Among the positive things that the pandemic has brought seems to be a newfound interest among Filipinos to participate in the stock market. Latest data from the Philippine Stock Exchange (PSE) showed that the average daily number of trades in 2020 soared 33.7%, while retail participation surged by 47.8%. This follows an increase in online accounts by 19.7% to 936,000, while non-online accounts grew by 3.3% to 460,553.
In this B-Side episode, Ruben Zamora, Metrobank’s First Vice-President and Head of the Institutional Investors Coverage Division, discusses with BusinessWorld why more Filipinos are more willing to “let their money work for them,” as well as how the beginner investor can sift through their options to start their financial journey.
TAKEAWAYS
You can be doing more with your savings.
“Putting your money to work is really about making your savings earn more and do a bit more work to build and accumulate wealth through investing,” Mr. Zamora said. “The days of earning interest from a simple savings account, those days are long gone. And that goes for everyone in the world, not just here in the Philippines.”
Investing is [not] a rich man’s game.
Whether with P10,000 or P100,000, there are good options to choose from for beginner investors.
“The good news here to those who are just starting out: You don’t need a big pot of money anymore to start the investing journey,” Mr. Zamora said. “Now more than ever, there are so many investment options for you to choose from. If you want a little bit more return and you’ve done your homework, and feel like you can tolerate and accept a bit more risk with your investments, start with an index tracker fund on the whole market that you know.”
Your participation matters.
Investing is not zero-sum game. More local investors in the market can help its general health in the long run.
“This is something healthy, something that we would welcome for our local capital markets. And the reason is that with the base of retail investors broadening out, more local investors participating, it means that we are not as reliant as we used to be on foreign investors or foreign capital flows,” Mr. Zamora said. “These flows can get pretty cold very quickly and we’ve seen that in this crisis, with foreigners exiting both the stock market and the fixed-income market.”
Do your homework. Especially if it’s about cryptocurrency.
“As a beginner investor, you don’t really want to invest in something you don’t understand well enough. You need to do a lot more homework, especially as you move up the risk ladder. And risk ladder-wise, I would put cryptocurrency right at the top,” Mr. Zamora said.
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