Saturday, November 21, 2015

Mutual Fund: One Fantastic Investment Tool

Many Pinoys today, are starting to gain financial literacy.

Many Pinoys wants to attain financial security.

source: google


But, a greater number still don't know how to manage and where to invest their money.

Worse, many are lured to get-rich-quick-schemes and scams which really makes people scared to invest.

But the great news is there are some investment vehicles that we can ride to achieve wealth.

One is the MUTUAL FUNDS,

According to PIFA (Philippine Investment Funds Association):

"Mutual Fund is an investment company that pools the funds of many individual and institutional investors to form a massive asset base.   

The assets are then entrusted to a full time professional fund manager who develops and maintains a diversified portfolio of security investments.  

People who buy shares of a mutual fund are its owners or shareholders. 

Their purchases provide the money for a mutual fund to buy securities such as stocks and bonds.  

A mutual can make money from its securities investments in two ways: a security can pay dividends and interest to the fund, or a security  can rise in value. 

The fund passes any dividends, interest or profits on the sale of its portfolio securities, less fund expenses, to shareholders in the form of distributions. "

- http://www.pifa.com.ph/mf_101.html

   
source: moneysense.com

Mutual funds is like riding a jeepney. We let the driver/fund manager drive our funds for us, but of course there are limitations/routes to be considered.
Unlike in stock investing that we are the driver/stock investor that will control our funds.

However, entrusting your money to fund managers isn’t an alibi not to do your homework.
You still need to know out your tolerance for risk and have a wisdom of how MFs earn.

Here are a some things before you get started:

1. Mutual Fund based on integrity, track record of fund manager, time horizon

2. Choose a fund which is directly proportional to your risk profile

3. Know your financial goals.

4. Decide.

5. Start.

6. Be patient.

If you do the math, Php1000.00 per month at 12% annual return for 20 years is 1 million. It is 33% per day. :)

Be frugal and observant. Invest in yourself.
Self-investment has the biggest ROI.


for your abundance,

Charlon Elaurza, RCE
founder, Filipino Abundance Mindset

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