The myth about the one best in­vest­ment

Cebu Daily News - - OPINION -

Ques­tion: If you were to pick the best in­vest­ment, which would it be? Asked at “Ask a Friend, Ask Efren” free ser­vice at www.per­son­al­fi­ and Face­book.

An­swer: I had re­cently taken a fancy to buy­ing a mir­ror­less dig­i­tal cam­era. Th­ese are cam­eras that are not the sim­ple point and shoot, like the in­sta­matic cam­eras of yesteryears but are also one step down from the pro­fes­sional dig­i­tal sin­gle lens re­flex (SLR) cam­eras.

The ad­van­tage with mir­ror­less dig­i­tal cam­eras is that the ab­sence of a mir­ror al­lows them to be small and handy, es­pe­cially if what you want is a bet­ter than cell­phone cam­era qual­ity to cap­ture mem­o­ries dur­ing a va­ca­tion trip.

Many mir­ror­less dig­i­tal cam­eras also al­low for easy trans­fer of pictures through Wi-Fi or Blue­tooth so that shar­ing can also be faster. And some of the more ad­vanced ones are even ca­pa­ble of cap­tur­ing 4K videos.

So, I did my re­search on which mir­ror­less dig­i­tal cam­era would be the best. Well, guess what, even within just this one cat­e­gory there were many mod­els to choose from. But then I came upon this one re­view that seemed ob­jec­tive enough as it rec­om­mended sev­eral brands. It also did not rec­om­mend the best mir­ror­less dig­i­tal cam­era, just the one that is suited for your needs.

The same goes with in­vest­ing. There is no one best worldly in­vest­ment, no one size fits all. In­vest­ments are af­ter all, mere tools. Your in­vest­ment can be de­ter­mined by the po­ten­tial re­turn it needs to make. Just look at the wealth for­mula in MS Ex­cel, rate=(nper,pmt,pv,fv).

The for­mula means that the rate of re­turn that will de­ter­mine the in­vest­ment that is suit­able for you is a func­tion of the years you have to grow your in­vest­ment (nper or num­ber of pe­ri­ods), the pe­ri­odic amounts you can add to your in­vest­ments (pmt or pay­ment), the start­ing funds you can in­vest with (pv or present value) and the amount that you will need to fund a fu­ture goal (fv or fu­ture value).

And it doesn’t stop there. If by chance the re­turn you need to make is too rich for fi­nan­cial se­cu­ri­ties or too risky for you, then you will need to tem­per the vari­ables in the wealth for­mula to lower the re­turn you need to make that is com­men­su­rate to the risk you want to take.

But if you want to know that one in­vest­ment that is suited for all and that beats all other worldly in­vest­ments, it is the in­vest­ment in Faith. It is only this in­vest­ment that has ab­so­lutely no po­ten­tial for losses. It is the only in­vest­ment that pro­vides guar­an­teed in­fi­nite re­turns for this life and be­yond.

(Efren Ll. Cruz is a Reg­is­tered Fi­nan­cial Plan­ner of RFP® Philip­pines and a sea­soned in­vest­ment man­ager. He can be reached at (0917) 505-0709 and at efren@per­son­al­fi­ To know more about per­sonal fi­nance, please visit www.per­son­al­fi­ To be­come a true fi­nan­cial plan­ner, at­tend our 21/2-day train­ing in the Visayas and Min­danao. De­tails are avail­able at www.per­son­al­fi­­train­ing.html.)

Money Mat­ters efren@per­son­al­fi­

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