ARE you currently investing for your short term and long term goals such as buying your first home in the next 12 months or probably preparing for the college funds of your kids?
Conducting a mid-year financial portfolio review will help you align your goals with your investments and make the necessary adjustments. Here are some of the steps that you may consider to be more effective in the next six months:
1. Revisit your financial goals. Take a moment to assess your current priorities. Make sure your portfolio is aligned with the risk appetite that you can take for your short term or long term goals.
2. Diversification analysis. Ensuring that your exposure are categorized to different asset classes will mitigate the risk and maximize the profit.
Here are the different asset classes that you may consider:
Stocks/equities represents ownership of shares in a company. Investing in this type of asses allows you to participate in the company’s growth and profitability.
Real estate investment can be of various type, it could be residential or commercial rental. Another type is potential capital appreciation and reselling it after a certain period of time.
Exchange Traded Funds (ETFs) are similar to mutual funds but trade on stock exchanges like individual stocks. ETFs can track specific market indices, sectors, or asset classes. They offer diversification and liquidity while providing exposure to specific investment themes.
Hedge funds are investment funds that pool capital from accredited or high-net-worth investors and employ a range of investment strategies to generate returns. These funds are typically managed by professional investment managers or hedge fund managers.
Research and development (R&D) investments involve funding activities aimed at developing new products, services, or technologies or improving existing ones. R&D investments are often made to enhance competitiveness, innovate, and maintain a long-term market advantage.
3. Consider market condition. If you are investing in a global approach, knowing the business landscape of a specific country where the company you invested in operates will help you assess the risk of a particular investment. If you are investing for example in a place where election is on-going or new regulations are implemented, you may experience greater fluctuation versus in a country that is continuously growing in terms of global domestic product.
4. Investing in your skills. Investing in skills is equally important for Filipino investors.
Here are some reasons why Filipino investors should consider investing in skills:
Enhancing employability. Investing in skills that are in demand in the job market can enhance employability. The Philippines has a competitive job market, and having valuable skills can give investors an edge in securing employment or advancing their careers.
Overseas job opportunities. Many Filipinos seek employment opportunities overseas, where specific skills are highly sought after. By investing in skills that are in demand globally, such as healthcare, engineering, information technology, or hospitality, Filipino investors can increase their chances of finding lucrative job opportunities abroad.
Entrepreneurship and business success. The Philippines has a vibrant entrepreneurial ecosystem, and investing in skills can be instrumental in starting and growing a successful business. Developing skills such as marketing, finance, sales, leadership, and digital literacy can significantly contribute to entrepreneurial success.
Embracing technological advancements. With the rapid advancement of technology, acquiring digital skills is crucial. Digital literacy, data analysis, coding, and proficiency in digital marketing platforms can open doors to various career opportunities and help Filipino investors stay competitive in a digital-driven economy.
Upskilling for higher earnings. Certain skills, such as specialized technical skills or industry certifications, can command higher salaries in the job market. By investing in skills that are highly valued, Filipino investors can potentially increase their earning potential and improve their financial well-being.
Resilience and adaptability. The ability to adapt to changing market trends and industry disruptions is essential. By investing in a diverse range of skills, Filipino investors can become more adaptable, resilient, and better equipped to navigate economic uncertainties or changes in employment landscape.
Supporting national development. Investing in skills aligns with the broader goal of national development in the Philippines. By acquiring skills in sectors prioritized by the government, such as infrastructure, renewable energy, tourism, and agriculture, Filipino investors can contribute to the country’s economic growth and development.
What I shared are just some of the strategies to re-assess your investments. Always remember that patience and continuous learning will be part of the process.
Karlo Biglang-awa is a registered financial planner of RFP Philippines. To learn more about personal-financial planning, attend the 103rd RFP program this September 2023. To inquire, e-mail info@rfp.ph or text at 0917-6248110.