Invest More Effectively - Marvin Germo

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Invest More Effectively

By: Marvin Germo | June 17, 2014

The word effective is defined by Google as:  being successful in producing a desired or intended result.  The same should go for investing.  My greatest desire is for you as an investor to be effective in your investment that your investments help you reach your goals of financial freedom.  For this article, our regular Tuesday columnist Rienzie Biolena will dot all the “x’s” and they “y’s” and what it means to invest more effectively.


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Too often, a large number of people invest without any particular goal in mind. They invest either just for the sake of investing, or just for the gains it may bring. The raison d’etre for investing is often muddled in the flurry of market movement, the hottest stock picks, or the latest trend.

 But what most people forget is that investing is not merely buying and selling stocks and enjoying the profits. Investing is done for a much higher cause: investing is for something.

 That something may be a child’s college fund in the future. It may be for a retirement fund, or a grand vacation. Investing may be for a raising capital for a dream business, or a future purchase of real estate. It may even be for short-term goals such as a Pregnancy Fund (money intended for check-up and other hospital bills), or a trip abroad several months’ time.

 Whatever it may be, that something represents a specific and particular goal in the investor’s life. And all movements—trades, buys, sells, or holding on issues—are to be done in light of these goals. The primal question thus is: “How would this (investment or trade) bring me closer to my goal?” Because if it would not, then it may just be an utter waste of time.

 For if an investor is not clear with his or her goals, chances are that huge market swings will push him or her around—enjoying profits on upswings or realizing losses on down swings. But if the investor is crystal clear on why s/he is investing, then s/he would have the fortitude to withstand the market’s movement: buying on downtrends for more shares and holding on uptrends, as the money is still not needed yet.

 But how can this be done?

 Simple: just match the Goals with the Investments. Simply put, the goals should dictate what investment instrument should be the vehicle: long-term goals (like college tuition for a newborn) are typically in the stock market, medium-term are in a mixture of stocks and bonds, while short-term goals (typically within 1-3 years) are into fixed income products.

 This matching, however, means that goals are moving and thus, the content of investment should be changing as well. Thus, while an investor is pumping up his investment in the stock market for a baby’s college tuition, he may go out of the stock market bit by bit, shifting into a more conservative fund as the goal becomes nearer. Thus, he may go out of the stock market altogether a full two or three years before college in order to preserve and protect his gains and shifting it to fixed income products.

 The world of investing is as extensive, as it is deep. Simple and complex at the same time. But these principles can help investors stay the course and be more effective. As a popular jargon says, “investing is not a sprint, it is a marathon.”


RPB Profile PicRienzie P. Biolena is one of the pioneering Registered Financial Planners of RFP Philippines. He is also an Accredited Investment Fiduciary of Pennsylvania-based fi360, a Certified Financial Consultant from Institute of Financial Consultant-Canada, and a Chartered Wealth Manager of the American Association of Financial Management.


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