The Stock Market is on SALE

A lot of people are worried today because of what’s happening with our stock market.  Well, the market has never been neutral.  It’s either high or low.  We can never have a balanced market at all.  These worried people are those who have invested when the market was high.  Emotionally I totally understand your dilemma.  I also started with that kind of feeling.  The secret is not to be totally attached to your investment.  

 

But “I want to give reassurance that PSEI will go up”, says Mike Manuel the Chief Investment Officer of Sun Life Financial Philippines.  If you look at the past 9 years the effective compounding growth rate grows every year. This is the assurance that when you put your money on the correct fund allocation depending on your risk profile it will surely grow you will never know it. 

 If you look at the PSEi from Dec 2009 from the time that it showed a dramatic collapse, we can see that it has showed a favorable growth until now.   

Just Take it Easy

Investing in the stock market has grown more than double.  Do n’t be frightened by the volatility because it is included in the experience of investing.   Just keep it there because chances are you can double your money in 5 years or if not, wait for a little while it will have a significant change. That is one of the legitimate ways of gaining your money.  In fact, the pockets of volatility are what the wise investors are waiting for in the market. 

Today, it might be down but wait for the moment that it will go up. Last Friday, it was 8200 coming from 9000.   But when you look back the market it is always rising.

Does economic growth support expansion?  One thing is for sure is a force for growth with the TRAIN law and infrastructure spending with all the plans of this administration. The question is kapag tumaas ba GDP tataas din ba  yung pera natin sa stock market? Ang sagot jan Yes, GDP is composed of 4 things, consumption, investment, government spending,net fix form.

What is happening?

GDP is a broad measurement of a nation’s overall economic activity – the godfather of the indicator world. (investopedia)  As of the moment the Philippines GDP is at 6-7% (rappler). You have heard the news that we are the top 3 best countries to be invested in the world. The GDP or gross domestic product of a country provides a measure of the monetary value of the goods and services that country produces in a specific year.  

This is an important statistic that indicates whether an economy is growing or contracting.  How do we measure the GDP? This can be calculated using an income approach or a spending approach and by adjusting for inflation. However, GDP as a measure also has its drawbacks.2

Now, what do we do with our extra money?  Here are our suggestions to you. There are a lot of instruments that you can put your money into.  You can put it in the VUL policy which will give you insurance and investments or you can plainly put it into mutual funds.  The choice is yours! But what we need you to do is to make sure that your money is growing while you are sleeping because we do not want you to get left behind when the tides of our economy goes high soon.

What’s our number?

We are the second best growing country in the world in terms of GDP from China and India.  Why is this very important. When you invest in the market, you invest in the market that has a growth. If the market is growing you can buy low and sell high.  This is the basic principle.  When the GDP is good. what we are seeing it supports the generation of companies in the stock market on the earnings per share.  What unique in the GDP in the Philippines comes from the consumption.  In with what happen with train law being executed what happens here is adding money to the pockets of the Filipino people specially in the middle and upper class.  It easily creates money for this people to be used in spending depending on the level of pay.

Where are we going?

Jobs report in the US turned out very good.  This means that there would be more work for Filipinos.  More work more capability for laymen to bring more money to their families. 

More consumption is expected, thus, inflation is expected to go up.  Meaning, a lot of people are demanding to use the product and services that creates interest for the people to spend. For this obvious reason the interest rate is anticipated to rise.

Now what should we do?  We see the numbers, it almost evident that we can never stop the growth of the economy.   Christmas is coming and we will expect to increase on demand of the products and services that will create the influx of the economic growth.   If I were you, I would save your money and invest it right now. 

Sources:

1. http://bit.ly/2DFGcJW
2. investopedia

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