Peso Cost Averaging

By Cheryl Sperling

Last time, we were talking about investing in mutual funds. Some will be asking when is the best time to invest and how often do we invest? Well, there's is no best time to invest than NOW! The sooner we start investing, the better, due to the power of compounding or the rule of 72. We invest even when the market is down, or the market is up, or when there is a political chaos, or when there is political peace and quite. We may hear that we should time the market, but in the following chart below, it will illustrate three (3) scenarios of different market conditions in the stock market.

Peso Cost Averaging. Like saving, we should make investing a regular habit. We should invest regularly, say monthly at a fixed amount! This is what we call as peso cost averaging. By doing so, we minimize or reduce the risk of our investment when the market goes up and down, or simply said whether the prices of stocks are high or when the prices are down. "Save as fast as you can while you can."

                                                         *Courtesy of IMG

In the illustration, an investor, Mr. A, decided or planned to invest 100 pesos every month for 6 months: (Today, or at present, we can start investing in mutual funds starting at

Why Mutual Funds?

By Cheryl Sperling

As a new investor, investing in the mutual fund is the easiest and least stressful way to invest in the market, relying the investing in the capable hands of financial experts.

Among the benefits of mutual funds are:

1. It is so diversified. There is a specific allocation of the kind of investment entered to, in each type of funds. For example in Stock or Equity Fund, there is a mandate that just 10% shall be allocated for each industry, like for the 10% in banks, the Fund will buy blue chip companies like Banco de Oro, BPI , etc.

2. It is managed by a professional money manager who constantly monitors the stocks or bonds in the fund, so you can rest assured that it is on good hands. This is the manager's primary job so he has a lot of time in the research and in the selection of what investments to buy or sell, compared if you or the individual investor does the managing himself.

3. It is so liquid. If you want to redeem your shares, you will have the money in

Types of Mutual Funds

By Cheryl Sperling

In the US, there are 10,000 kinds of mutual funds and here in the Philippines there are only fewer than a 100. But Mutual Funds can be classified into 4 types as follows: Bond Fund, Stock Fund, Money Market Fund, and Balanced Fund. They are so named in accordance to where the Mutual Fund is invested in.

                                                           Courtesy of IMG

How then will we choose which kind of mutual fund we will invest in? The answer is based on your investment risk appetite and/or your

What Is A Mutual Fund?

By Cheryl Sperling

A mutual fund is a type of investment wherein which a "a group of investors" or an investment company pools money from many investors to buy stocks, bonds, or other money market instruments and is managed by a Fund Manager. This is a better option to investing directly, say in the stock market, especially if one has no time to do the research on individual companies and have no technical expertise in stock trading.

                                                                 Courtesy of IMG

From the diagram above, we can see that many investors buy shares on a Mutual Fund of their choice and then the Mutual Fund Company will buy

5. Build Long-Term Savings

By Cheryl Sperling 

Savings. We need to have savings to take care of our short, medium, and long term plans. Short term savings may be for financing your travel plan in the coming months or for the tuition of your kids this coming school opening. The medium term savings may be for your plan of buying a car or a house in 2 to 3 years time. And the long term savings goes towards your retirement.