They associate and understand RISKS literally. They don’t know how to manage the RISKs. People should also understand the RISK-REWARD spectrum. LOW RISK has LOW RETURN; but in reality, HIGH RISK equals HIGH RETURN! We should learn first the RISK-RETURN Trade-OFF. Know your RISK appetite in investing. Investing is more on long term. Investing is a habit of put and put and let it grow for millions after 5-10 years or more with a minimum of Five Thousand (P5000-) opening account and minimum of One Thiusand (1000-) additional every month or depending on availability of your fund to practice Peso Cost Averaging strategy. Time deposits are also good for your emergency fund but this should be done more on short term. If you want a LOW RISK but LOW RETURN investment, you can invest in BOND FUND or BALANCED Funds. But take note, they cannot outpace INFLATION! Inflation rate increases every year. In the Philippines, its between 6-7 %. So, if you invest with a rate of return LOWER THAN the inflation rate, YOU LOSE in the MONEY GAME!

Financial literacy is NOT just about numbers; its about MINDSET.

Mutual Fund:
-tax-exempt
-managed by investment companies
-has common shares (people are called investors/shareholders) w/ voting power
-monitored by SEC (secirities & exchange commission)
-has independent custodian to hold assets
-with full disclosure
-without reserve requirements
-with prospectus to verify its assets and company profile.

UITF:
-with tax (20% withholding tax???)
-managed by Trust department
-units of participation (no voting power)
-monitored by Bangko Sentral ng Pilipinas
-Bank itself holds assets
-has NO full disclosure
-with reserve requirements
-NO Prospectus

Mutual Fund vs Insurance (Friends or Foes?)

Mutual Fund:
-tax exempt
-returns are Not guaranteed (fluctuating)
-monitored by SEC
-Liquid (3-7 days)
-Flexible returns

Insurance:
-with tax
-Returns are guaranteed
-monitored by insurance companies
-not liquid (wait for maturity of your policy)
-has fixed returns

What I think is possible is to have an auto debit agreement with the bank. They would be debiting your savings account on a monthly schedule to credit and invest it in UITF product that you availed. I just don’t know how can you monitor it online. You really need to go and coordinate with them directly to ask these questions.

There is a certain period of time before you can pull out your money as each type of UITF account has its own holding period. You can put 5,000 pesos per month if that’s what you want. That would be better for peso cost averaging.

Another question, if i invest in UITF let say Balance Fund from BDO for 100K would it be possible to deposit some of my money into this account? Let us say I would like to put at least 5000 pesos per month also can i withdraw anytime fund anytime I want or there is a certain period before i can pull out my account. Please advise… thank you…

Unfortunately, you cannot do automatic transfer from one fund to another in UITF. However, you can withdraw your money from one fund and reinvest it into another fund within the same bank provided you meet the initial minimum requirements of the fund you’re trasferring into.

I’ll be planning to invest in UITF probably this coming April 2010 I checked the BDO Peso Balance fund NAVpU it seems that its rebounding now after the financial crisis. Would it be possible for the UITF to monitor the status of you investment online and also to automatically transfer lets say from blanace fund to equity fund?