Should you keep or even start investing in 2017? Even before the start of the year, the stock market has been going down and alongside the value of the Philippine Peso. There are many factors that cause this – technical, political, and economical. Of the three, mas madaling makita at mapansin ang political factors. Not only in our country but outside just like the election of Donald Trump, Brexit, etc. However, it doesn’t always mean that politics is the major factor.
Mag-iinvest pa ba tayo? Financial experts agree that we should and here are the reasons why:
1. The economy will not stop moving with the changing of government leaders – politics play a significant factor in the economy BUT businesses will not stop making money and trying to make more money. Halimbawa, nagsasara ba ang SM tuwing nagkakaroon ng bagong president? Ang American mall na Target ay bukas pa rin sa kabila ng mga anti-Trump rally.
There are what we call captains in the economy, these are personalities like Henry Sy, John Gokongwei, Tony Tan Caktiong and more- sila at ang kanilang pamilya yung marami ng napagdaanan at alam na alam na kung paano magpatakbo ng negosyo, sa anumang sitwasyon. These are the same companies that we call “blue chip” where many mutual funds include in their portfolio.
While many of us are holding back and focusing on the issues and reasons why we should stop pursuing our dreams, tycoons like them see opportunity beyond the challenges and remain steadfast in running their business. If you invest in mutual funds, you grow with the economy which according to Sun Life of Canada (Philippines), Inc. will continue to remain strong and could even grow by 7%.
2. It is cheaper to invest while the stock prices are low – while several factors contribute to the “decline” in stock prices, it is the best time to invest and afford more shares now versus waiting for the market to go up. Remember, the cheaper you buy your investments then the bigger your return could be once the market reaches its peak.
Naaalala mo ba noong 1997, Asian Financial Crisis? Ang baba ng stocks noon, at ang mutual funds ay binubuo din ng stocks. Ang ibang investors, nag-panic and sold their shares at a loss. Then, there are those who remained steadfast and even kept investing. Sa tingin mo, sino kaya sa dalawa ang mas kumita ngayong tapos na ang krisis at umakyat ng muli ang Asian economy?
Sun Life Chief Investments Officer Michael Enriquez says, “With stock prices cheaper, it’s a good time to buy so they (investors) can enjoy the greater gains once the market goes up”.
3. Long-term view of investing (5-10 years) will allow you to create wealth – there is a difference between trading and investing. Investing is much like running a business where you try to create wealth not instantly, but overtime. Sabi nga nila, time is gold and when it comes to investing – it really is!Registered Financial Planner, Randell Tiongson advises investors to remain steadfast and disciplined in saving and investing. This will allow you to certainly win for the long term, 5 to 10 years from now.
Thinking about it, my own investments in mutual funds 5 years ago still have a positive return despite the ups and downs of the market. Long term kasi! Of course, we should also know when to reap the rewards of our long-term investments i.e. you have reached your financial goals like your child’s college fund, etc. This is why as normal people, we should still educate ourselves on the market outlook that prevents us from panic and derail us from our financial journey.
The signs are bright that we should remain steadfast and disciplined in achieving our financial goals, no matter what the market might look like – there are financial institutions and financial experts who understand the workings of the economy, knows how to lock-in returns to honor plan holder’s benefits, and know where to diversify its investments. Sun Life Chief Investment Officer adds that with the country’s increased consumer and government spending, the outlook remains fundamentally positive.
Mommy Lace Tip: Keep investing in 2017 while making sure that you and your family remain liquid or has the ability to pay in cash. This includes in times of emergency. Before you add to your investment or start investing, do have a budget on how much you need in cash for your daily needs and set aside this amount monthly while keeping at least 3 months worth of your salary accessible in cash in case of emergency. This way, you will not withdraw your investments or sell your insurance products before they realize their returns or benefits.
Stay positive, work hard, and enjoy your journey to financial freedom!