We understand that objectives and preferences can vary widely from one investor to another, and having the proper tools is critical to achieving desired outcomes. Equally important, is having the right people to help you stay focused on the long-term while navigating these market conditions. Here are investment wisdom insights from our FAMI Investment Advisors.
“Long-term investing to meet your financial goals”
Building your portfolio of mutual funds requires taking into consideration a lot of factors, such as your financial goals, risk appetite, liquidity requirements, and time horizon. The interplay of these would largely determine which fund would suit an investor best in achieving their financial targets.
In general, the longer you stay invested, the greater is the chance that you would make money as the market always recovers. Building your wealth is a long-term process: it is not a sprint, but rather a marathon. No matter what you do it cannot happen overnight as such, patience is required. Long-term goals such as planning for your child’s college education fund or your retirement, require time and only long term investment in the stock market has the proven power to generate optimal returns for these goals.
Long-term investment–most especially in the stock market–offers you an opportunity to beat inflation. It tends to work best against recessions and bear market as history has proven time and again. Over a short-term, stock markets are volatile and could be a roller coaster ride. But by staying invested in the fund, an investor has an opportunity to ride it out these short-term fluctuations and enjoy the eventual upside.
The greatest advantage of long-term investment, at the end of the day, is peace of mind and freedom from stress, knowing that your money is invested in good companies and grows with them for the years to come. – Ms. Sheila Limon, VP, Direct Sales Unit Head
The “Parking” Fund
Still undecided where to invest your money for the long haul? FAMI has a solution for you!
Given the recent market volatility brought about by the COVID-19 pandemic, we should consider diversifying our portfolio. While equity funds are intended for clients with long-term investment horizon, demand for more conservative investment outlets surged as investors sought safety amidst today’s uncertainties.
Instead of keeping your money in cash or traditional bank products, investing in Save and Learn Money Market Fund (SALMMF) can be an alternative since keeping your short-term funds invested is as equally important decision to make.
As of April 08, 2020, SALMMF has a one-year historical return of 2.72% net (3.40% gross) which could potentially yield higher returns than savings and checking accounts. This Fund can be used as a “parking” facility given the minimum holding period of seven (7) days.
SALMMF may also serve as an investment strategy for clients who are exploring for opportunities in other Peso-denominated Save & Learn Funds by doing interfund switches to take advantage of the current market situation. – Ms. Nikki Monzon, AVP, Banks and Non-Banks Unit Head
“When ADVERSITY becomes OPPORTUNITY”
In line with the COVID-19 progression and the circumstances of PH equity markets, we are now at the bear market territory. With this, it is not the time to be in “panic mode” but rather an opportune time to invest, top up and do “Cost Averaging” or average down in tranches.
The market is “on sale” and this situation does not happen often. Volatility in stock markets is inevitable and it is also a part of long term investing. Having a strong mindset is critical, and that is to stay focused on your long-term goals. Building your wealth over a long period of time is embracing the risk in investing in equities prudently. Take intelligent risks by investing regularly, it is unleashing the “Power of Cost Averaging”. By investing longer and starting early, it is unleashing the “Power of Compounding”.
Invest long term. Be patient. Don’t panic.
We at FAMI value our investors’ financial objectives, help our clients to invest and save for their future as we offer different funds that match different financial goals, risks and objectives.
“The time to buy is when there’s blood in the streets, even if the blood is your own.” -Baron Rothschild. – Ms. Elaine Gregorio, Manager, Agency Development Unit Head
You can find useful resources to help you navigate your investment goals at www.fami.com.ph.