There are a lot of investment options out there. Stocks, bonds, commodities, mutual funds, and now the PAG-IBIG MP2. Since many people are asking about which investment portfolio is better, I’ll be writing an analysis of stocks and MP2 in this article. Again, there is no such perfect investment. You can only get the right portfolio for you. And for some people, it’s a trial and error. You need to try out a couple of investment portfolios first before you can land on the right one. It’s never a perfect journey so you really have to be patient in everything that you do.
Catch me in my live training events! (quick plug)
The heart of why I do these seminars is I want to build a generation of Filipinos with the right foundation in stock investing. I want to bring smart investing to every Filipino around the world! If you would like to know more about how you could time the market check out the training below.
Stock Smarts Taiwan – February 15, 2020
Stock Smarts Manila: March 14, 15, 21, 22 & 28, 2020
Stock Smarts Singapore: May 16 – 17, 2020
Stock Smarts New Zealand: June 6 – 7, 2020
Stock Smarts Sydney: July 11 – 12, 2020
Stock Smarts London: April 18 – 19, 2020
Both investments have risks. Stocks are not for conservative investors. You can lose your money on it overnight. You can also gain a significant amount from it in a day. However, if you choose to trade or invest stocks, you should ready yourself for high risks. Stocks are not as stable as other investment portfolios, meaning, the stock market can change any second. Meanwhile, MP2 is for conservative investors. You won’t lose your money on it overnight nor gain in a day. The only risk you have to face here is whether PAG-IBIG will gain low or high dividends at the end of the year. So in terms of risk, stocks are riskier.
Stocks and MP2 have their own liquidity. You can withdraw stocks anytime. You can also buy and sell the shares of the available companies whenever you want. Unless you plan to invest it longer or you set it as long-term investments, stocks are very liquid. Although the MP2 is also a liquid investment, you can only get your principal at the end of its 5-year maturity. You cannot withdraw it except for the dividends that are paid out every year. During your application, you will choose between yearly dividends and one-time dividends at the end of the fifth year. If you select 5 years, you won’t be able to get even the dividends. So when it comes to liquidity, stocks are better.
If you want a tax-free investment, go for MP2. The government owns this portfolio so you can expect that they will not impose any tax on its own investments. During your application, the PAG-IBIG staff will inform you about the important things you need to remember about your MP2, including is its tax-free feature. With stocks, you have to pay for capital gains tax. But with MP2, you will get the whole amount of your earnings.