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.
If the actual stock market is green, then there is a big chance that the equity-based UITF prices to be published by end of day (~5pm to 7pm) is also green. If the stock market is down today, then equity-based UITF will likely be down as well. As such, if you buy before cut-off (in this case by 2:30pm), then you’ll be able to buy at end of day prices. Same with selling.
Fully or partially pre-term your loans. I know this sounds so killjoy but hey, delay of gratification is always gratifying. And think about this. Imagine the interest savings you can get by pre-terminating your loans. Or the freed up money that used to be spent on amortizations.
The investment portion, is not guaranteed, it may have gains or it may incur losses, and it is withdrawable by the policy owner. Every month of savings, the portion that goes to investments is used to buy units in the funds chosen by the client.
the timing effect in the investment is minimized since purchases are spread out. Supposedly, the time you buy (whether at a high or low) is no longer relevant since your average purchase price will tend to be lower than future values.
So which do you prefer? Lend to a company for a single-digit but almost sure return? Or risk some more and ride the lows and highs of company performance by owning a portion of it, for a chance to have double-digit gains?