Updated: January 2, 2013
Let me start the year by giving you some advise on where to invest this 2013.
The Philippines certainly had a great run last year, and many are predicting that the local economy will continue to rally through the “Year of the Snake”.
So if you have some investment funds available and would like to make the most out of it in the coming year, then below are some tips on where you should put your money this 2013.
But before anything else, let me give you my first rule on investing, which is: Never invest without an emergency fund.
If you don’t have an emergency fund, then I highly encourage you to start saving for one first. This means you can stop reading this article now and perhaps, go here instead: Money Saving Tips For People Who Hate Saving Money
With that said, here are, in my opinion, the best places to invest this 2013.
The Philippine Stock Market
As the country continues its economic growth this year, more foreign investors will come, which means local companies will get new business, or they’ll expand to stay ahead of new competition. Either way, the result would be a robust business environment that can move the equity market to new peaks.
However, many are saying that the market is already so high, and it could go down anytime soon. Truth be told, I am expecting some correction during the first half of this year, but barring any drastic economic disasters – I believe that the PSEi will continue its upward trend.
What to do?
Invest using cost averaging on companies with the G.E.M.S.S. criteria, or in a Peso-based Equity UITF or Mutual Fund.
Should you invest in speculative stocks? Too risky, but still possible. Make sure you do your fundamental and technical analysis first before deciding on a company.
Watch Bloomberg and most of the global news you’ll hear is about the European Debt Crisis, the U.S. Fiscal Cliff and the slowdown of China’s economy. In short, most foreign governments are currently hard at work in finding solutions to their falling economy.
I don’t want to get into the “nosebleed” details of the monetary policies being implemented by each government, but if there’s anything you should know, it’s that in times like these, the bond market is one of the places where investors go.
Foreign bonds, such as U.S. Treasury Bonds, become appealing because stocks are expected to drop whereas bonds can continue to provide income in the form of interest payments – making them a relatively safe investment.
What to do?
Invest in a Dollar-based Bond Fund. Ask your bank for their available UITF that invests in foreign bonds, or your mutual fund company for similar products.
Should you do cost averaging? I would recommend it, but since investment requirements are a bit high for foreign-denominated funds, a one-time placement will do. But remember, bonds are moderate-risk investments so be sure to have an investment horizon of at least two years before putting your money here.
Start Your Own Business
Paper assets not your thing? Perhaps investing your money in a business is for you. If so, then the question now is, what’s the best business idea to pursue in 2013?
If you’re a long-time reader here, then you might know that I actually hate answering that question because I believe the best business that a person can put up will always depend on his or her skills, location and available resources.
However, I’ll indulge you today with some concrete answers but please, please remember that you shouldn’t start a business if you don’t have a passion for it.
Possible business ideas for 2013:
- Tourism-related business, because more and more Pinoys and foreigners are traveling locally.
- Election-related business, because obviously, it’s an election year.
- Social media and digital marketing business, because companies are now trying to reach their market through the internet, and most are willing to outsource this business process.
I actually have a few more business ideas in mind that I believe will do well in 2013. But let’s reserve that for another post, shall we? 😀
The Best Investment Every Year
As always, the best investment is in knowledge.
If you don’t have enough money to invest in any of my suggestions above, then consider buying a book, or attending a seminar, and see how increasing your financial literacy can help you earn limitless dividends.
And with that, I’d like to end this post. I hope you enjoyed reading and learned something useful today.
If you’d like to share your own thoughts on where to invest this 2013, then please feel free to write them as a comment below.
Let’s learn from each other and make this new year a profitable one for all.