Avoid the Herd Mentality

This tip comes number 1 in Economic Times of India, where they are know as good players of stock market and money lending business.

The typical buyers decision is usually heavily influenced by the actions of his acquiantances, neighbor or relatives. Thus, if everbody around is investing in particular stock, the tendency for potential investors is to do the same, but this technique is bound to backfire in the long run.

No need to mention that you should always avoid having the herd mentality if you do not want to lose your hard-earned money in stock markets. The world's greatest investor Warren Buffett was surely not wrong when he said, "Be fearful when others are greedy, and be greedy when others are fearfull"

Philippine Mutual Fund Company List

Money Market Fund

Money Market Fund is an open ended mutual fund that invests in short term. Money Market funds are widely regarded as being as safe as bank deposits yet providing a higher yield. It seeks to limit exposure to losses due to credit, market, and liquidity risks. Money Market Fund usually regulated by securities and exchange commissions, however, every company that provide Money Market Fund applicants should go through review their terms and conditions.

Peso Money Market Funds Company in the Philippines

First Metro Save adn Learn Money Market Funds, Inc. (Fami.com)
Philam Managed Income Fund, Inc. (philamfunds.com.ph)
Sub Life Prosperity Money Market Fund, Inc. (sunlife.com.ph)
ATR KinEng Money Market Fund, Inc. (atrkimeng.com)
ALFM Money Market Fund, Inc. (alfmmutualfunds.com)

Bond Funds

Bond funds typically pay higher dividends than money market accounts. Bond Funds typically pay periodic dividends that include itnerest payments on the funds underlying securities plus periodic realized capital appreciation.

Peso Bond Funds

Philam Bond Fund, Inc. (philamfunds.com.ph)
Prudentialife Fixed Income Fund Inc.(myoptimafunds.com)
Cocolife Fixed Income Fund, Inc. (cocolifefunds.com)
Sunlife Prosperity Bond Fund,Inc. (sunlife.com.ph)
First Metro Save and Learn Fixed Income Fund. Inc. (fami.com.ph)
DWS Deautche Philippine Fixed Income Funds, Inc. (atrkimeng.com)
ALFM Peso Bond Fund, Inc. (alfmmutualfunds.com)

Stock Fund

Also called an Equity Fund, is a fund that invests in Stocks. Fund assets are typically mainly in stock, with some amount of cash which is generally quite small, as opposed to bonds, notes or other securities.

Peso Stock Funds

Philippine Stock Index Fund Corp.
United Fund, Inc.
Philequity PSE Index Fund Inc.
Philam Strategic Growth Fund, Inc.
First Metro Save and Learn Equity Funf, inc.
ATR Kimeng Equity Opportunity Fund, Inc.
Philequity Fund, Inc.
DWS Deutsche Philippine Equity Fund

Is My Investment Covered by the PDIC?

No. A mutual fund is not a deposit product and is, therefore, not covered by the PDIC, However, when you invest in a mutual fund, you are considered a shareholder and in effect are entitled to your proportional share in the total assets of the fund. THe PDIC, on the other hand only insures up to P2500,000 fo your total deposits with a bank and not your entire investment amount.

What Happens to my Investment if Something Happens to me?

Your shares in the mutual fund will form a part of your estate and will be distributed to your heirs (usually surviving spouse and childred) accordingly. Rest assured, your investment will not disappear, or be "taken back". To ease the transfer of the fund shares you may want to consider opening a joint account or trust account.

How to Make Your Investment

• A Mutual Fund Investment is considered to be one of the best long run investments that one can make.
• It is a great mechanism to save and to let your money work for you.
• It is a means to have your hard-earned savings, managed by professional investment managers.
• It is a way for you to make investments in sophisticated equity or fixed income securities huge investments to quality.

There are two ways by which you can make an investment in a mutual fund:
1. You can make a single investment in any mutual fund of your choice, or
2. You may either participate in a "Monthly Investment Program", and have your salary deduction invested in a m utual fund of your choice.

Here are simply procedures in making a single investment in mutual funds:
1. Make sure you get and read a copy of the prospectus of the mutual fund that you have chosen.
2. Fill out an Investment application form.
3. If you are investing on behalf of a corporation/company, please submit a copy of the following:
- Articles of Incorporation and By-Laws
- SEC certificate of registration
- Secretary's certificate / Board resolution authorizing the investment
- Secretary's certificate on the percentage of ownership / capital stock held by non-Filipino shareholders.

You may make your investment either in Cash or Cheque payable to the fund of you choice.

Thanks to Metro Asset Management.

This article intends only to educate and enlighten readers about investments.

How do we Invest in Mutual Fund?

You can join by buying shares of the mutual fund. The price of these shares, also known as the Net Asset Value per share, changes daily depending on the performance of the underlying investment portfolio. As the Net Asset Value increases, the value of your investment also increases. The mechanics of investing in a mutual fund are very similar to buying shares in the stock market.

Standard Procedure on Investing in Mutual Fund will be posted in the Next Article.

What is Diversification? Why is it important?

Diversification simply means "not putting all your eggs in one basket". This is especially important in investing. In a well-diversified portfolio, losses from some investments can be off-set by gains in other investments. This reduces the overall fluctuations or volatility of the value of the portfolio. By putting money in a mutual fund, you gain instant access to a diversified portfolio of investments. It is, however, also important to realize that not all risk can be diversified away. There are certain economic, market and political factors which may affect all investments adversely.