Abelardo “Billy” Cortez l December 26, 2024 l Business Option, Manila Bulletin
Today, technological, economic, social and financial trends are rapidly reshaping the financial world. Personal assets in Asia continue to grow, pushing capital markets to continue playing their greater role in the Asian region.
As you get nearer your retirement age, it’s a good time as any to start getting serious about your financial future, meaning, to start saving now regularly with a fixed amount of extra cash you are comfortable with for your personal financial planning. The chunk of cash must be saved while you still receive cash flows from your current job or profession. Wise is the investor who would see to it that his hard-earned money will now work over time. It’s definitely worth doing.
To start off with your new personal financial objective and you don’t intend to do the investing yourself, you must then look for a qualified, transparent portfolio manager with utmost integrity which, by the way, is the famous global investor Warren Buffett’s consistent advice to all his global fans and followers that character integrity must and should always be considered first before anything else.
The global financial market remains unpredictable and volatile. If your investments are not well- diversified, the likelihood of you getting burned will always be there. Risk, as we know, is a constant companion of investing. Yet the sad fact is, many new investors feel quite vulnerable, for some reasons of their own, hence, they prefer simple explanations, simple numbers that are not even conclusive and, consequently, raise false expectations on their part. It is therefore useful and imperative to make yourself as a newly-minted investor to be more knowledgeable on investment markets and profit opportunities; this will serve you well during investing situations you may often encounter in the future. Moreover, this will give you added confidence you need to avoid costly mistakes as you try to earn money on your own, or, even with a portfolio fund manager. Most new investors, as observed, whether on their own or through others, are predictably confused what to expect from their investments and therefore appear baffled and uncertain on how to achieve their own financial well-being, even if they also intend to entrust management of their own funds to professional fund managers.
To avoid further the negative situation of analysis paralysis, you must honestly asses your own financial situation. Pull out all your bank account statements, initial statement of retirement account (if already available) and also check out other possible sources of extra cash from individuals or corporations for the extra capital you may need in this new chapter of your life as an investor, whether passive or active.
Meanwhile, the most important moves you should focus on, along with strong financial discipline, are to save, track your expenses, and strictly live within your means. That’s being smart and sensible when you want your excess funds to be, at least, invested most of the time.
Also when for the first time you are undertaking investment activities, you should not hesitate to seek guidance from honest, experienced, and knowledgeable persons on the basics of investment management because, sometimes, for variety of reasons, pro-forma financial statements given to you fail to convey clear financial goals. For instance, when a potential portfolio manager promises higher than average rate of return, you should scrutinize it closely if his promised investment scorecard carries, or, hides a higher degree of risk. If you strongly feel some real concern on the safety of your own funds, then, you would be better off leaving your excess money in an insured account from very few but strong and stable financial institutions.
Investing is rather simple, half of the battle is just learning and understanding the basics of investing. Simple things are just made to appear complex.
Let’s be straight about this: Be fully aware of defensive measures to protect your money and avoid becoming a financial cripple.
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Atty. Abelardo “Billy” Cortez has over 30 years of experience in international and local banking (treasury, trust, private banking). He’s formerly FINEX national president and former chairman of the Philippine Capital Market Development Council. He is an independent board director at First Metro Investment Bank’s companies/subsidiaries (Metrobank Group). He’s an awardee of the Most Distinguished Bedan Alumnus in the field of banking and finance from San Beda University. Photo is from Pinterest.