|
For two
weeks now, the news of the financial turmoil in the US
has been badgering all of us. The anxiety it has caused
is really overwhelming to many since we all know that
whatever happens to the US has very big effects
worldwide, including the Philippines.
I must
admit that I’ve been glued to Bloomberg this past two
weeks more than I ever was. The bailout package is what
everyone is looking at. Will it push through? Only time
can tell.
While I
do not discount the fact that whatever the outcome in
the US will have an impact on us, we should all try to
put everything in its right perspective. In fact, there
is a view that the Philippines can even come out ahead
of this if we pay our card right, as brightly written by
analyst John Mangun in this paper weeks ago.
With
regard to our personal investing, I am sure many are
afraid to invest. I was told that there have been a lot
of bank withdrawals and unit investment trust fund and
mutual fund redemptions in the past two weeks. The
atmosphere is still far from being in “panic,” but this
development is a big concern.
Actually, most of the investments available here were
not invested abroad and have very minimal exposure to
the subprime mess. Even the local subsidiary of AIG,
Philamlife, has a different set of books and investments
than its mother company. Life-insurance policy owners of
Philamlife can be assured that they have substantial
reserves to cover their obligations and most are
invested in local fixed-income securities, as mandated
by the Insurance Commission.
What
should we do now? Well, continue to invest. We should
not be deterred in achieving our investment objectives.
However,
we may consider altering our investment strategies if we
are not comfortable with what we have at the moment.
In my
opinion, you can do two things right now. First, if you
feel that you would like to be shielded from all these
uncertainties, you may want to move your investments
into cash or near-cash placements like T-bills, T-notes,
special deposit accounts, etc. Some say cash is “king.”
Second,
and only for those who have a higher appetite for risk,
you may want to consider some bargain hunting amid some
blue-chip stocks. However, if you are already invested
in the equities market prior to its slump, it is unwise
to cash in your investments at this time as it will be
very difficult for you to make any recovery.
Am I
saying that the equities market will be picking up any
time soon? Well, not really. While there may be analysts
who say the market is at its lowest and it’s now time to
buy, I would not be too eager to jump at this
point—unless you really want to be maverick in your
finances. There are just way too many variables at this
time, but as they say, there are always opportunities to
be realized.
With all
of these happening, it now makes more sense to maintain
a properly diversified portfolio. Further, and more
important, we must have the right mindset in our quest
to be financially free. When you look at those who are
financially comfortable today, you’ll be surprised that
many of them are not really financially savvy—but all of
them have the proper mindset.
Most of
all, let us be steadfast amid the madness. I always look
for haven in God’s words whenever I feel troubled, and
the verse from Psalm 46:10 stood out, “Be still, and
know that I am God: I will be exalted among the heathen,
I will be exalted in the earth.”
On
October 29, I will have the honor of sharing the stage
with three of the country’s most sought-after speakers
and trainers as we try to make sense of how to
weather-proof your personal finance. It’s really about
knowing the rudiments of personal finance while having
the right mindset that will make us truly free.
The
three other speakers would be lifestyle trainer Chinkee
Tan, investments expert Efren Cruz and the country’s
premier motivational and inspirational guru Francis
Kong. For particulars, you may call the Registered
Financial Planner Institute at 634-2204 and look for
Rachelle.
****
J.
Randell Tiongson is personal finance coach and educator
and the president and COO of Personal Finance Advisers
Philippines Corp. He is a director of the Registered
Financial Planning (RFP) Institute Philippines and has
been engaged in the various facets of the
financial-services industry for two decades. He is also
the cofounder of www.income-tacts.com, an interactive
site dedicated to the financial literacy of every Pinoy.
For inquiries on training, speaking engagements and
consultancy, you may send an e-mail to randellt@gmail.com.
Catch “Pesos and Sense: Weather Proofing Your Personal
Finance” on October 29 at the Makati Sports Club with
Chinkee Tan, J. Randell Tiongson, Efren Cruz and Francis
Kong. Join the 13th RFP Program (January 17 to March 7,
2009). Visit www.rfp-philippines.com or inquire at info@rfp-philippines.com/Tel.
no. 634-2204. |
