The Sky is Falling

This is how my Equity Mutual Fund weekly report looked like. Coupled with the stratospheric increase in inflation, this figure just screams, “You’re doomed!”

Am I?

Redeeming is out of the question. Bank interests are second to nil.

At times like these, what options do I have?

Advice, anyone?

My Mutual Fund – First Metro Save and Learn Equity Fund – 3

It’s been long since I last posted. I am now in Japan so I haven’t made any transactions with First Metro.

Anyway, stocks are getting a beating nowadays, so I was doing my ‘strategizing’ (in my newbie kind of way) on what to during these low times. Finally, after some thought, I decided to just stick it out and ‘forget’ about my investment. Yes. Forget. For the time being.

Why? Well, the logic here is really very simple. Humans are born emotional, and when it comes with their hard-earned money, the emotions spikes up to double, triple, or even a hundred fold! And guess what’s bad for your investment? Yep. Emotions.

So, as what most couples do to heal themselves during a break-ups, they forget, or at least try to forget. Then, after some time, when everything has settled, life becomes pink again.

I’d like to think of my relationship with investing as such. No rash actions. I just have to calm my thoughts and wait patiently until I make my next move.

—-

By the way, First Metro has a new website up and running. Their old site (www.fami.com.ph) has a dead link, I thing. Here’s the new site: http://www.firstmetrofunds.com.ph

My Mutual Fund – First Metro Save and Learn Equity Fund – 2

Today, I added some more shares for my FAMI SALEF but it will not be credited until maybe tomorrow. I usually just scan my investment form and deposit slip and send it thru email but their DSL connection is not running yet so they won’t be able to receive it. I guess I’ll have to send it thru courier.

Recently, the FAMI office moved from 20F GT Tower to 18F PSBank Center.

For those who are interested to visit their office, here’s the new address:

First Metro Asset Management Inc., 18th Floor PSBank Center, 777 Paseo de Roxas Ave., cor. Sedeno St., Legaspi Village, Makati City.

Their phone number changed too: (632)891-2860 to 65, but they retained their old fax number: (632)816-0467.

The market is down…

… and I think it’s time for me to buy some more of my equity fund shares.

Our company’s special bonus arrived two weeks ago and another one will be credited next week.

Scarred with my recent losses, I have decided it’s time for me to add to my FAMI SALEF shares. Although I don’t really follow a pattern with my investing, like monthly or quarterly, this way, I am sort of doing cost averaging.

So there.

Monday, next week, I will make a trip to the bank.

My Mutual Fund – First Metro Save and Learn Balanced Fund

July 20, 2007.

I bought some shares of First Metro’s Balanced Fund. At that time, the NAV was pegged at 0.9995 per share. However, First Metro doesn’t sell below Php1.00 per share so I bought at 1 peso.

Php40,000.00 less 2% (sales load) got me 39,200 shares.

Market is really really shaky because of the subprime lending scare. So now, I have losses in both of my FAMI accounts. As of last Friday, my balanced fund has a NAVPS of 0.881.

Now let me see. My shares worth has shrunk to a mere Php34535.20. The current market situation ate a huge 13.662% of my initial investment. Yikes!

I must admit, I am a bit worried, but during trying times, common sense is my best friend.

I told myself, “Stick to your plan, stick to your shares, your journey is just about to begin.”

Yeah. I’d like to think of this as the first speed bump in my journey into the world of investing.

Stocks Slides Down, and so?

‘Stocks continue to slide“  <— www.inquirer.net Business section headline 

————————— 

And so are my mutual funds. What do I do?

An investor overcome by emotion loses. I have incurred paper losses, yes, but common sense, of course, tells me not to sell. 

Why? Because, if I do, I would convert my paper losses into real monetary losses. Yikes!

Generally, I was not affected by the stock market scare last week. I am not a trader but a long term investor. So as long as I have decent returns when it’s ripe for me to redeem my shares then I will be fine.

Yep. Optimism really helps.  

My Mutual Fund – Prudential Optima Fixed Income Fund

My first ever mutual fund was with the Prudential Optima Fixed Income Fund.

For my first investment, I shelled out Php10,000 (min. investment is Php5,000). 2% was taken out as sales load so I was left with Php9,800 to purchase the shares at 1.2133 equivalent to 8,077.14 shares.

So let me see, as of July 20, last Friday, Prudential Optima was worth 1.4041 per share. My Php10,000 is now worth Php11,341.11. That’s around 13.4% return in 14 months.

Im happy.

——

Important:
Contents of this post is personal and does not endorse Prudential Optima. For information about their products you may visit their website at http://optima.prudentialife.com.

My Mutual Fund – First Metro Save and Learn Equity Fund

Last year, I made my first mutual fund purchase.

It was with the First Metro Save and Learn Equity Fund (FMSALEF).

I started small, just placing a little over their minimum of Php5,000. I had saved up Php6,000 from my minimal workers salary for the first 4 months in my job. It was really teeny-tiny since after the 2% sales load, I was left with Php5,880 to invest, but I was really excited with it. Anyway, that money bought me 3,990 shares at 1.4735 NAVPS (Net Asset Value Per Share).

I have made subsequent purchases of SALEF after that. As of last Friday, June 20, the NAV for SALEF was pegged at 2.3544 per share. My Php6,000 is now worth Php9,394.05. That’s 56.6% return after a year and a month.

Not bad, really. Considering a time deposit would give me only 3.5%.

———–

Important:

I am not directly affiliated with First Metro Investment Corporation. If you want to get more information about their products, you can visit their website at www.fami.com.ph.

Cheers!

What is a Mutual Fund?

There are a number of ways to keep your money.

Aside from the usual savings and time deposit, you may have heard (or not) of an instrument called mutual fund.

This industry is relatively young in the Philippines as compared to older economies like the United States.

I visited www.icap.com.ph, the official site of Investment Company Association of the Philippines and here is how they defined Mutual Fund.

What is a Mutual Fund?

A Mutual Fund is an investment company that pools the funds of many individual and institutional investors to form a massive asset base. The assets are then entrusted to a full time professional fund manager who develops and maintains a diversified portfolio of security investments. People who buy shares of a mutual fund are its owners or shareholders. Their purchases provide the money for a mutual fund to buy securities such as stocks and bonds. A mutual can make money from its securities investments in two ways: a security can pay dividends and interest to the fund, or a security can rise in value. The fund passes any dividends, interest or profits on the sale of its portfolio securities, less fund expenses, to shareholders in the form of distributions.

In the Philippines , there are currently four basic types of mutual funds—stock (also called equity), balanced, bond and money market funds. Bond funds invest primarily in bonds such as treasury notes issued by the Philippine government and commercial papers issued by reputable companies in the Philippines . Having a full basket of only fixed-income securities, bond funds provide capital preservation while maintaining a conservative stance in terms of asset allocation. Like bond funds, money market funds also have a conservative stance since they have a full basket of fixed income funds. The main difference lies in the term of investments of money market fund investments, which is one year or less. Equity funds invest primarily in shares of stock issued by Philippine corporations. The dominance of stock issues within the portfolio positions the fund to attain a more aggressive rate of growth. Balanced funds invest in both shares of stocks and bonds, thereby accessing the growth potential of stocks tempered with the presence of secure fixed-income instruments. Professional fund managers create value for shareholders by providing superior yields within controlled risk exposures. Certainly, expective in both security selection and asset allocation go a long way in ensuring better long-term rewards for mutual fund investors. (Source: Investment Company Association of the Philippines)