WITH so much economic uncertainty globally during this time, I'm sure many are confused and fearful of what lies ahead. I don't want to be overly optimistic because what's happening now is a bit worrying. However, I am optimistic that this storm shall pass and when that time comes, we want to be ready as well. That being said, we need to make sure we survive the next few months. In this column, I look into some investment options and what strategies you can use to either take advantage or lower your risk and still get modest returns on your investments.

Is it still worth investing given these uncertainties?

Yes, it is. But as always with investing, we should be cautious on where we put our money and we should always understand the risk of what we're getting into and the strategy we are executing. Also finding the right investment and strategy will be key regardless of when you invest. My favorite quote about this comes from Warren Buffett, "Risk comes from not knowing what you are doing." So, the more we know, the lower our risk gets.

Where should I be investing at this point?

Picking an investment for me has been more about comfortability on what I know than the rate of return. Don't get me wrong, the rate of return matters to me; it's just that I prioritize my knowledge in the investment instrument more than the rate of return. This is one reason why I have not invested in cryptocurrencies. I just don't know enough. So, what investments can we consider?

In 2022, I have gotten into the bond market starting with lower risk corporate bonds like Ayala Corp. (AC) to a bit higher risk bonds like Filinvest (FLI). Both are three-year terms with 4.5-5.5 percent gross interest. Potential returns are not as high as the equities market, but I felt with the shaky markets so far, these were "safer bets." Plus, I stay away from the volatility of the markets.

I know, I know, the market has been battered for the course of the year. But my mentality when it comes to the stock market is that "there will always be opportunities." And there's no better opportunity than a market which has dropped significantly over the course of the year. I will still be very cautious though, as there's just not enough interest in the equities market, thus the downtrend. But I've been watching a few stocks the past few weeks and I will be ready to buy when I like what I see. The markets will recover, especially the companies that are financially sound. The only question now would be when.

Pooled funds (Mutual funds, UITFs)

Same with the equities market, pooled funds (whether equities or bond funds) have dropped year-to-date. A more cautious strategy I would take here is to invest regularly (monthly or twice a month) in smaller amounts. This way my risks will be a bit lower. I will be watching the equities market closely to see if the PSE Index would go below the 6000 level and will probably be more aggressive when it does. For now though, it's more cautious investing for me in this front.

Why would a VUL fund be part of the "investments" section given that it is an insurance first product? Well, we are still in the midst of Covid-19, hence, it would be good to invest in insurance especially when you have none. The investment part then becomes a bonus. Some VULs offer shorter pay periods (one-time pay or three years to pay) while providing health coverage benefits as well. A shorter pay period would mean more will be put into your investments early on. Thus, making you experience some short term returns in case the market makes a recovery in the coming months.

Jeremy Jessley Tan, RFP is one of the pioneering Registered Financial Planners in the Philippines. To learn more about personal-financial planning, attend the 97th RFP program in August 2022. To inquire, email [email protected] or text at 0917-6248110.