All About Financial Planning - Philippine Setting

Assuming that we already have all the knowledge and learning we need prior to making that one big leap of finally investing, now comes one of the tougher questions to answer. Where should I invest my money? It’s as common as choosing what bank would you put your money into. There will be factors like Company Name, Location, Stability etc. But how do you relate this to investments like mutual funds or VUL?

That’s exactly the same question Erwin Apao have in Mind.  He sent us an email asking what are the basis in choosing for a Mutual Fund Company.  And that’s what we’re going share them to you.

Here it goes:

I’ve read your articles and I found a lot of information about Mutual Funds (All about Financial Planning - Philippine Setting). I’ve been reading articles, books and watch videos about Mutual Funds. Currently I found your website which contains a bunch of information on investments.

I’ve been also checking the ICAP for Mutual Funds performance. But I’m still confused as how to choose the right Mutual Fund Co. for me. I would like to start for the amount of 10,000.00 and will do Peso Cost Averaging for 3-5years time or longer and I’m aiming for Equity Fund. I’ve researched Equity Fund, Balanced Fund, etc and I’m aware of their differences. My choices are Philequity (Philippine Equity Fund) and Sun Life (Sun life Prosperity Funds).

My questions are;

* In choosing a Mutual Fund Company, will their performance be the basis?
* Is there any additional basis besides there performance, what are those (if there are any)?

Here’s our answer:

Hi Erwin,

Thanks for visiting my blog and hope it helps you in your future investments. To answer your question, I’ll probably share how I chose mine.

First and foremost, yes, Performance is a very good basis. It will not only show you the growth performance, but the ability to recover also. Other funds may show a very aggressive investments and performance but may also equate to negative impact when the market is down.

Another factor that I base my preference is the age of the company. Is this a new company? How long have they been in the business? Who’s their mother company if any? Most likely they will back them out should the worst of the worst happens. And if there’s a way that they can divulge their investment portfolio to you, the better. Knowing where these investments go will give you an idea how it works and a feeling of security at the same time.

Third important factor you may also want to check is their Board of Directors. Knowing their years of service to the company as well as their previous performance can give us an idea how will they handle the company in the succeeding years.

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