Do you find investing boring? Good, you’re doing it right

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When it comes to investing, boring is almost always more profitable. George Soros, who is considered as one of the most successful investors in the world (valued at 25.2 billion USD by Forbes) said it best: “If investing is entertaining, if you’re having fun, you’re probably not making money. Good investing is boring.”

It’s not exciting, I know, but the millionaire mindset demands minimizing risk. In other words: the less exciting, the better. The intrepid life of investing that you see in TV and the movies — depicted by constantly buying stocks, making phone call after phone call, and downright obsessing over the stock market — may be exciting (not to mention more stressful). But unless you plan on devoting yourself purely to investing, you’ll probably end up with more wrinkles on your forehead rather than zeros on your account.

If you’re like me and you plan on living normally while getting a secondary stream of income, the best way to make extra money is to invest in good funds and leave them alone.

But how?

Experienced investors don’t rely on complicated strategies or advanced algorithms to ammass wealth. For Randell Tiongson, registered financial planner and personal finance guru, it all boils down to starting early and doing it consistently. “Don’t do it overnight. Build it slowly,” he quips in one of his investment seminars. “Try adding up what you spent for coffee and you’ll realize that you drink thousands in caffeine every month. And you don’t even have investments.”

He adds: “When should you invest? Here's my recommendation: Invest early, do it wisely, and do it correctly. The best time to invest was yesterday, the next best time is today, and the worst time is tomorrow. If you don't do it early, it's your loss. It's riskier and it's more difficult.”

Invest and forget about it

One of the best — if not the best — way to do this is to invest in UITFs or Unit Investment Trust Funds. A UITF is essentially a pool of investments funded by various investors, making it — by default — diverse, less risky, and liquid. Confused? Don’t worry, it’s actually quite simple.

Think of a UITF as a basket with different fruits. Let’s say one basket is filled with mangoes, the other with oranges, and a third one is filled with both mangoes and oranges. In a UITF, your basket is composed of different funds instead of fruits. Only this time professional fund managers take charge of choosing which ones to buy in order to maximize the chance of profit.

The best part? You don’t need to actively manage your funds; seasoned experts will do the technical work for you. And with a low minimum investment of P10,000, it’s one of the most accessible investment instruments out there.

How to invest in a UITF

The first thing you should do is to check if your bank of account offers UITFs. If it’s not posted on their site, call them up and ask. If everything checks out, go to the branch and start your UITF application.

Normally, you’ll be asked to answer a Client Sustainability Assessment test to determine which type of UITF is best suited for you before filling up forms to finalize your application. Don’t forget to bring a valid ID!

If you want to find out which UITF is best for you, Security Bank offers an easy-to-use tool. With their UITF Returns Calculator, you’ll be able to answer the most important question: “How much more could I have retired with if I had invested?” By answering a series of questions, the quiz will tell you what type of investor you are — be it conservative, moderate, aggressive, and everything in between.

Making money with UITFs

Checking if you’re making money with UITFs is easy. You only need to remember one value: the NAVPU or the Net Asset Valuation Per Unit. In a nutshell, it shows the value of one unit of your UITF. Your ultimate goal is to sell your UITF at a higher NAVPU than when you bought it.

For example, if you’re buying 1,000 units of UITF A at P10 per unit, you’ll need to invest P10,000. After some time, you notice that the NAVPU of UITF A increased from P10 to P20. At this point, if you sell your units of UITF A, you’ll be earning P10 profit per unit or P10,000: New Value of UITF A (20 x 1,000 = 20,000) – Old Value of UITF A (10 x 1,000).

Final thoughts

That’s not to say that UITF investing is risk-free. As with all investment instruments out there, income is not fully guaranteed. But if you’re looking for a low maintenance, long-term financial investment, UITFs may be the best way to go.

If you’re ready for other types of investment, there are mutual funds, fixed income securities and insurance plans, among others. Check out Security Bank’s other investment options here.

Want to learn more about investing and UITFs? Visit www.securitybank.com/uitf or email trustmarketing@securitybank.com.ph

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