To Our Valued Investors,
For the past weeks, we released a series of newsletters providing Cocolife Asset Management, Co., Inc.’s operational and investment strategies in the backdrop of the ongoing COVID-19 crisis. To keep our valued clients abreast of current events, we would like to provide updates on the Philippine Stock Market’s performance.
The 2020 stock market crash, instigated by the coronavirus outbreak, ended the 11-year bull run of Philippine equities. Such event was not only a rare case as capital markets across the globe tumbled amid the extreme volatility. Note that the local market has overcome huge corrective waves in the past, including the Asian and Global Financial Crises. Below is a table illustrating how the PSEi recovered from the previous bear markets:
|Market Event||% Correction||% Post-correction rally|
|1989 Coup attempt / Black Monday||-51.00%||110.00%|
|1997-1998 Asian Financial Crisis||68.81%||143.39%|
|2003 EDSA 2 / SARS outbreak||-59.18%||257.03%|
|2007-2008 Global Financial Crisis||-55.21%||324.18%|
|2013 Super typhoon Yolanda & QE Taper||-21.50%||39.96%|
|2015-2016 Fed Rate hike / China slow down||-25.20%||33.43%|
|2018 US-China Trade war||-24.87%||23.45%|
|2020 Taal Eruption & COVID19||-45.09%||28.61% so far (April 15)|
Source: CAMCI – Equities Dealing Estimates
Disclaimer: Historical performance does not guarantee future returns
As we have stated from our previous newsletters, windows of opportunity present itself in a volatile market. The current market weakness may warrant a certain level of cautiousness, but should not deter one from investing, especially for those with long-term investment horizon. Accumulating for the long-term, especially for those with excess cash, can ride the current market trend, in anticipation of an eventual recovery. It is true that there’s a possibility that we have not yet reached the bottom of the market downturn. But it is also true that it is difficult to time the market. Further, we may note that the greatest returns were made by investing for the long-term. The price at which we bought a share was not important. What matters is how long we hold it. Holding investments for the long-term was the most effective strategy to tide over the volatile market. So we are encouraging our valued investors to INVEST NOW! Remember, time in the market beats timing the market.
Depending on one’s risk tolerance and investment horizon, you may consider investing or adding position to United Fund, Inc.
UFI is a growth-oriented mutual fund which seeks to maximize income and maintain liquidity of investments, through a diversified portfolio of listed equity issues. This is advisable for investors who do not have the expertise or time to manages their own funds. Clients are also able to maximize their profit or earnings given the power of pooling the funds together even with a small capital. Clients can invest in UFI for as low as 1,000 (initial investment) and 500 (subsequent investments), and reap the same percentage as those who invested with a higher amount.
Please always feel free to contact your Certified Investment Specialist or our Investor Relations Officer for your needs and concerns.
Thank you and stay safe!
Mr. Artemio A. Tanchoco, Jr.