Monthly Archives: June 2013

PSEi Closes at 5,971.05, So What is Your Plan?

24 Monday Jun 2013

Posted by in Stock Market

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Investors have mixed reactions on what was happening on the market nowadays, The PSEi broke the 6,000 level today which closes at 5,971.05 with -3.41% decline from t’s close on Friday. Many believes that the next support will be at 5,800. Questions like “Should I cut Lost?”, Should I transfer my position?, should I close down my computer?, Should I sell “Company x” stock or not? , This are just common questions you can see in any forum about investment.

The market was down for almost 1 month and it all started last May 22 upon Ben Bernanke announcement for possible tapering of the QE.

As an investor we need to have goals and plan in every investment that we make. We need to understand that stock market is not meant to be for short term. In time like this if you buy stocks, you could get more stock with same value of your money last month. Peso Cost Averaging is a great methodology in investing.

Nobody knows when the market will rebounce, there might be some technicians that are telling things but nobody knows what investors will be thinking tomorrow or on the next few days or even months.

If you think that you cannot handle your lost, then make a cut lost. If you are for long term, then the market correction that we are experiencing today would not mean anything 10 years from now.

The best thing to do in time like this is to increase our cash flow so that we can have something to invest. Diversified your asset so you will not be much affected by the volatility of the market.

Bear in mind that we gain from stocks not only from price appreciation but also from dividends.

Here some reminders before joining stock market or equity funds:

  • Equity Funds and Stock Market is not for Short Term but it is for Long Term
  • You need to be insured prior to Investing
  • You need to have Emergency Fund before investing
  • You need to be bad debt free before investing
  • Money invested in stocks and equity should not be withdrawn within 5 years of your investment.
  • Do Peso Cost Averaging
  • Equity and Stocks is a High Risk Investment but with a probability of High Gain

My YTD was reduced to +3.82%, but at least I am still on the gain side for this year.

Electrical Engineers in Saudi Arabia Listen to Financial Literacy on their Annual Convention

22 Saturday Jun 2013

Posted by in Speaking Engagement

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Yesterday I was invited by Institute of Integrated Electrical Engineers of the Philippines Inc. (IIEE-CRCSA) Central Region Chapter, Saudi Arabia to discuss about Tendering Process and Financial Literacy. It was indeed a great experience to discuss financial literacy with more than 100 attendees of the convention. There are some attendees who have already started having their stock market or even mutual fund but majority of the crowd have not yet started investing. OFW’s in Riyadh needs to be literate on things like this since as what I have told them in the seminar, it is not a matter of how much salary do they have but how much savings do they have  as part of hat salary.

IIEE 2013 Plaque of Appreciation Dexter Panganiban

IIEE 2013 Plaque of Appreciation for Dexter Panganiban

 

IIEE 2013

I teach them the basics about 70%-20%-10%, in which 70% goes to expenses, 20% to investing and 10% as your good will or tithes.

Here is the topic that was covered during the seminar:

FINANCIAL LITERACY:

  • Money Mistakes Among Pinoys
  • Income Management
  • Increase Cash Flow
  • Debt Management
  • Create Emergency Funds
  • Ensure Proper Protection
  • Build Long Term Savings

It’s really more on Financial Literacy 101. An Introduction that could open their minds about investing and Financial Literacy. If you happen to be one of the attendee during the event. You may get the presentation files at http://bit.ly/iiee2013

For speaking engagement you may contact me through our contact page.

Learn to Start Investing

17 Monday Jun 2013

Posted by in Personal Financing

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One day when I was discussing about Financial Literacy in one of my colleagues, he told me that he doesn’t want additional insurance or any other investment because he have already invested in a reputable company. When I asked about his policy he cannot tell me anything about his investment in that particular company, what he have told me is that he is pretty sure that he will earn.

The next question I ask him was when did he think that he will earn from that investment and the answer was he did not know all he knew was he will earn because his friend invested in the same company and later earn more than 50% after 2 years.

It is so sad to know that there are lots of sales agent whose mission is just to sale, they don’t care if their client knows the risk that they are going to face. There are lots of sweet talk from different agent.

As an investor we need to know the specific details on how a certain company will make our money become bigger. We also need to know the risk that we might face after investing. We need to understand that there is NO risk free investment.

We need to ask everything from the sales agent, and if he cannot respond it only means that he/she is not the right person to advise you about the particular investment. But still give him a chance to ask his superior maybe his just new, but if he cannot answer it with in one day that means his support is weak.

We need to be wise in investing our hard earned money. Don’t make your friendship, family relationships, and church relationships as your basis of investment. You need decide after knowing the ins and outs of your investment.

In investing we need to have some goals, it is why you need to know the estimated time frame of growth of your investment.

This morning my youngest son, Daniel, 6.5 years old, gave me 1 Saudi Riyal (11 Php), he told me that he want to start investing like his older brother. I asked him about his goal and replied “ What is goal” and after discussing with him the meaning of goal he understood and told me that he want to buy his own Nintendo DS next year.

One Saudi Riyals

I am glad that at a young age my son is starting to understand the idea of investing. He understood that in order for him to get what he wants, he need to sacrifice a portion of his daily “baon” and stop buying some of his wants.

So if my son got the idea and decided to start savings, I challenge you to act and move to start saving for your goals.

Top Insurance Company 2012 Based on Premium Income

12 Wednesday Jun 2013

Posted by in Personal Financing

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First of all, who needs an insurance? And why do you need an insurance?

An insurance is a need for those people whom somebody is depending on their income. An insurance policy can replace one’s income in case of death or disability.

According to investopedia.com, Insurance is defines as contract (policy) in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools clients’ risks to make payments more affordable for the insured.

One of the method in calculating the amount of insurance is through DIME method. D – Debt, I – Income, M – Mortgage, E – Education.

The Debt shall be equal to the combined credit card, loans and other debts.

Income shall be equal to income replacement for 10 years. Sometimes it is also calculated as (Monthly Salary x 12 / Expected rate of Return), with this calculation it is anticipated that money received from insurance company will go to an investment portfolio and its interest will become the living allowance of the family left behind. Example if you earn Php 20,000 and an expected investment rate of return of 8% per year. Calculation shall be as follows:

Php 20,000 x 12/0.08 = Php 3,000,000, therefore your insurance coverage shall be Php 3,000,000.

There are some financial guru suggesting that a 5 years’ worth of salary is enough to let the remaining partner recover from the loss of their partner. In reality all fathers should have an insurance.

The mortgage shall be the total balance of mortgage to be paid.

Education shall be the amount of money to spend for the education of your children in the future.

Here are the reason why you need insurance:

  • As mortgage protection
  • For income replacement.
  • For college funding
  • Free from the claims of creditors
  • No Tax Estate tax
  • Can be used as payment for Estate Tax

According to the submitted Annual statements of Life Insurance Companies, based on Premium income, a list of top insurance company has been released.

The top 10 companies are as follows:

  1. Sun life
  2. Pru Life
  3. Philam Life & Gen
  4. Phil AXA
  5. BPI Philam
  6. Insular Life
  7. Manulife (Phils)
  8. SunLife Grepa
  9. Manulife Chinabank Life
  10. PNB Life

See the picture for the complete list

top insurance 2012

An insurance could also serves as payment for estate tax which is approximately 20% of the estate left by the deceased person. So if nobody is depending on you but you have lots of estate (land, mutual fund, savings account, UITF and more) it is wise to have insurance, so that your beneficiary will not have any problem taking your estate from the government.

Are you a Long Term Investor? Or a Trader?

03 Monday Jun 2013

Posted by in Stock Market

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psei

Seeing the decline of the Philippine Stock market price? Are you one of those who are afraid losing money? Or you are already thinking of going out from stock market? Well check out my post below.

All Equity Funds (Funds with high percentage invested in the stock market) in Mutual Funds are also affected by the sell-off which started from last week.

In stock market we have two types of players, first is Traders and the next is long term investor.

So Who are Traders?

Traders or commonly known as “Tsupiteros” are those stock market players who highly depends on Technical Analysis, rumors, tips and other things that really affect the market price. They sell if they think the price is high and they will buy if they think the price is really low and they could gain from it. Being traders is riskier compared to long term investors who are doing cost averaging.

So Who are Long Term Investor?

They are investors who believes on the company that they bought, they believed that they can act as a partner of the company and they have a strong belief in the valuation of the company. They also believed that when the market is down, they should buy more shares because it will be higher on the next bounce of the market. They are also doing Peso Cost averaging, in which they buy shares whatever is the market status. When the market is down, they can have more shares and when the market is high then it will be fewer position provided same value of money is being placed in a constant basis.

The Philippine Stock Market

The Philippine Stock market is one of oldest stock exchanges in Southeast Asia, having been in continuous operation since its inception in 1927.

The main index for PSE is the PSE Composite Index or PSEi, which is composed of thirty (30) listed companies. The selection of companies in the PSEi is based on a specific set of criteria. There are also six additional sector-based indices according to Wikipedia.

Based in market history, PSEi proves that stock market is a good investment for Long Term. That is also the reason why younger generation is highly recommended to enter stock market, since whenever there is correction or market crash, there are still room for recovery.(But of course market history should not be the sole basis of your investment. It is just an information)

Market Status (June 3, 2013)

Just for my record today, a report from BPI Asset Management Market Watcher.

The local equities market lost ground on persistent profit-taking due to valuation concerns.  The PSEi lost 258.57 points to close at 6,763.38. All sectoral indices closed in the negative territory led by property (-4.96%), financials (-3.80%) and mining and oil (-3.72%). Market breadth was negative with 138 declines outnumbering 33 advances with 33 stocks unchanged. Total value turnover was at Php16.58 billion. Foreign investors were net sellers at Php3.27 billion.

Happy Investing… Just for the record my YTD falls to +18.23% at least I am still positive.