Where to Invest in 2010 Series: Part 1

Last Saturday, I attended Moneysense Live’s Where to Invest in 2010 Seminar after I received an invitation from the event’s organizers. 

In the next few weeks, I’ll be sharing the lessons I’ve learned from the seminar through a series of articles.  This is part 1 of the series which tries to present the investing profile of Filipinos as well as the overall investment climate in the world and in the Philippines for 2010. 

The Filipino Investor Profile

The first part of the seminar showcased some very interesting statistics based on a survey conducted by the event organizers.  Here are some of the highlights.

• 50% of the participants are of age 31 – 40 years old
• 50% of the participants are single
• 46% of the participants are just starting to invest
• 77% of the participants want to have financial freedom

While the numbers are not reflective of the whole nation’s investing profile, it is very interesting to note that “a lot of single Filipinos in their 30’s are starting to learn how to invest in the hope of achieving financial freedom.”  This is definitely a good sign! 

Unfortunately, the reality is that only less than 1% of Filipinos are currently investing in the various financial vehicles in the Philippines.  Most are still unaware of the different options to grow their money.  Some have no savings at all.  Others are still struggling with debt. 

Whether the statistics are encouraging or not, the challenge still remains – how to encourage more Filipinos to invest and be smarter with their own money so they can achieve their dream of financial freedom.

Overall Financial Outlook for 2010

During the seminar, a speaker from Citibank noted that on a macro level, financial growth will be driven more by the emerging markets (e.g. China, South America, etc).  Developed nations such as those in Europe and the US have been hit hard by the financial crisis and their growth will not be as fast as the emerging markets. 

According to him, the Philippines is expected to grow slowly but surely, fueled by the strong domestic demand as well as the very strong remittances from Overseas Filipino Workers.  In addition, there is also some expected volatility on the market due to the upcoming presidential elections.  Stock markets may go up or down depending on the investor sentiment on who will be elected as President of the Philippines.

For those planning to invest in 2010, he offered the following tips:

• Assess your financial goals
• Know your risk profile: risk-averse, conservative, balanced, growth
• Consider investing long-term to reduce volatility and risk
• Do not time the market
• Harness the power of compounding – reinvest cash flows
• Invest regularly to benefit from cost-averaging
• Rebalance regularly to reduce your risk
• Consider managed funds if you do not have the time and expertise

Rich Money Habits Thoughts: The tips above are nothing new.  Even though it’s important to know what’s happening all around the financial markets in the world and in the Philippines, I think it is NOT as important as discovering and unleashing the investor in you.

The battle of whether to invest or not is happening only in your own mind.  The hesitancy is paralyzing.  If you want to invest, take the first step.  It’s important to learn from books and seminars, but it’s even more important to take action and actually invest.

At the end of the day, in spite of all the ups and downs of the market, your tendency will always be to turn to your own money habits.  Do you save or invest regularly?  Why not?  Make it a habit.  Start now.  Invest and be financially free.

Watch out for part 2 of the Where To Invest in 2010 Series: 5 Stages of Life Cycle Investing!