Apart from being handled by professional fund managers, what is good about mutual funds is that it allows investors to diversify their portfolios through their small investment in various businesses and organizations. In doing so, they can protect themselves, as well as their investments, from any adverse market downturns. After all, it is never good to place all your eggs in one basket.
Investing in mutual funds does not require a large starting capital. In fact, you can invest in mutual funds for as low as PHP 5,000, depending on the company that you sign up with. Moreover, all earnings from mutual funds are tax-free, in observance of Republic Act 8424 or the Tax Reform Act of 1997.
On the other hand, investing directly in the stock market is viewed as a high-risk undertaking because of the market’s highly unpredictable nature. However, for those that have a high risk tolerance, investing in stocks can also generate high profit, which can be in the form of dividends or earnings from the sale of stocks.
New investors are advised to research the earnings, stability, and dividend payout of a specific company prior to investing in their stocks. Once you purchase a stock, you automatically become a part owner of the business - it would serve you well to understand how the company operates, how they fare against their competitors in the industry, as well as current and future projects. Doing all of these can help you gain a better gauge of their long-term profitability.
Unlike before when investing in the stock market requires the services of a stockbroker to trade in the Philippine Stock Exchange (PSE), there are now online stock brokerage platforms that encourage direct and active trading. Keep in mind, however, that to actually earn from the stock market, you need to be patient and fully invested in it for the long term, because pulling out your investment prematurely may only lead to unfortunate losses.
Building your net requires time, knowledge, and discipline, as well as the support of a strong financial partner like Allianz PNB Life. If you are on the lookout for a conservative yet high-performing investment product, Allianz PNB Life offers the Maximal Power, a single pay, unit-linked life insurance product that maximizes your investments by putting these into expertly managed funds while providing superior lifetime insurance protection of at least 130% of the single premium you paid. The Maximal Power plan is available in both Philippine Peso (PHP) and US Dollar (USD) denominations.
For more information, check out Maximal Power here.