Investing during tough times
- Investing -
By Karen Galarpe
(Note from Salve: I am away on maternity leave having finally delivered the baby last week! Friend and excellent writer Karen Galarpe will be posting articles while I am away. Be kind to each other guys! We’re here to learn and help each other.)
THESE days, it’s understandable to be more hesitant when it comes to investing. Those who made a nice good profit during the last bull run have seen their stock portfolio decrease in value. Same thing with people who have equity or balanced mutual fund or unit investment trust fund (UITF) placements. Values have gone down much more than one would want.
But according to Juanis G. Barredo, vice president of Citisec Online, “The right view is to look at today’s market as a potential to buy great companies at fire sale prices. Stock prices remain attractive at a discount.” Barredo spoke at last week’s first MoneySense Live! seminar organized by Money Sense magazine. The seminar, held at the AIM Conference Center in Makati, had the theme “Investing Profitably Even in Tough Times.”
Barredo quoted global investor Warren Buffet: “Crisis stems opportunity.” Indeed, blue chips are now more affordable, and if one is invested now in the stock market, you will benefit once the market goes upswing.
So when will we see positive growth in the local stock market, asked a participant. Barredo admits that is a difficult question. Rather than think of that, the question should be, says Barredo, “Has the market given a condition where you can make money?” If you are investing for the long term, the stock market is a good investment option. In the long run, it may yield good returns.
How much investment should be put in the stock market? Conrado Bate, president and CEO of Citisec Online, says, “the conservative approach is to invest up to 20 percent of savings in the stock market, or anything that you’re willing to invest for 5 years or more.”
An aggressive take would be to “subtract your age from 100. This should be the maximum percentage of savings invested in the stock market.” Doby Atilano, CEO of Howroyd & Benjamin (H&B), a pioneering independent wealth advisory firm, on the other hand, advises, “Do not put more than 10 percent of your money in something that goes up and down.”
