If the market is on its way to recovery, then I’m pretty excited about the upside, if not yet, then more chances to buy.
Good news. Last week, major banks launched their PERA UITFs, namely that of BPI and BDO. Wanted to let you know of the good news as soon as possible so we can all review, conduct due diligence and consider this investment.
I’m planning to invest in VUL. But still, I also want to invest in mutual funds simultaneously. Is it ok to do this simultaneously? Which has higher return? I’m trying to weigh how much to allocate for both given my limited budget.
What happened to TEL shows how Buy and Hold (Forever) can hurt Juan’s investments. Those who bought TEL in 2006, hoping to gain much from it, will be depressed to see that after 10 years, there wasn’t any capital appreciation. Wasted time. Wasted paper gains all those years. I hope not a lot of people did that. Though again, a small compensation is the dividends so in that sense, it is still a lot better off than time deposits (even if invested capital did not appreciate).
With this development, soon there will be UITFs that provide passive income via dividends, without the need for Juan to redeem his investment principal. So Juan can just hold on to his principal, enjoy the capital appreciation, while reaping the unit-payment income on the side.
In a gist, VUL asks you to commit a monthly payment whether it is for the next 5, 7, 10 or 15 years. During this time, a portion goes to protection by guaranteeing an amount in case the owner dies, suffers disability or critical illness. Further a portion is invested in instruments that work like a Mutual Fund / UITF which grows exponentially over time. This fund is withdrawable for any use, such as eventual retirement, tuition fees, home purchase etc.
Get both! The “or” approach may be stemming from the fact that VUL and investment funds do have some overlaps and maybe you want to avoid the redundancy and the repetition to sort of maximize your investments. But they do have distinct purposes and benefits that the other cannot provide.
The chart says 2nd, 4th to 6th, 9th to 14th, 16th to 21st and 25th to 28th seem to be good choices in buying UITF. My previous and ongoing investment, which falls on every 15th, is unfortunately one of the peaks of average prices. I chose 15th due to cash flow considerations and I did not think of doing this exercise in Jan2013. Just now. Hindsight.
This discipline in investing at regular intervals removes the need to time the market (good for newbies and those who don’t have time to monitor the market) as well as removes the emotions in executing every trade (greed during market runs or fear to invest when market goes south).
If ever you go for a UITF, just choose stocks-related funds assuming these meet your risk appetite. Banks will ask you to answer a questionnaire to determine your risk appetite and investment horizon. Initial investment can be as low as PHP10K and incremental investments as low as PHP1K.