Money Matters: The Philippine Market Outlook 2017 and the Small Investor

As a newbie investor, I try my best to understand the processes involving my investments. I find that it’s good to know how the market is and where it’s going,how the peso is performing, and how the current world issues are seen to affect the local economy.

I can’t speak for other investors, but I like knowing what to expect from my investments and whatever could cause its increase or decrease. I find that it gives me the opportunity to figure out my way through and maximise my options as an investor.

Wall-street

I may have not been able to join Sun Life Financial’s Market Outlook 2017 Press Briefing last January 25, but I was able to catch the livestream of the Q & A with Sun Life Chief Investment Officer, Mike Enriquez, and SLAMCI President, Riena Pama, over Facebook, thanks to Arnel Bautista of KAMD Media.

Numbers say that our economy is doing well

Obviously, I did not get to see the charts presented during the briefing which Mike Enriquez referred to during the Q & A, but I understand that the economy is doing quite well over the past few years despite how daunting it appears on social media and the internet, as a whole.

Not that the finance industry players are ignoring the significant events happening all around the world and within our territories, such as the election of Donald Trump as President of the United States and his withdrawal from the Trans-Pacific agreement, the highly controversial Brexit, and our very own president’s diplomatic relations (or the lack thereof) with some countries, but numbers do not lie.

If there is anything that stuck with me during the Money 4 Life series that I attended with Sun Life, it’s that.

And that despite the financial difficulties Filipinos face in the recent years, our GDP rates are high. Filipinos are buying and our economy is doing well because of it.

Of course the finance industry is continuously monitoring the dollar performance, we’ve yet to see what would happen to the dollar under the Trump leadership, but Mike Enriquez assures the media that the “consumption drivers” will continue even with the dip in the oil industry last year that cost many Filipinos working in the Middle East their jobs. He says that the government’s planned infrastructure projects will create the capacity we need to achieve an 8-9% growth in economy.

Mike Enriquez also says that the biggest problem that the government is facing regarding these infrastructure projects is absorbent capacity, which could as well be a turnaround for those who got laid off their work abroad as we need  them back in the country to help build these infrastructures. He added that it may “add boost to the consumption, but in a different currency,” meaning, not in dollars, but in pesos.

Dollar or Peso investments?

Riena Pama advises, “do not put all your eggs in one basket.” She encourages investors to diversify their investments.

However, she says that for people that have dollar remittances and need dollar income, it is only right to have dollar investments, especially when they are supporting family who live in the United States.

Dollar investment options

Riena Pama mentions two dollar funds Sun Life introduced last year: The Wellspring Dollar fund and the World Voyager fund which both performed well in the market in 2016.

Dollar Wellspring fund is for those who need to receive income from their investment. Last year, it had a 1.4% loss return.

World Voyager fund allows you to maximise your dollars earning potential by “navigating through” various geographic markets” all across the globe.  This had a 4% loss return last year.

Both growth was seen from only 7 months performance in the market.

She also talked about the new dollar fund, Dollar Starter fund, which the company will be introducing this year which is a response to their clients’ retirement goals. They go long term for about 20-30 years.

Anyway, just today as I’m writing this blog, I read that the peso has slumped to Php 50 to a dollar, which makes these dollar investment options timely, in my opinion.

As Riena Pama says, the finance industry is anticipating a strong growth in the US. The Sun Life dollar funds will provide more options for investors to explore and invest in these markets, “even in small amounts.”

You can start a Dollar Starter Fund for only two thousand dollars, which is roughly around a hundred thousand pesos, and maintain it at 200 dollars monthly, or ten thousand pesos.

Small time investors be like…..

Whut??? I don’t have Php 100,000!

Now if you’re a small-time newbie investor like me and you barely understand how the stocks and investments work, chin up because that’s what the Mutual Funds are for.

You just need Php 5,000 to invest in Mutual Funds, and if the force is strong with this one, the starting investment will go down to Php 1,000. According to Riena Pama, this is an initiative that they’re waiting approval for.

Going back to how mutual funds is the answer for us “unsophisticated” investors, unlike in the regular stock market, you have a fund manager working on getting your investments in the right places for you. Your fund manager will be the one to, in Mike Enriquez’s words,  help “create wealth for you.”

Personally, I look at Mutual Funds in an entreprenuerial perspective. In my knowledge, it takes about two years for a business to see movement and for that to happen, you need to put in the work and the money, too.

It takes consistency and persistence to see your business succeed. Financial success does not happen overnight.

Food for thought, Mike Enriquez says that they have seen the market grow from just a 3 Billion peso market to about 10 Billion peso market over the last three to four years, and this growth is expected to carry on in 2017. 

Investment precautions

Understandably, a lot of Filipinos are being cautious about putting their money in investments given the opinions and the negative forecasts flying around in social media.  

The truth is that the economy is strong but Mike Enriquez says that it may not reflect yet on the equities this year.

The earning growth rate may not be what you’re hoping for, but this is the best opportunity to invest – while the stock prices are low. Because once they start rising, the asset prices will rise with it.

Then he drives a point by saying that investors should look at long term goals. Sun Life, he says, “does not trade securities for quick bucks here and there. 

Don’t expect your investments to earn in a week. The waiting could take as long as 7 years. It takes discipline and determination to see the rewards.

As for me, let me leave you with this quick video of motivational coach, Simon Sinek, talking about two types of people:

It’s good to know what’s going on with the economy and how the peso is doing, but don’t focus on the bad, instead, find solutions. Don’t make your financial decisions based on other people’s opinions, especially when these opinions are based on just a fraction of a much bigger picture.

Do your research, know the facts, take your position, start your investments and keep your eyes on the prize.

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12 Comments

  1. Agree, you don’t need to be rich to invest. BDO offers UITF for as low as P10k or you can choose the BDO EIP for as low as P1000. Nasad ako sa 1USD = P50, hindi siya good news if you are planning to travel at ang taas ng buying rate pero ok kung may dollar account ka na.

  2. I always believe in the value of saving and investing. I have four boys and they only have my husband and I to ask for help. This early, we need to invest for them or at least for us so by the time we need money, we need not bother them. I got a few mutual funds and I am very eager to get hold of my money na. Seven years pala waiting ideally. I thought pwede na 3 to 5 years.

    1. 7 years isn’t the “ideal” length. What I said was that it can take as long as 7 years. 🙂 It can take two years, it can take forever, it really depends on how the market is. What’s really important is that you start now.

  3. We started investing last year lang. And honestly I find it very late kasi we are both in 30’s na. Better late than never diba because it is for our son’s future din naman. How I wish I started investing when I had a regular work and money, oh well.

    1. That’s not too late, Mhaan. We started at 40 and we still have hope. Sa mga pinoy, maraming retiring age na and they have not invested on anything at all. Sad diba?

  4. I have a friend who’s a Registered Financial Planner and he has helped us realize why it is important to invest. He conducted a “check-up” and helped us plan our financial life as well. I am just so thankful that my husband and I were able to meet him at the time that we are just beginning to build our own family. After our financial planning session, my husband and I were able to open an insurance + mutual funds investment for him, an insurance for our first born son, my mutual fund account and by tomorrow, I am actually about to open an insurance for myself, too. I’d like to learn how to invest in the stock market rin sana but that time will come. 🙂 I know a lot of people, including my parents and siblings, who are struggling with proper handling of their financials and are afraid of investing. Sana mas marami pang magkaroon ng financial literacy, noh?

    1. Yeah. That’s actually my reason why I’m still blogging about it even after the Money 4 Life series I attended last year. I really think that people need to know.

  5. The word invest brings so much worry to a lot of people. They think that when they invest, they would need to have a lot of money to begin with. What they don’t know is that you can invest even in small amounts. And that they need to have a very good financial coach to help them as investing can be a risk – you can win, or you can lose.

    1. There’s lesser risk with it’s just MF because the company has a fund manager that does the work for you. It’s investing directly in stocks that’s tricky. 🙂

  6. I’m also an unsophisticated investor. Haha! I’ve studied some of these before but never really took them seriously because I find the topic so technical and hard to understand. I would love to invest one day though. It’s good to know that Sun Life offers many different investment options and that you can start investing with as little as P 5,000 for a mutual fund.

    1. It will actually go down to Php 1,000 very soon. 😉 And Ms. Riena Pama says they’re working on using technology to make it easier for people to open accounts, like optimising Skype etc.

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