Investment Ideas

Investing In Mutual Funds

(Updated 23.May.20)

There are many investment products out there where you can pour your money to earn a passive income. By definition, passive income is money collected from a business that you have not actively participated in its day to day operations.

One particular investment product that I have personally invested in is Mutual Funds (MF). Mutual Funds are professionally managed investment products, registered under the Securities and Exchange Commission. It pools together a collection of assets – generally stocks, bonds, cash, or a combination thereof – held by multiple shareholders to invest.

Types of Mutual Funds

Mutual Funds are categorized according to where the pooled assets are invested. There are different types of mutual funds to match your financial goals.

  1. Equity Index Funds – Money will be invested in stocks that are components of the PSEi. One of my investments is of this type.
  2. Equity Funds – Invest in individual stocks listed in the Philippines Stock Exchange. The remaining 2 of my MF investments are Equity Funds.
  3. Balanced Funds – Money is invested in a combination of both individual stocks and bonds.
  4. Bond Funds – Invest in bonds issued by corporations and the Philippine government.
  5. Money Market Funds – Invest in short-term time deposits, corporate bonds, and government securities.

Advantages of Investing in Mutual Funds

  1. Professionally Managed -The money that you have invested will be managed by professional fund managers who are experts in making investment decisions. Investing in MF is way easier and safer than directly investing in stocks yourself.
  2. Small Capital – The initial capital is only P5000, and you can add a minimum of P1000 thereafter to increase your investment.
  3. Diversified – Your money will be invested into a variety of assets hence minimizing the risk of losses.
  4. Easy to Withdraw – You can easily redeem your investment at any time.

My Investment in Mutual Funds

My Mutual Funds so far have posted a reasonable profit. I have started four months ago around P100,000 capital and have earned between 10,000 -12,000 pesos so far.

My Mutual Fund portfolio with COL

Getting Started

  1. Open and fund an account with COL. Follow the process in How to Open an Account in COL Financial?
  2. Start buying Mutual Funds of your choice. The easiest way to select which fund to invest is to check its past performance. You can visit the website of Philippine Investment Fund Association to make a comparison of most mutual funds available in the market.

My Investment Update (23.May.20)

It has been four years since I started investing in the stock market. There was a point when my investment had reached around 400,000 pesos. I have tried long-term investments through Peso Cost Averaging, Equity Funds, and Strategic Averaging Method (from Truly Rich Club). I’ve also ventured in day trading for a few months.

After three years of opening my account, in 2019, I have started diversifying my capital and pulled out almost all my money in the stock market. As of writing, I only have 34,000 pesos left in my COL Financial account.

I feel that stock market investment does not fit in my financial goal. It does not satisfy my need to have a steady income source that I require after my planned retirement. This does not mean that the stock market is not suitable for you, as we have different needs and goals in life.

I will have a separate article on the Lessons I Learned from Stock Market Investing and will be posting soon.

Disclaimer

EarnPeso holds no control over your financial fate. It is here as a guide. Exercise prudence in every investment or business you undertake, and success will follow.

I hope this article encourages you to start your own business/investment. Click the links for Business Ideas and Investment Options for more insightful essays.

Do you have any questions? I would love to hear from you. Please leave a message in the comment box below or follow and message me on Facebook.

Reference:
1. COL Financial

Categories: Investment Ideas

Tagged as:

2 replies »

  1. Hello kuy, for mutual funds po magkno po dapat ang buyig power mo para makabili? Example po sunlife equity.? Salamat po

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.