based on the criteria, what matters is that you understand the risk and reward for each before putting in your hard-earned money to have it work for you.

I will cite some of the most common types of UITF according to your Risk Appetite and Time Horizon.


1. Money Market Fund. 

This is a type of UITF that is invested on a short-term basis of usually one year or less. Your funds will be invested in a fixed-income securities . Usually, the return for this type of investment is relatively higher than time deposits and savings account.

This type is recommended if you prefer to preserve your capital and you. don't want to take much risk (for conservative investors) but at the same time you have your money grow within the shortest time possible. Opening a Money Market Fund account can be as low as a thousand pesos depending on the bank you'll be visiting. You could go here to this link for the list banks that offer Money Market Fund (please take note that the data on the link may vary from time to time).


2. Bond Fund

This is a type of UITF that is invested on a short to medium term. This time, your funds will be placed in Bond that you can withdraw after a period of as short as 30 days to as long as a year.

This type is recommended to people who wants to preserve their capital and at the same time doesn't mind the risk (say very low to low risk). You can open a Bond Fund account for as low as five thousand pesos depending on the bank you'll be going to.


3. Balanced Fund

Now this is where the excitement starts. This type is usually invested on a medium term to maximize the growth of your fund. They are usually invested in a combination of fixed-income securities like treasury bills and high yield savings account, bonds and even equities (Stock Market).

This type is recommended to those who won't be using their money for the next 3-5 years so that you would be able to utilize the power of compounding (I'll try to make a post regarding Compounding in the coming weeks).


4. Equity Fund

This would be the type of UITF that is heavily invested (almost 100%) in equities or stocks. Since the fund will be invested heavily on equities, risks for this type of fund are higher than the previous funds (hence this type is considered high-risk). With high-risks, as long as you've planned well, the rewards will be high also. This type of fund is suitable for aggressive, long-term investors who can sit and wait.

If you won't be using your money for the next 5-10 years, this would be the best type of fund for you especially if your goal for this fund is for your retirement or your kid's college education.


Regardless of what type of fund you choose, bottomline is, you have a chance to let your money work for you. You may check this website and you would be able to see the list of Banks that offer a specific type of fund that suits your personality.


Till the next post.

10A. Swabeng Thoughts: Message from COL Financial

I'd probably break (just once in a while) this habit of posting once every 5 days as I just receive a message from COL Founder and Chairman Mr Edward Lee today. 

It was a very insightful letter as he reminds us the value of not just investing in the Stock Market, but also investing in yourself to be Financially Educated. 

Here is the letter that he sent me (and probably thousands of COL Financial Clients). I hope you'd be able to learn from his letter.

Dear COL Financial Client,

One of our biggest concerns at COL Financial is that many people start investing or trading in the stock market, even though they don't understand how to do it. Worse, some people even invest in speculative issues with no understanding of fundamentals, turning investing into gambling as they get excited at the prospect of making a high return.

This is the reason why people lose money in the stock market, and it's also the reason why people lose faith in the stock market.

People enjoy the rush of earning money from something they don't understand how to do, not knowing that the boring, slowly-but-surely way of investing is what works out in the long term.

It's why we are always encouraging everyone, not just COL Clients, to attend and learn from our investing seminars. We want you to understand the rules of investing and trading, so you don't end up wasting your hard-earned money.

Aside from arming yourself with investing knowledge, I also encourage you to manage your risk.

Start by deciding how much money you are comfortable placing in the stock market. Then, rebalance your portfolio regularly, at least twice or thrice a year, so that the amount of money you have in the stock market is always an amount you're comfortable with.

Finally, I would like to remind you that what matters is how long you're in the market----- not timing the market. While we're not certain what will exactly happen in the stock market this 2017, know that the long-term growth story of our country is strong and intact.

Thus, regularly investing in the Philippine stock market will bring good returns in the long term. It may not be as exciting as following a hot stock tip, but as George Soros says, good investing is boring.

Sincerely,

Edward K. Lee
Founder & Chairman of COL Financial


Please note that I'll be sharing some of my knowledge about the Stock Market in the coming months as I just need to follow my outline in posting. 

7. Swabeng Strategy: How you kill your Debt?

If you're in Debt, I'm sure you'll find time to read this post.

But if you're in deep-deep (pun intended) Debt, I'm sure you'll read this right now.

No matter how deep in debt you're into, there are several ways on eliminating it the right way.

I haven't been in trouble with my current debt (via SSS Salary Loan) and I don't want to go through a knee-deep debt like probably most of us here.

Anyway, here are some of the tips that I can share with you on how you can eliminate your debt. Just take note that were not on the technical side yet. This is just more on the mental conditioning for you on how to get rid of it. Once you are mentally prepared and able, the technical side of dealing with it would be much easier for you. =)


1. Acknowledge that you are in debt and be ready to eliminate it ASAP.

There are times that you are still in denial with the fact that you have debt and you need to face them. Whether you have debt to your friend or relative, you should acknowledge. Be it Credit Card Debt or Cash Debt, you need to do something about this and you should always consider debt as a serious matter no matter what.


2. Know the root cause why you are stuck in debt and why it took you some time to take care of it.

I'll guess one factor why one is stuck in debt is because of living the luxurious lifestyle beyond one's means. When one cannot say no to friends, he will find a way to get money to be with friends. Personally, I've never encountered this as I know my limits early on. You may also want to list down your debt in order (from the most to the least) so you would be able to come up with a strategy.


3. Look for ways to reduce debt until you eliminate them.

There are a lot of free sources (online) on finding ways how to reduce debt. All you need is a reliable internet connection and the motivation to get rid of debt once and for all. You may also seek advice from someone you know who has been there and was able to eliminate it so you would be able to have an idea on how he/she dealt with it.


These would be my tips for now. I'm sure you'll be waiting for the specifics. Just stay tuned.