Investing in Stock Market (Part2)

(COLUMN)

MONEY MATTERS

By: Engr. Arlen Macaspac

=== While you see how exciting it is to get higher rewards of gains in the stock market, the next question is “Do you have enough understanding, patience, personal research, and time?====

Investing in the Stock Market may not be that simple as others may perceive, but with persistence and motivation to learn, I would say that it is worth trying.

I guess you heard that people should buy when the price of stock is low, and sell when the price is high. But when is it considered high and low? One of the natures of stock investing is volatility, in layman’s term; it is the constant changes (up or down) on the movement of stocks over short period of time. This is where the active investors time their entry in the market and can make gains in a short period of time. On the other hand, the passive investor usually ignores the short term fluctuations and considers long term horizons since the fundamentals of the companies is their guiding principle in choosing their stocks and realize their capital gains due to increase in market price over a long period of time. Investors can also earn in stock market by Cash Dividends, Stock Dividends and Rights offering. As gains in stocks are relatively higher than gains in bonds or banking instruments, you must always remember the Risk and Reward principle or what we call high risk for high returns and low risk for low returns, thus the high volatility behavior of stock investing has a tremendous level of risk associated with it.

Philippine Stock Market Index behavior over a 2 year period

Oct 2007 – 3819 level Oct 2008 - 1700 level Sept 2009 – 2754 level

Notice the sharp decline from September 2008 which was the start of the financial meltdown.

If you ride on the Phisix starting from the lowest level of 1700 in Oct 2008, up to level 2754 in September 2009, your gain is already about 62%. Will the Phisix go back to its 2007 level of 3819? Who knows, most of the risk takers get the highest rewards!

Individual Stock Prices Oct 2007 to Sept 18, 2009
Stocks	Oct-07	Oct-Nov 2008	Sep-09	Oct 2008 VS
Code	Price/Share	Price/Share	Price/Share	Sep-09
Ayala Corp (AC)	620.00	177.00	315.00	77.97%
BDO	63.00	23.00	36.00	56.52%
EDC	7.60	2.36	4.65	97.03%
First Gen (FGEN)	60.00	11.75	16.75	42.55%
Globe (GLO)	1720.00	725.00	990.00	36.55%
Meralco (MER)	83.00	47.00	170.00	261.70%
Megaworld (MEG)	4.40	0.56	1.48	164.29%
Robinsons (RLC)	20.75	4.75	10.00	110.53%
SM	382.00	170.00	320.00	88.24%
PLDT (TEL)	3070.00	1960.00	2300.00	17.35%

September 2008 was the month when the whole world was shocked and gave a frightening attention to another financial crisis after the Great Depression. Locally, Ayala Corp (AC) price decreased to Php177/share from its original price of Php 620/share in Oct. 2007. Likewise, notice its value as it increased to Sept 2009 at Php 315/share. If you invested in AC stocks from Oct 2008, your capital gain is already around 78% as of this month.

While you see how exciting it is to get higher rewards of gains in the stock market, the next question is “Do you have enough understanding, patience, personal research, and time to start by yourself in this type of stock investment?”

There are however other options available in the market. Such are the birth of Mutual Funds, UITF and Variable Life Investments. These types of instruments have their own fund managers who will choose the stocks for you. Let me give you a snapshot of these instruments.

Mutual Funds are types of investment funds that raise money from shareholders to invest in a group of assets such as stocks, bonds, and money market funds. Mutual Funds often have a minimum investment amount and a series of fees associated with them. The Securities and Exchange Commission is the governing body which looks on Mutual Funds companies who sell these funds.

UITF or Unit Investment Trust Funds are also similar to mutual funds but are sold by the local commercial banks in the Philippines and are under the supervision of Central bank.

Variable Life Investments (or Unit Link Investments) are sold by Life Insurance Companies and are strictly mandated by the Insurance Commission. Variable life differs from mutual funds and UITF because it has a life insurance component in nature. Many investors choose Variable Life because of its insurance bundled, and can be used for estate planning and tax purposes. It has also charges similar to Mutual Funds and UITF.

Whether you go into direct stock trading using a personal broker or online broker, or invest in mutual fund or join Variable Life investments, your choice for sure must always be dependent on your financial objective and should match your attitude on any investment decisions.

For inquiries, comments and suggestions, you can email me at engrmac@grand-holdings.com or get a copy of Money Matters article by visiting my website at www.grand-holdings.com.

Strengthening the family

(COLUMN)

BIG BROTHER
By: Councilor Alex F. Patio

== We, as parents, should and must do our share by not providing only for the food, shelter and clothing for our children==

On the month of September of every year, a one week celebration is allotted in observance of the importance of a family and it is called National Family Week-- a civic observance to praise and strengthen the nation’s basic social unit. Various civic and educational observances are planned throughout the week to call attention to the family and its needs.

The Filipino family, as the social scientists like to describe it, often consists of more than one generation, so that both parents and grandparents collaborate in raising the children and in handling household responsibilities. In recent years, social and economic pressures have taken their toll on the family. As young Filipinos migrate to the cities in search of a better future, or travel abroad to find adequate employment, families are often separated by great distances. The elderly are often left in the province while the youth pursue their fortune elsewhere. Children are sometimes neglected in the process and suffer.

Of all the species which dwell on this planet, the human offspring takes the longest time to reach maturity. In the human sophisticated industrializing culture of the Philippines, children need their parents well into their twenties. To attain their full potential, children need an education that takes time to attain. A few generations ago, a high school diploma was enough for a good economic future. Today’s children need college and even graduate degrees and the burden on parents can be exhausting.

The family, however, plays a crucial role in nation building. It is the first school of the next generation. That is why parents must instill confidence and a sense of identity into the minds and hearts of their children. Families demand long-term commitments and enduring relationships for the welfare of the offspring. After begetting offspring, parents must cherish their children, care for them and supply their needs.

It is fitting that the nation focuses attention on the Filipino family not only for a week, rather al- throughout the year. May every citizen do his part to strengthen family ties and to promote family values. The family is the portal to the nation’s future.

And we, as parents, should and must do our share by not providing only for the food, shelter and clothing for our children. As much as we can, give them the best education. Through education, they will be armed with the necessary weapon to improve their economic stature. That way, if we have an educated family, each member will become productive citizen. If no citizen becomes idle, then we can truly say that we are promoting and empowering the family that after all, belongs to us or indeed our own family. A productive family begets productive community, society and a nation.

In an intolerable society, the task of working for revolutionary change is the duty and the privilege of all parents and children, young and old. It’s just that we should all work together in the realization of a better society.

Here in San Fernando, the city government wants to institutionalize programs that would surely reap positive outcome, like giving preference to the elderly, assistance to senior citizens, providing livelihood to women sector, uplifting education befitting our youth through scholarship provisions, health care and free medicines to name a few.

In a continuous cycle, the youth of today will establish their own family, a productive family, educated and will be free from bondage of poverty.