How to Invest Your P10,000 in the Philippines

It’s not surprising that everyone wants to be rich someday. And the road to achieving that objective has to be paved today, not tomorrow, next month or next year.

That is why we chose that specific amount to start with: P10,000. Why? Because it’s one of the easiest amounts to save from your allowance, salary or bonus, to make a decent investment down the road. We can explore how to grow a P100,000 investment later, once we manage to to raise P10,000 to that amount.

Determine what kind of investor are you.

Are you a risk taker who wants to do things and never regret the outcome? Or are you the one who often plays it safe and scared to lose? Answers to these questions can help frame your fiscal appetite and ability to take on the ups and downs of investing climate and maximize potential income.

  • Conservatives – they often take a low-risk approach when investing their money. Their portfolio is preferred to provide a steady income even at lower yields. Their investments are best fit for time deposits, special deposits accounts and treasury notes or bills.
  • Balanced – they are have moderate attitude when it comes to investment risk. While they save enough for emergency fund, they are also willing to spend a portion of their money for capital appreciation, noting that it takes time to get substantial gains. They are a good fit at the stock market with investment at blue chip companies, whose stable reputation ensures guaranteed income from stock share price appreciation for years to come.
  • Dynamic – they are the most risk takers of the group, and don’t mind losing portions of their investments before they recover and earn healthy profits. They are keen on investment opportunity for growth such as emerging markets, startups and relatively unknown investment vehicles which makes them cheap and attractive for investment.

If you are still unsure what kind of investor do you belong, these factors may determine what is your investment preference.

a. Age
Younger investors have plenty of time so there is enough opportunity — five years, 10 years, 20 years — to test higher investment risks, fail and recover. Older ones, however, need to preserve their investments and prefer not to delve into high-risk-high-return investments.

b. Willingness to wait for investment yields
Time is a significant factor in investment as the longer you invest the higher the gains your investment might get.

c. Risk appetite
As you determine your willingness to take the risk as defined above, your decisions — and investment vehicles tailored for your taste — will also be more defined.

Going back to your P10,000 seed money ready for investment, here’s how where you can invest it:

a. Open a mutual fund account
A mutual fund is a type of investment where you join other individual and institutional investors pool assets into a massive fund to be managed by a professional called a fund manager. The fund manager will then distribute the fund across a diverse set of portfolios of stocks, securities, bonds and other mutual funds.

So instead of you figuring out which investment vehicles you should put your money into, the fund manager does that for you. Since he or she has a wider range of understanding in terms of fund performance, fiscal policies that influence stocks, and trends based on the market sentiment, your investment money is better placed.

Here are some of mutual funds available at COL Financial’s COL Fund Source:

Name Type Manager Risk
ATRKE Alpha Opportunity Fund Equity Fund ATR -
ATRKE Philippine Balanced Fund Balanced Fund ATR 5
ATRKE Equity Opportunity Fund Equity Fund ATR 7
ALFM Peso Bond Fund Bond Fund BIMI 3
ALFM Growth Fund Equity Fund BIMI 8
ALFM Money Market Fund Money Market Fund BIMI 1
Philippine Stock Index Fund Equity Fund BIMI 8
First Metro Save and Learn Balanced Fund Balanced Fund FIRST METRO 6
First Metro Save and Learn Equity Fund Equity Fund FIRST METRO 7
First Metro Save and Learn Fixed Income Fund Bond Fund FIRST METRO 3
Philam Bond Fund Bond Fund PHILAM LIFE 4
Philam Fund Balanced Fund PHILAM LIFE 6
PAMI Horizon Fund Balanced Fund PHILAM LIFE 6
PAMI Equity Index Fund Equity Fund PHILAM LIFE -
Philam Managed Income Fund Money Market Fund PHILAM LIFE 2
Philam Strategic Growth Fund Equity Fund PHILAM LIFE 7
Philequity Peso Bond Fund Bond Fund PHIL EQUITY 4
Philequity Dividend Yield Fund Equity Fund PHIL EQUITY -
Philequity Fund Equity Fund PHIL EQUITY 7
Philequity PSE Index Fund Equity Fund PHIL EQUITY 7
Sun Life Prosperity Balanced Fund Balanced Fund SUN LIFE 6
Sun Life Prosperity Bond Fund Bond Fund SUN LIFE 3
Sun Life Prosperity Equity Fund Equity Fund SUN LIFE 8
Sun Life Prosperity GS Fund Bond Fund SUN LIFE 3
Sun Life Prosperity Philippine Stock Index Fund Equity Fund SUN LIFE -
Sun Life Prosperity Money Market Fund Money Market Fund SUN LIFE -

To find out more, please visit COL Financial and open an account. Minimum investment amount is P5,000.

b. Open a UITF account
Quite similar to mutual fund is the Unit Investment Trust Fund (UITF), whose pool of assets from individual and institutional investors are managed, though, by trust divisions of banks instead of fund managers who do the job for mutual funds. However, the accumulated investment will also be used to buy bonds, stocks or combination of both.

Although UITF is handled by representatives from a bank, investment in UITF is not the same as depositing money into the bank, so it is not insured by PDIC, although it is supervised and regulated by the Bangko Sentral ng Pilipinas.

Based on data gathered from UITF Resource Center, here are the best performing Balance Funds for the first half of 2017.

Rank Bank Fund Name Return on Investment
1 AB Capital AB CAPITAL BALANCED FUND 5.76%
2 Robinsons Bank RBank Balanced Fund 2.67%
3 Philippine Bank of Communications BEST BALANCED FUND 1.76%
4 Robinsons Bank RBank Tax-Exempt Retirement Fund (A Balanced UITF) 1.20%

To apply for UITF account, you may approach bank trust representatives and inquire, or visit the bank’s official website for details. For example, if you wish to engage with UITF of EastWest Bank, you may visit its Investments page https://www.eastwestbanker.com/info/pi_main.asp.

c. Invest in stock market
If you have enough knowledge on how the stock market works, which publicly listed companies you’d like to be a shareholder of, and potential risks associated with investing in the stock market, this is one option you can take.

For as little as P5,000, you can start buying shares of established blue-chip companies like PLDT, San Miguel Corporation, Ayala Corporation or other company you think has more potential for growth. Visit COL Financial and open an account.

d. Invest in your professional development
Many Filipinos think that once graduated from college, it’s time to make money instead of pursuing further education which, of course, costs money. Since it takes a lifetime to be a learned individual, additional skills are always a welcome addition to your resume or enhance your business with pfofessional training.

Course Duration Fee Institution
Call center agent training 100 hours P8,500 BPO Training Academy
Java Programming Fundamentals 42 hours P7,800 MFI
Basic Photography 3 days P7,750 PCCI Institute of Photography

Conclusion
P10,000 may not be that big amount in today’s investment terms. It could well be spent on a weekend luxury staycation, new electronic device or treat the whole family to a weekend food splurge.  But if you have your mind set on investment, there are still plenty of opportunities where you can place your money into. If you can manage to grow a small seed money, there’s no doubt you can also manage to grow a bigger investment.

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