Posts Tagged ‘equities’

Safest Way To Invest

The featured article below would help those confuse people who got the money to invest but don’t know or have any idea on where to put it or perhaps just reluctant in finding the safest way to invest.
Take the query below as well as the answer to Edwin’s question.

Q: What’s the best way to save these days? I am expecting a big amount of money to come from the sale of a lot we’ve had in the family for a long time. With the global economic crisis affecting our economy, I want to play it safe yet grow my money. – Edwin

A: It’s good that you are thinking of protecting your money (your capital) by investing the proceeds from the sale of your lot. Investing your money may make it grow over time.

Understand, though, that with investing comes risks and rewards. If you want your investment to grow and yield higher possible returns on your investment, be prepared to meet setbacks and losses if they happen. Investments that yield higher returns come with higher risks such as heavy losses, as what stock market investors have realized last year at the height of the global financial crisis. Investments that have low risks may more or less safeguard your capital but give you low rewards as well (low interest income or minimal capital gains).

Bank deposits and government securities may offer you relatively safe investment options.

Bank deposits take the form of savings accounts, interest-bearing checking accounts, and time deposits. You deposit your cash in the bank and you get interest back after a month or so. While this may seem to be safe and will preserve your investment, this may not actually be the case as inflation may eat into your investment.

The current rate for savings accounts, for instance, is about 0.75 percent per annum. The inflation rate is way higher than that, which means that the growth to be yielded by your investment in a savings account will be overtaken by the rise in prices of commodities.

Time deposits may give better rates, but still may not be enough to match the cost of inflation. You may need to keep your money on deposit for a longer term to achieve a higher rate of return.

As “The Citibank Guide to Building Personal Wealth” (a book published by Citibank) says, “Inflation is a major risk if you hold large sums of cash permanently, because it reduces the buying power of cash.” Put simply, inflation may erode the value of your investments over time.

We mentioned government securities above. These come in the form of treasury bills, treasury notes, and treasury bonds. Bills have the shorter term (less than a year), and bonds have the longest term. Government securities are generally low risk since the government guarantees to meet its obligations and pay the published interest rate.

But since you mentioned that you want to grow your money, it may be wise to look into other forms of investment as well to achieve your goals:

1. Stocks or equities may give you high possible returns over the long term, but these come with high risk, which you don’t seem to want to assume at this time.
2. Bonds may also give you good rates of return, but these also come with some form of risk, although lower than that of stocks.
3. Pooled funds come in the form of mutual funds or unit investment trust funds (UITFs) and depending on their nature may be invested in stocks alone, bonds alone, money market funds (government securities and commercial papers), or a combination of these.

To keep your money safe and make it grow at the same time, we advise that you do what wise investors have been doing all along: Diversify! Keep some funds in bank deposits, some in government securities, and some in pooled funds. Since you may have other financial goals and may have a timetable in needing your funds later on (example, for retirement), we advise that you consult a financial professional who will assess your risk profile and suggest the best possible allocation of your investments.

You may also invest your money in tangible assets such as real estate property. However, market values fluctuate over time, so be prepared for any eventuality. Investing in a business also comes with a high risk as not all businesses realize income. Jewelry and art are also forms of investment, but bear in mind that it may take a while for their value to increase. Converting them to cash may also take a longer time should you find the need to do so.

Whatever investments you go into, study all aspects thoroughly. Look into the pros and cons before deciding. We wish you the best.
Entry Credit: http://business.inquirer.net/

*Disclaimer: Those who happened to read the article above are solely responsible for their own investment decisions and should consult professional advice from financial experts or analysts.Thegetwealthy.com will not be liable for any loss or damage caused by a reader’s reliance on information obtained from our web site. Thegetwealthy.com receives no compensation of any kind from companies or industries or funds that are mentioned above.

Will Philex Mining (PX) follow Meralco (MER) trend?

Big time stock market veterans might be on the verge of bid war in acquiring shares of ownership with Philex Mining (PX). Be expecting the two big group who are suspected to be responsible on Meralco’s (MER) sudden boom in price value for the past months will continue to do some bidding business!

To quote a post from pinoymoneytalk.com”

In just one week, the price of PX has ballooned by 36%, closing today (August 11) at P10.75.

Look at the recent 3 trading days’ price increase of PX:

* August 7: Closed at P9.00; up 13.9% from previous trading day
* August 10: Closed at P9.90; up 10.0%
* August 11: Closed at P10.75; up 8.6%

Are you interested in buying PX now? Buy at 10.50 or below. Target to sell at 12. But hold to buy at 9 just in case it goes south. Note, PX is quite into the bullish trend and our current market is not yet so BULLISH yet. So how much more if it is? Profit! This is just my view, if you take it, it’s up to you. Happy trading!

Today’s Stock Buzz- August 12, 2009

Profit taking caps gains by mining stocks

SELECT MINING issues managed to push up share prices yesterday despite investors pocketing gains due to lack of positive leads, analysts said.

The benchmark Philippine Stock Exchange index (PSEi) gained 0.34% or 9.96 points to 2,860.54, while the all shares index added 0.32% or 5.82 points to 1,813.28.

A total of 7.93 billion shares worth P5.45 billion were traded. Net foreign selling widened to P323 million.

Advancers led decliners 57 to 43, while 66 shares did not move.

“The upside came from mining-related stocks, led mostly by Philex Mining Corp.,” Eunika B. Maloles of 2TradeAsia.com said.

“The rally, however, was tempered by [profit takers] who took their cue from the [drop in Wall Street stocks on Monday night].”

Doreen Mijares of IGC Securities, Inc. said the PSEi’s gain was minimal since most mining stocks are not part of the index.

The mining and oil sector climbed the most yesterday, surging by 5.8% or 475.89 points to 8,670.36, buoyed mainly by Philex and Lepanto Consolidated Mining Co.

Philex jumped by 8.58% or 85 centavos to P10.75. Lepanto “B” shares, open to all investors, climbed by 6.45% or two centavos to 33 centavos, while “A” shares, exclusive to locals, also added 3.22% or a centavo to 32 centavos.

Both companies recently figured in newspaper headlines. San Miguel Corp. President Ramon S. Ang said he was interested in acquiring a stake in Philex. Lepanto, meanwhile, confirmed rumors that Hong Kong-based First Pacific Ltd. Co. is interested in making an investment in the mining firm.

Other mining-related issues that rallied yesterday included Nihao Mineral Resources International, Inc. that jumped by 16.66% or P1.75 to P12.25 and Abra Mining and Industrial Corp. that rose by 10% or P0.0005 to P0.0055.

But with the market having already reached an overbought level, Ms. Mijares said it is bound to correct, which explains the PSEi did not close higher despite reaching an intraday high of 2,873.53.

“Right now, our outlook for the market is it will continue to correct but it will not fall steeply since those investors who were left behind when the market was rallying will view whatever correction as an opportunity to enter,” Ms. Mijares said.

Profit taking also pulled down Wall Street stocks on Monday. The Dow Jones industrial average lost 0.34% or 32.12 points to 9,337.95.

At home, holding firms climbed by 0.41% or 6.25 points to 1,527.84.

The service sector added 0.35% or 5.10 points to 1,424.11, while industrial shares rose by 0.005% or 0.23 point to 4,419.53.

Financial stocks, on the other hand, dipped by 0.24% or 1.47 points to 603.02, while property shares slipped by 0.13% or 1.37 points to 987.33.

Blue chips closed mixed, with index heavyweight Philippine Long Distance Telephone Co. rising by 0.2% or P5 to P2,485.

Manila Electric Co. did not move at P262.50.

Ayala Land, Inc. was flat at P9.50, along with sister firm the Bank of the Philippine Islands, which stayed at P45.50.

Rival bank Ty-led Metropolitan Bank & Trust Co. remained at P38.50 apiece.

Andrew Tan-led Megaworld, on the other hand, lost 1.44% or two centavos to P1.36, along with Sy-led Banco de Oro Unibank, Inc., which dipped by 1.42% or 50 centavos to P34.50.

Entry Credits: http://www.bworldonline.com

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Rule of 72

Do you want to know how Compound Interest works for your money? Do you want to know how to double your money for a period of time say in years? Do you know about the RULE of 72? Do you want money work for you instead you working hard for the money? Do you want to get wealthy? Knowing the secrets of the wealthy is in your hand! Please read below:

Trivia:

“Albert Einstein called compound interest as the 8th wonder of the world and mankind’s greatest invention, because it is the mightiest force ever unleashed for the amassing of wealth”

How is Rule of 72 computed?

- It is dividing the value of 72 by the interest rate per period to estimate the number of years it takes for your money to double.

Example: If you have Php 100. When will this become Php 200?

Answer: W e have to apply the Rule of 72 and in depends on the interest rate where you put your money at.

* Scenario 1: Bank- it will give your money 1% interest rate per annum. But consider taxes, it might give you less than 1%, say .66% perhaps. This is on regular savings. You may get 4% interest rate per annum if you put your money in time deposit in the bank. Computation: 72/1=72. It means, it will take 72 years for your Php 100 to become Php 200.

* Scenario 2: Bonds- these are certificate of indebtedness issued by the government or any company who wish to borrow money from you with the promise to pay you out after a certain period (say 3 years) with a guaranteed interest rate. This is SECURED and NON-RISKY investment of your money. Most of them will give you 4% to 6% interest only per annum. Way better than 1% right? Let’s take at 4%. Computation: 72/4=18. It means, it will take 18 years for your Php 100 to become Php 200.

* Scenario 3: Stocks/Equity- these are shares or certificate of ownership issued by companies or corporations if you acquire a portion of their outstanding shares offered to the public. This is a risky investment but it may give you more than 12% or let’s say 100% or 200% or more of your money! But taking the risk is ok if you know how to manage your investments. Let’s take 24% rate of return. Computation: 72/24=3. It means, it will take 3 years for your Php 100 to become Php 200.

* Scenario 4: Mutual funds- it allows many investors (individuals, banks, companies, etc.) to pool their money and Professional Money managers will invest it in a diversified portfolio of securities (bond and/or stocks). It is recommended for NEWBIES who wants to try the stock market. It is “quite” non-risky or may be risky. So, it’s important to know what mutual fund to invest in. It may give you like 8% or more. It depends on how your Professional Money managers invested your money to give you the highest return possible. Let’s take 8%. Computation: 72/8=9. It means, it will take 9 years for your Php 100 to become Php 200.

There you go, that’s the power of Rule of 72. It is easy to compute. Now, you know already where to put your money to double it! It’s just choosing the options above, if you have questions or suggestions, you may leave a reply below or go to our FORUMS or chat with ME.