Where To Invest in 2014

Posted by Fitz Villafuerte under Investing on January 2, 2014

First of all, let me greet all of you a Happy New Year!

Today, we’ll discuss several investment opportunities that you can go into for 2014.

So I certainly hope you didn’t spend all your Christmas bonus and 13th month pay during the holidays, because the “Year of the Horse” will be an interesting year and full of opportunities in my prediction.

This year marks the second half of President Noynoy Aquino’s term, and I believe the government will do their best to bank on the investment grade ratings we received last year to leave a “good impression” for Aquino in 2016.

More than that, a lot of financial analysts agree that the emerging markets of Asia will have a better economic run this year.

This means foreign investors could possibly head towards our direction this 2014, especially with the Philippine economy as among the more robust and fundamentally sound countries in the region.

Anyway, you’re not here to read an economic report, but to know where you can put your money this 2014. So without further ado, here are in my opinion, the best places to invest in 2014.

Exchange Traded Funds

Exchange Traded Funds or ETFs are open-end investment instruments and have become the world’s fastest-growing asset class because they provide investors a diversified portfolio of stocks at lower costs.

I’ve explained what and how ETFs work here just in case you want to know more.

Currently, there’s the First Metro Philippine Equity Exchange Traded Fund, Inc. that’s being traded in the stock market. The PSE is hoping to list one or two more ETF companies this 2014 to join the First Metro ETF.

How to invest in Exchange Traded Funds? Simply open a stock market account and buy its shares like a regular stock company. The stock symbol for First Metro ETF is FMETF.

Please remember that you’re still investing in the stock market, which means ETF investing is high-risk and should be long-term. Additionally, cost averaging can work with ETFs.

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Personal Equity and Retirement Account

Currently, the Philippine Stock Exchange, together with the Trust Officers Association of the Philippines, has been conducting seminars and awareness campaigns on Personal Equity and Retirement Account (PERA).

You can check out my primer about the PERA Law here to learn more.

My hope is that it will finally be implemented in 2014, and if it does – I’ll certainly be investing here. BDO and BPI has posted information about PERA here and here – which makes me further optimistic that this will really happen this year already.

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For now, let’s just wait a little longer.

Balanced Funds

Investing in Unit Investment Trust Funds (UITFs) and Mutual Funds remain to be a good choice, especially for new investors. Among the different types of funds, I’m leaning towards Balanced Funds this year.

Balanced Funds invest in both high-quality debt and equity securities, and I believe they’re a “safe” choice for those who are looking to park their money for the medium-term, particularly in the next three years before the national election comes.

Investing in Balanced Funds is as simple as going to your bank and asking for their UITF products, or contacting your favorite mutual fund company and asking for their list of funds in this category.

Personal Learning

It may be a cliche, but you can never go wrong by investing in knowledge.

Last year’s stock market bull run produced several entities and organizations conducting wealth and investing seminars for the public. It will most likely continue this year, so better take advantage of these opportunities to improve your financial literacy.

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Bonus: Shariah Compliant Securities

Shariah-compliant listed companies conform to the Shariah doctrine, which pertain to principled, ethical and socially-responsible conduct and practices of Islam followers.

Currently, the Philippine Stock Exchange has more than 40 companies on this list, and they’re exploring the feasibility of an Islamic index and an Islamic ETF to increase the participation Muslim Filipinos in nation building.

It will be interesting to see if there will be developments in this area. If there is, and it gets traction with foreign Islamic investors, then this has very good long-term potential.

And that concludes my 2014 suggestions on where to invest for the Year of the Horse. Remember that anything can happen throughout the year, so market outlook can change and better investing opportunities can present itself.

That’s why it’s always best to be updated with what’s happening in the local and global economy. Moreover, this is also the reason why you have to regularly manage and monitor your investments.

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Photo credits: Terence Wright and TradingAcademy.com




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