Short Term Bond Fund
Invest in a portfolio of short-term securities and money market
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In the world of investing, chances are you may have to encounter technical terms. These investment techniques can help your investment grow and help earn returns. But the problem is, these terms are oftentimes complicated and may be hard for you to understand.
But for us, we believe that a sound strategy should not only benefit your investment – it should be also simple enough for you to appreciate how it works.
That’s why we recommend Peso Cost Averaging (PCA). It’s a simple and useful technique made for newbie investors like you!
How does it work?
You’re the new kid when it comes to investing. You’re quite unsure when’s the best time to buy or sell your investment. PCA erases the guessing game and lets you invest the same amount of money on a regular schedule – weekly, monthly, annually, whatever works for you. It’s as simple as regularly saving in the bank!
PCA is a process of buying shares, regardless of the price. You can buy more shares if the price is low or buy fewer shares should the prices go up. All you need to do is buy shares consistently over a period of time.
What are the benefits?
With PCA, there’s lower cash outlay. So if your goal is to invest Php 30,000, you don’t need to have the entire amount available on your first day of investment. PCA allows you to invest in equal installments according to your liking – say, regularly investing Php 5,000 for the next six months.
The act of spreading this investment over time, compared to a one-time big-time investment, reduces the effect of buying shares at a wrong time. Likewise, the cost per investment bought varies from period to period. This method helps lower the cost of investment for you.
Philam Strategic Growth Fund
Months | Date | NAVPS | Amount Invested | Units Bought | Amount Invested | Units Bought |
---|---|---|---|---|---|---|
1 | 25-Sep-2014 | 549.93 | 10,000.00 | 18.18 | 50,000.00 | 90.92 |
2 | 27-Oct-2014 | 533.83 | 10,000.00 | 18.73 | - | - |
3 | 25-Nov-2014 | 550.9 | 10,000.00 | 18.15 | - | - |
4 | 29-Nov-2015 | 540.62 | 10,000.00 | 18.50 | - | - |
5 | 25-Jan-2015 | 566.57 | 10,000.00 | 17.65 | - | - |
Total Amount Invested | 50,000.00 | 50,000.00 | ||||
Average Price Pain | 548.37 | 549.93 | ||||
Total Shares | 91.22 | 90.92 | ||||
Value at end of period | 51,680.34 | 51.512.92 |
Important: The example above explains the concept of Cost Averaging and is for illustrative purposes only. The data used is hypothetical and the actual unit price will depend on prevailing market condition.
PCA is the perfect option if you don’t have a big lump sum to start an investment, but planning to invest in your financial goals in the long run.
If PCA interests you, get in touch with one of our financial advisors to learn more about it!