The COVID-19 pandemic has affected economies around the world, causing many people to be wary of investments or engaging in any financial commitment. However, this isn’t the first time this has happened. The world has dealt with several recessions in the past, such as The Great Depression, but people keep finding ways and solutions to bounce back. Even amid a crisis, it’s best to think of your long-term plans or goals, which will, in turn, enable you to invest intelligently.
Financial journalist Salve Duplito shared five time-tested ways on how to grow one’s money during the webinar, “The Right Investment Game Plan,” presented by AXA Philippines, one of the country’s leading insurance companies.
Buy investments with constant budget and schedule. This approach involves a pay-yourself-first strategy by doing peso cost-averaging. Duplito explained that this simply means to set aside a certain budget every month and invest it before you pay your electricity and water bills, groceries, and monthly dues. This way, you’re investing in your future first, and whatever remains of your money can be spent on yourself because you have already done the more responsible things. She added that this strategy would be more effective if it’s done automatically every month so that you don’t have to force yourself to invest.
Think diversification. Duplito said that the key to investing is to diversify, but do not “diworsify.” If you’re investing in stocks, it means you should limit your portfolio to 10 good stocks. She warned that investors should not settle for a one-stock portfolio because that is the riskiest thing to do. Opt to add some properties, bonds, cash, private placements, and professionally managed funds.
Avoid emotion-driven investing. Duplito said that investments stemming from emotions and impulsiveness are risky. When you invest, the recommended plan is to buy low and sell high, which is best done when you’re being objective rather than emotional. It’s also important to look beyond the market drop because long-term investments are intelligent investments. Be sure to analyze their soundness before buying in order to protect yourself from serious losses. It’s also advisable to aspire for adequate returns, rather than extraordinary ones, because investors who look for extraordinary returns are usually victimized by scammers or losses in the market.
Buy professionally managed funds. Professionally managed funds are personalized and specialized means of investment where you rely on a professional investment manager to help make investment decisions for you. Duplito recommended this because very few people are wired and suited for direct investment in the stock market. “Even I, who watch the market every day, put around 30% in a professionally managed fund every month,” she said. Duplito added that, by doing so, you have a safety net in case some impulsive decisions are made, or some investments may not work out as well as initially planned.
Look at your risks. When making decisions about investments, it’s best to weigh the pros and cons. Don’t commit to something without understanding everything and familiarizing yourself with what may be at stake. Duplito said that investing is not just about looking at your returns, but also learning about the risks.
Duplito added that these strategies assume that a person has an emergency fund good for 12 months, which is the first step in risk management, while obtaining life and health insurance is the next best step. With the right game plan and financial partner, growing your money even amid the pandemic is possible.
Reach out to an AXA financial partner to learn how to make your winning investment game plan. To get in touch with an AXA financial partner, visit https://www.axa.com.ph/appointments