Friday, May 12, 2017

UITF Investing 101: Equity Funds are for Long Term Investing


I joined a UITF investing group in Facebook recently and I was surprised with the short term investing mindset of some of the members there, a mindset that has unfortunately influenced members who have zero-knowledge or have little knowledge on UITF investing. As someone who has been investing in UITFs, Mutual Funds (MF) and stocks since 2006, I felt the responsibility to share my views on UITF investing, what I believe is the true essence of UITF investing. I have to admit that at first, I was a hesitant to post what I've written because I'm not sure how most of the members would take my opinion. I'm glad that I pressed the "Post" button because my message received an overwhelming response.

UITF Investing: Equity Funds for Long Term Investing

I would like to re-post the message here, so it can also be shared to other people who are new to UITF investing, or are about to try UITF investing.

Just a friendly reminder:
When you invest in UITF or MF (especially equity funds), the idea is to hold on to it for a long time in order to maximize the growth potential of your money.
There's nothing wrong in selling your shares if you're already happy with the gain. But what you should also consider is the future performance of the Philippine Stock Market. We're in a bull market right now and many expect prices to further go up. Do you really think na hanggang 8000 na lang yung index? I don't think so. Kung sakaling ma-establish na yung support sa 8000, di ka na bibili kasi feeling mo mahal na di ba? And kung di ka na bibili, ma-m-miss mo yung pag-akyat ng index sa 9000, 10000 or higher. Nakatiwangwang na lang yung pera mo habang nanghihinayang kasi maaga ka nagbenta.
While it's true that the NAVPU or NAVPS may go down after some time, only a few investors can buy sa bottom before it goes up again. Oftentimes, mas mataas na yung next na pasok mo lalo na kung mabilis yung pag-rebound ng index. Another thing, mas nakakastress din kapag mataas yung bili mo kasi konting down lang, kita mo agad yung negative mo. Compared sa pinabayaan mo lang lumago yung fund mo, kung magdown man yan ng konti, posible na gain ka pa din and makakatulog ka pa din ng maayos sa gabi.
If short term holding yung gusto nyo pero equity-related pa din, try nyo mag-stocks. Kung gusto nyo naman na parang UITF pa din, ETF (FMETF) yung bilhin nyo (kelangan nyo din ng stock broker para dito). Mas may control pa kayo doon kasi pwede kayo mag-buy and sell during trading hours. Alam nyo din agad kung magkano yung magiging buying price or selling price nyo.
Good luck to all, alam kong happy happy tayo ngayon (mapa-stocks, UITF or MF ang hawak nyo). Simula pa lang to of better things to come. :)
p.s. kahit tumaas pa ng tumaas ang index, magpapasok pa din ako sa UITF monthly (plano ko kasi is gawin yun for 10 years, naka-2 years na so far. :)

I'm glad that it changed (or at least challenged) other members' perception towards UITF investing. Geez, would you believe that some thought that equity funds are for short-term hold only due to market volatility? I didn't bother to ask who taught them that, I just did my best to correct their understanding that equity funds are supposed to be for long term investing (at least 5 years hold). More importantly, my message was what other members needed to reassure them that they're doing the right thing for their long term investment plan. I'm also glad to know that other members are with me.

UITF Investing: Equity Funds for Long Term Investing

UITF Investing: Equity Funds for Long Term Investing

UITF Investing: Equity Funds for Long Term Investing




Got questions on UITF investing? Feel free to post a comment below. :)

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