All investments involve some degree of risk. The moment you #choosetoinvest, you are exposed to certain investment risks that can affect your returns in the long run.
In this post we are sharing four important things you should know first before you invest. We hope that learning these things will enable you to prepare better before you jump into the investment bandwagon.
1. Know your investment goals
Your job as an investor is to determine what your short and long-term goals are before you invest.
What are you trying to achieve with your investment? Is it for your children’s education? For your dream house? For your retirement?
Defining your goal helps make investing way easier. It helps you stay committed and focused to your investments. It will act as your roadmap towards a better financial future.
At First Metro Asset, we offer mutual fund products for both short-term and long-term goal you may have.
➡️ Save and Learn Equity Fund
➡️ Save and Learn Balanced Fund
➡️ Save and Learn Fixed Income Fund
➡️ Save and Learn Money Market Fund
➡️ Save and Learn Dollar Bond Fund
➡️ Save and Learn Philippine Index Fund
➡️ First Metro Consumer Fund
➡️ First Metro Exchange-Traded Fund
You can learn more about these investment products by visiting Our Funds.
2. Know your risk tolerance
We all have different risk tolerance when it comes to investing. Knowing how much risk you can take will guide you on the right investment vehicle that can maximize your earning potential.
If you want to make the most of your mutual fund investment, you need to strike a balance between risk and returns.
There are three types of investors according to risk tolerance:
- Conservative – Have the lowest risk tolerance among the three and lean more on portfolios with steady growth
- Moderate – Have a medium level risk tolerance and values reducing risks and enhancing returns, equally.
- Aggressive – Have the highest risk tolerance among the three and seeks the best possible return through long-term investing.
3. Know your time horizon
Your time horizon is the expected number of months, years, or decades you plan to stay invested in order to achieve a particular goal. By knowing your specific time horizon, you will be able to select which investment vehicle to best invest with.
Answer this question – how long are you willing to stay invested?
3 years? 5 years? 10 years? Or longer?
The rule of thumb is this – the longer the time horizon is, the more opportunity for your money to ride out the volatility of the market and experience the power of compounding.
4. Know your asset allocation
Asset allocation involves dividing your investment portfolio among different asset categories such as stocks, bonds, and cash. By properly allocating your assets, you can limit your losses and reduce the fluctuations of your investment without sacrificing too much of your potential gain.
Once you have these four things cleared, you are more ready to start investing. The next step now is to study the investment vehicle of your choice.
You may consult a First Metro Asset Relationship Manager, who can help you create your own investment portfolio based on your investment goals and horizon. Just go to our Contact Us page.