Stocks: An OFW’s guide to making money
Filipinos can make their remittances count with prudent investing, but the key is to start saving
Overseas Filipino workers (OFWs) send home around $32 billion (Dh117 billion) a year. Most is spent on consumption — food, services (like education) and consumer goods, not investment.
Investing in stocks back home can be difficult as an OFW. Fortunately, you can invest now through a broker, or even through the internet. Here’s a simple guide on how to do it.
Do your homework
There are a number of resources available online. You can refer to online articles, YouTube videos and blogs to boost your knowledge from Grade 1 to masters. Educating yourself is the biggest investment you can make.
10–20–70 rule
This simply means that if your salary is 100, you live only off the 70, save the 20 and give the 10 to those in need.
Use a licensed broker
Invest through a licensed stock broker. Don’t believe self-professed experts or gurus — you may be dealing with sweet-talking scammers.
These days, it’s fairly easy to check the credentials of financial outfits, by checking with multiple sources, including the website of regulators.
Pick only giants
These ‘blue-chip’ stocks belong to financially-sound companies. Markets go up and down, but these companies have stood the test of time. They also declare dividends.
Deal with growing pains
First, find out your risk profile as an investor. Are you a highrisk taker, or a low-risk taker? Your fund manager or stock broker, if they are professional, can help you find out. This will let you determine your tolerance to the pain of loss in case the market goes against you — as well as your appetite for gains.
Trust funds
Trust funds, or unit investment trust funds (UITF), are managed by professionals. You can invest in a UITF with as little as 5,000 pesos. There are certain fees that apply.
SSS Flexi Fund
You can invest in one for as little as 200 pesos per month. To qualify, you must pay the full monthly SSS contributions of 1,760 pesos as an OFW. It offers a minimum guaranteed earnings of 4 per cent — plus an annual incentive benefits.
Online trading platforms?
Signing up with an online Philippine trading platform, like COL Financial, allows you to buy and sell stocks online. But there are certain things you need to do and learn.
Mutual funds
For as little as 5,000, and with addition investment of 1,000 pesos, you can start investing in a mutual fund. All mutual fund companies are regulated and go through regular audits. Fund managers charge investors certain fees. You can check their daily performance, based on net asset value. There are currently more than 30 mutual funds licensed to operate.
The key: Time, not timing
Do not expect to hit the jackpot in the stock market instantly. Pick your broker well, find out what investment vehicle that suits your risk profile the most and enjoy the ride. The key: Start today.
■ Disclaimer: The names of companies or funds mentioned in this article are not endorsements. This is only a guide. Gulf News is not responsible for losses or damages through any misinterpretations or undue use of these generic tips.