Tuesday, September 11, 2018

A Beginner's Guide to Investing in Mutual Funds


If you have P100,000 and would ask me what I can invest it in, I would advise you without batting an eyelash, to invest in a mutual fund.   Forget about starting a business with your 100,000.  You know why?  If you really know what business to engage in, you would not be asking me anymore.   You know,  If you have attempted to start a business but failed eventually, then sometimes it pays to look in another direction.   Why go into business with a high overhead and end up with a deficit and eventually even go bankrupt?  There is a better alternative for people who are still surfing about the best business to start, your money is safely managed and it could grow depending on the market and economy.    

Now, you’ll probably tell me, but I have no idea what a mutual fund is; what if I lose money in the long run?  Well, this I can tell you, all businesses are risky and all businessmen are risk-takers.   Besides, all businesses need an initial investment, and so is the mutual fund.   Sadly, only a few percent of Filipinos know what a mutual fund is and how it works.   The science of mutual fund is still a vague concept to most Filipinos, but that’s the reason why there are financial advisers and fund managers.  




In a simple definition, a mutual fund is a method of investing by collecting money from many shareholders and this collected amount is used to buy stocks, bonds, money market instruments and other forms of securities and kinds of assets.   Any income derived from those assets bought will be shared according to the amount invested.   And fund manager is the one who serves as caretaker of your and the other people’s investments.  The entire collection is part of his portfolio.  The fund manager plans and decides what to invest in on a particular day or period. 



If you invest in a mutual fund, you must remember that this is a long-term investment.  It is advised to allow the financial institution to hold the money for a minimum of ten years to ensure growth.  Some financial institutions that offer this kind of investment method are insurance companies, pension funds, and banks.  Before you decide to invest in mutual fund, make sure the money is not part of your emergency fund or separate from your savings.  Once you endorse your fund money to the fund managers, you must allow them at least a period of 10 years to manage it for you. And one thing you must remember, the performance of the mutual fund depends largely on the market and the economy and only fund managers can explain why your investment earned, did not earn or decreased.   They are the only ones who can tell the different indicators of a good investment or bad investment.  

So before you part with your hard-earned money, do a little research and find out what company offers mutual fund.  Don’t stop there, check out how they invest and their track record.  Do they have a good reputation?  How long have they been in business?  What is the general feedback about their performance?  Are clients satisfied or you have heard many negative feedback about this company?  And if you have finally decided where to put your money in, call Sun Life Financial Philippines now, set up an appointment with their financial advisors and then you are on your way to big bucks after 10 or more years.  

Sun Life has 7 mutual funds (Prosperity Funds) which are all registered to the Securities and Exchange Commission and managed by Sun Life Asset Management Inc. (SLAMC). If ever you decide to open a mutual fund account with Sun Life, you can choose from these 7 mutual funds depending on your objectives, risk appetites and time horizon.

Start investing as soon as you can, because the earlier you do, the higher potential income you stand to earn. It may seem to be a struggle at first, but investing doesn’t have to be. Shake off the mindset that it’s difficult and costly. Rather, think about your future self and you'd be on your way towards financial freedom.

14 comments:

  1. Wow, I did not know that about mutual funds! I will definitely look into them after I pay down some debt!

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  2. I usually just invest in stocks that interest me. I have not done a lot of research on mutual funds. Thanks for sharing.

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  3. I had no idea about anything that had to do with mutual funds until I read this post, thanks for all the information.

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  4. I never looked into investing but this makes it seem more interesting. Thanks

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  5. So very true. My dad convinced me years ago to put away a largish amount of cash into mutual funds and it definitely paid off. So happy I listened to him

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  6. I've never invested in anything because it just seems like such a huge, time-consuming task... Thanks for the information!

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  7. I learnt something new today. I am now interested in investing in mutual funds. Awesome post.

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  8. I am not very knowledgeable about stocks, I let my stock broker handle this.

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  9. This is great info and details are new to me. Glad I read this need to look into it more!

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  10. Investing while young is so important to ensure financial stability later in life. Mutual funds are a great way to go!

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  11. I used to have a savings account that invested in mutual funds. It explains how I got better interest rates.

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  12. I heard so much about mutual fund but didnt really understand how it help us grow. Glad to learn so many facts here.

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  13. I didn’t know any of this so if was super helpful!!! I definitely need to look into more!

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  14. I have never invested in mutual funds but only in the stocks. Thanks for sharing this resourceful guide. Glad to know many points before considering to invest in mutual funds!

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