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.

Is my Principal Secure or Can I Lose Money in Mutual Fund? any Risk?

As all other investments ways, investing in a mutual funds includes an average amount of risk. Stock and bond prices go up and down every day. So as the value of the underlying instruments which pool of funds was invested is adjusting, so does the valueof your mutual fund money invested. Depending on the market conditions, there may be periods in which you may lose money. However, until you actually liquidate or withdraw you money invested from the mutual fund, these will simply remain, "paper losses" which can be recovered when market conditions stabilize.

In addition, the fund managers of the fund also do many things to control and minimize the risk. First, they analyze all investments thoroughly before including any stock or bond in the portfolio. Second, they ensure that the fund is properly diversified, i.e. invested in many different stocks or bonds. As such, a drop in the price of one investment may be off-set by gains in another. Third, the fund managers are subject to regular and internal investment restrictions that prevent the fund from being invested from certain speculative investments and encourage proper diversification.

While there are risk in mutual fund investing, the returns can also be reqarding in the long-run. There is always a risk return on trading in any investment. What is important is to know how much risk you are willing and able to take and select an investment whose risk provide matches yours.

How Much I Earn If I Invest in Mutual Fund?

Mutual Funds are not time deposits and therefore do not pay out a fixed rate of return. Mutual funds invest in stocks listed on the stock exchange as well as bonds issued by the governement and corporations. As a result, the value of your investment fluctutates daily depending on the performance of the underlying investments. Because of this, your return cannot be guaranteed. Your actual rate of return depends on many factors such as the performance of the underlying investments as well as general market and economic conditions. However, over the long-term, investments in mutual funds outperform traditional time deposits placements.

What Are the Benefits of Investing in a Mutual Fund?

For an affordable initial investment amount, you gain access to various potentially higher yielding investments normally available to investors with much larger funds to invest. A mutual fund makes this possible because it pools together the funds of hundreds or even thousands of small investors. The pool of funds is therefore large enough to access these potentially higher yielding investments.

Mutual fund investors also benefit from the investment management expertise and market knowledge of the team of professional fund managers that manages the pool of funds. These fund managers ensure, that the funds are optimally invested and diversified at all times. Therefore, you do not need to watch the markets yourself since there is a team that is already doing if for you.