Where to invest this 2018

2017 continues to be stellar year for the local economy. After all, we are riding on the momentum of 72 consecutive quarters of economic growth—with the third-quarter growth at 6.9 percent, beating analyst’s estimate. Toward the last few days of the year, the much awaited Tax Reform for Acceleration and Inclusion (TRAIN) was finally signed into law. Interest rate remains stable as inflation falls within the limits. All these point to even brighter prospects in 2018.

Given that, shouldn’t we all take advantage of the upbeat economy and invest our hard-earned money? Frankly, no one knows how long this optimism will last. Ten years ago, we saw a different story. No telling what will happen in the next few years. But, while the iron is hot, it’s good to strike.

What are the top 3 assets that we can make money from? These are my personal choices:

Cryptocurrencies

As of this writing, Bitcoin and other cryptocurrencies are starting to gain traction and recognition here in the Philippines. A year ago, it was barely in the radar of investors and traders. Now, dedicated groups have been formed to analyze, study and share a wealth of information on these. Even our own Central Bank is considering regulating Bitcoin. I myself have dabbled in Bitcoin in the middle of last year. The question I often get aside from “What is Bitcoin?” is “Is it safe?”

Frankly, even I can’t answer the question if it is safe or not. It has boom and bust even if it is only about a year. The volatility of cryptocurrencies is overwhelming for newbie investors. But, overall, the trend has been up since, well, its inception. But Bitcoin is just one of the many cryptocurrencies to invest in. There are others out there are also worth looking at. Ethereum made 4,276 percent, Ripple made 3,415 percent and NEM made a mind-blowing 8,662 percent. Those who held them had a merry Christmas and a happy new year.

Will the uptrend last? No one really knows. It has been making money for the investors, and it’s also worth risking a bit of fund and going for it. Always remember, though: invest only the money you can afford to lose.

Stocks

Just last year, the Philippine Stock Exchange Index made several record highs and even hit 8,640 before settling at 8,558—a good 25-percent gain for the full year. Putting things in perspective, had you invested P100,000, you would have earned P25,000. But that’s just the main index. A handful of stocks outperformed the main index by leaps and bounds. Macroasia Corp. (MAC), Ayala-owned Integrated Micro-electronics, Inc., Waterfront Philippines, 2GO Group Inc. and Harbor Star Shipping just to name a few. Even the giant SM made double what the index did!

The low-interest rate environment is conducive to growth. After all, bank deposits earn even lower than inflation so it’s natural for the investing public to seek higher yield for their money. Stocks may prove the best option. Sentiments continue to be bullish.

For those afraid to invest directly in equities, pooled funds such as Unit Investment Trust Funds  and the mutual funds also present an alternative. Ideal for those who don’t have much time studying and analyzing individual stocks.

Properties

Just when the property markets can’t get any rosier, 2018 ushers in an even more upbeat sentiment. Real estate continues to be a darling investment for most Filipinos. After all, owning one’s home is a dream of every Filipino.  And that dream is not going to fade away anytime soon.

Low interest rates plus rising disposable income, especially after the passage of the TRAIN, allow accessibility to affordable home ownership. The “golden age of infrastructure” of the current administration should give rise to land values outside Metro Manila since the objective of decongesting traffic would allow previously hard-to-access areas to be more accessible.

Another advantage of investing in property is its ability to generate passive income through rental income. Property rental yields stand at 7 percent to 8 percent. That’s four times higher than time-deposit rates.

Capital appreciation is also another benefit of investing in real estate. According to the Global Property Guide, residential real-estate price index grew by 9.2 percent in 2016. So you not only earn through rental income but the value of your property continues to rise, as well.

2018 should prove to be an exciting year for us in terms of wealth. Don’t be left behind. Find the most suitable asset for you, and start investing.

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Kendrick Chua is a Registered Financial Planner of RFP Philippines. To learn more about financial planning, attend the 68th RFP program this March 2018. To inquire, e-mail [email protected] or text <name><e-mail> <RFP> at 0917-9689774.

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