Money Magnets

On the Philippine Daily Inquirer's September 8, 2008 issue, Citibank Philippines shared these four investment principles worth knowing especially when you can't tell if the market is going up or going down.

Principle no. 1: There's Never the Perfect Time.

Nobody knows what the future brings, anything can happen at any given time. That is why there really is no perfect time to invest. However, according to Judith Go, Citibank Philippines' Citigold wealth management director, "one thing is sure: Over the long term, markets tend to trend up."

There is no perfect, problem-free time to invest but it is possible to make a gain in spite of whatever situation the economy is in.

Following from the discussion in principle no. 1, we can say that it's not really about perfect timing but more of the amount of time spent in the market. If you can stay in the market for a long time through highs and lows, you will be rewarded with higher profits in the end.

Don't panic over short term trends. It's true that Asian stocks are down lately, but looking at it from a long term view, the truth is, stocks held 20 years ago will most likely be much more valuable now in market price.

Bear markets are not forever, don't panic right away.

Cash deposits, like savings accounts and time deposits, are not really the best places to put all your funds in. Although these investments are safer, it allows you to earn only a minimum amount of interest.

"While you may be a conservative investor, still the principle holds: Don't put all your funds in cash deposits. Venture out a little into stocks, bonds, and pooled funds (mutual funds or UITFs) investing in equities and bonds to have the chance to earn more gains. The higher the risk, the higher the potential gains. And the adage "Don't put your eggs in one basket" holds true. Diversify and watch your money grow."