In today’s world, it has become overly helpful to have investment calculators aside from an advisor to guide you in making an investment decision. There are plenty of resources online that enlist factors, tips, and tricks in investing. Regardless of whether you already have an eye on the best dollar investment in the Philippines or looking into mutual funds, you should be able to recognize the risks that come along investing.  

In this article, we will equip you with knowledge regarding factors you must consider when choosing an investment, how talking to an Investment Specialist should help you, and several investments you can make depending on your budget. 

Factors to Consider When Choosing an investment 

A lot of people choose mutual fund investments in the Philippines according to their personal needs and goals. While this may be accurate, there are also other important factors that need to be considered before making an investment decision.  

Return on Investment (ROI) 

Return on investment is the profit an investor gains after investment costs have been deducted. In mutual fund investment in the Philippines, profit can be a shareholder’s fee that comes in the form of sales charges, commissions or securities such as stocks, bonds, money market instruments, and other assets.  

Volatility 

Volatility is the rise and fall of market prices. Your Investment Specialist should be able to help you understand the level of volatility and the impact they can make on the number of returns. Moreover, they will help you realize fluctuations in both national and international economic trends.  

• Highly volatile – the market goes through frequent swings or fluctuations. 
• Low volatility – the market or economy is stable 

Investing Risks 

When you invest, you must expect to be exposed to different types of risk. Here are several risks that can affect your investment returns so that you can be more prepared. 

Market risk 

The declining value of investments can be relative to events in economic developments that affect the entire market. The main types of market risk include equity risk, interest rate risk, and currency risk. 

• Currency risk 

This risk applies when you have foreign investments in your portfolio. It is the risk of losing money because of a movement in the exchange rate. To give you an idea, your U.S. stocks will become less valuable relative to Canadian stocks if the value of dollar exchange rates. Contact your Investment Specialist for the best dollar investment in the Philippines to make sure your portfolio will be able to withstand such changes.  

• Equity risk 

This type of risk typically applies to investments in shares. It is deemed loss because of a drop in the market price of shares entirely affected by the market share price, as determined by demand and supply. In such cases, equity traders in companies that offer mutual fund investment in the Philippines maintain resilience through risk management including careful planning of trades, diversifying and hedging, as well as calculating expected returns. 

• Interest rate risk 

The interest rate risk applies to debt investments such as bonds. It is the risk of losing money because of a change in the rate. To put it simply, the market value of bonds will drop to a bearish situation if the interest rate goes up. 

Liquidity risk 

Liquidity risk is being unable to sell your investment at the desired price if you wish to. In such cases, your Fund Manager should have knowledge on how to sell and buy investments before the state of illiquidity. 

Concentration risk 

This is a risk investors face when they concentrate their money on a single type of investment. If you diversify your portfolio to different types of mutual fund investments in the Philippines or dollar investments, you will be able to spread the risk and in return minimize loss of profit for one. 

Credit risk 

When it comes to bonds, credit risk is also something you should be prepared for aside from interest rate risk. In such instances that a company runs in financial difficulty, they may not be able to pay the interest or repay the principal at maturity. To avoid this, your Investment Specialist should be able to give you an idea of how low credit risk should go. 

Inflation risk 

One of the most common market risks when it comes to investing is the inflation rate. This risk states a loss in purchasing power due to investment value being unable to keep up with inflation. Share prices should therefore rise in line with inflation to guarantee some protection.  

Horizon risk 

Typical risk that involves a direct impact on you is the horizon risk. There is a risk that your investment horizon may be shortened because of an unforeseen event. Say, for example, the pandemic recently hit worldwide. The loss of a job or decrease in salary may force the selling of investments expected to hold for the long term. 

Investment Period 

The Investment period or term is the length of the investment that highly influences the return of profit. It can be short, medium, or long-term. There are mutual funds that allow for long-term and short-term investing. Take note, there is generally a higher return yield for long-term investments. 

Budget 

Finally, budget is a factor that investors should consider before choosing an investment. The budget determines how much money you can put in an investment asset for a short or long period of time. It is the capital that you will not need for emergency purposes. 

Best Investments According to Your Budget 

Now you know how to position yourself when choosing the right investment. Let’s walk through the best investments you can make depending on your capital. 

Investments in the Philippines under 1,000 Pesos 

If you are wondering if with just a thousand pesos you can make your money work for you, then the answer is yes! There are plenty of investments for beginners out there for those who are just about to test the waters. Here are some of them: 

• Mutual Funds 

Mutual funds are among the best investments in the Philippines, especially if you are a beginner and have limited time as well as expertise to monitor your fund’s performance. At Cocolife Asset Management Co., Inc., our professional fund managers should be able to provide assistance in managing your funds.  

• Unit Investment Trust Fund (UITF) 

Similar to mutual funds, UITF is an open-ended pooled investment fund handled by a fund manager. The main difference is that they are offered by banks and are thus regulated by the Bangko Sentral ng Pilipinas (BSP). 

• Stocks 

Investing your money in stocks refers to buying stocks of a publicly listed corporation and becoming one of its part-owners or shareholders. Investing in stocks is as easy as registering for an account online with CAMCI. If you lack the time to watch over the stock market and make the right decisions, specialists can also help you.  

Investments in the Philippines under 10,000 Pesos 

For those who are looking into spending more on investment, then with 10,000 pesos, you are elevating your ROI with the following investment vehicles: 

• Bonds 

Although bonds are considered low-risk investment channels that could gradually go up depending on the company you invested in, it is still better than just putting your 10,000 Pesos in a savings account. Bonds typically have a higher interest rate compared to deposit accounts, thus bringing in higher returns. 

• Mutual Funds 

If you have more than a thousand pesos, then investing your money in mutual funds yields better results. Your pooled money is cared for by professional fund managers and you can expect your money to grow in the long run.  

• Retirement Fund 

Regardless of whether you are drowned in responsibilities or not, take this opportunity to invest your 10,000 Pesos for your future. For some, retirement may be far ahead in time, but taking into consideration earning capabilities should help you decide whether you need to start now.  

Investments in the Philippines under 50,000 Pesos 

• Individual stocks 

You are purchasing ownership if you invest in individual stocks. To give you an idea, the best example would be purchasing 100 shares of a public company thus receiving a percentage of ownership in that company. The other way is to make money through dividends, which are the profits of the company paid to the shareholders. 

• Mutual Funds 

From money market funds to stock or equity funds and balanced or bond funds, there are plenty of investment vehicles you can get into if you wish to have your portfolio managed by a professional fund manager. Your 50,000 pesos, for the long term, can grow accordingly depending on your risk tolerance as advised by your financial advisor. So that from the beginning to the end, you will have the confidence that the money you invested is in good hands. 

• Insurance 

One of the best options people go for today is life insurance. If your goal is to secure your and your family’s lives, then a VUL or cash-value life insurance should serve your needs well. With this, you get the best of both investing and being insured. 

Discover the best mutual fund investments in the Philippines with Cocolife Asset Management Co., Inc that suits your risk appetite and budget! 

Thanks to mutual fund investments in the Philippines, your money can easily grow to any amount you want. While you know of the risks and factors to consider before investing, hearing advice or two from Investment Specialists should help you choose the best. Take note, combining the right investment vehicles to form a diversified portfolio can minimize risks.  

Finally, don’t be discouraged by your capital. What matters more is that you’re already taking the first step towards financial freedom. And that is knowing your best options.