“Do not put all eggs in one basket”. This is a very famous quote from the world’s famous investor, Warren Buffet.
Did you know that this is also biblical?
Ecclesiastes 11:2 “But divide your investments among many places, for you do not know what risks might lie ahead.”
If you want to diversify your investments, start your mutual fund account now. Here are the advantages of investing in mutual funds.
Imagine you are able to hire professional managers to analyze the various investment products in the market. Most of us kasi would want the best investment for best returns. However, because of many choices and factors to consider, we might end up into “analysis paralysis”. So why not let the expert do it.
Low Capital Requirement
Most direct investments have high initial capital. For example, treasury bills range from Php 100k to Php 1M. Kapag stocks naman, it depends sa board lot and the current market price before you can own a share. But for most mutual funds, it only require Php 5,000 for initial investment and minimum Php1,000 for additional investments.
All investments have risks associated with it. In order to minimize that risk, you have to diversify. Mutual funds offers instant diversification because the fund is required by law to invest in different securities.
Ibig sabihin nito ay dapat readily available ang cash if kailanganin mo. Sa mutual fund, once gusto mo nang ibenta ang shares, the mutual fund company will buy back the shares based on current net asset value or NAVPS. Di mo na kailangan maghanap ng buyer. Di ba sa ibang investments, kailangan may buyer ka muna bago mo ma liquidate ang investment mo? Sa mutual fund hindi na.
Marami ang takot mag invest kasi iniisip nila ay hindi safe ang pera nila. They rather put it safe than earn higher potential returns. Pero sa mutual fund, regulated ito ng Securities and Exchange Commission (SEC). They are not allowed to invest in products that is not legit. Also, they need to submit regular reports to SEC and to shareholders.
Potentially Higher Returns
Because mutual fund is professionally managed, it can take advantage of certain economies of scale. For example, pwede sila mag negotiate ng lower broker fees or mag ask ng higher fixed interest rates kasi hawak nila ay billions of money under managed.
Applying can be convenient with the help of a Certified Investment Solicitor (CIS) especially if you are an OFW. If you want to know how, read the step by step here.
Gains are tax free.
I hope by this time, you are convinced to start your investment in mutual fund. Remember to put a goal why you want to invest in mutual fund, and define your timeline to assess which fund type is best for you.
- 1. If you are an OFW or kahit nandito sa Pilipinas at walang oras makapunta directly sa mga Mutual Fund companies, we are more than glad to assist you in opening your account. Please email us at firstname.lastname@example.org or message is in our Facebook page: https://www.facebook.com/TheCristobal.info/
- 2. Grab our FREE ebook “How to understand OFWs and help them go back home”. Many have read and applied the principles we shared in this ebook. Grab it here.
Source: Rampvers Strategic Advisors