Best investment in the Philippines for long-term goals this 202229 August 2022
More than two years after a pandemic riddled the entire world, economies have reopened and businesses have fairly recovered from the recessionary effects of the Covid-19 crisis. Employees are returning to the physical office, while many have retained jobs in the comfort of their own homes. In addition, students are expected to attend their classes face-to-face after two years of virtual learning.
From that point of view, the Philippines and Filipinos at large could freely harbor hopes of better days ahead. And, for people who are on the lookout for investments to maximize their hard-earned money on, the same level of optimism can be said for them.
But first, what is an investment?
When a person purchases something to generate future income out of it, like an asset or a property, it's called an investment. An investment fund can vary from short-term investments to medium-sized, as well as long-term investments, on which this article will be centered.
Short-term investments are those with low risks but with understandably lower rates of return as well. This is best when it comes to the flexibility that it provides when the immediate need to withdraw money comes. The best short-term investments include time deposits, savings accounts, and money market funds.
If you have a financial target in mind that requires attainment in about four to 10 years, it falls into this category. Equity funds or unit investment trust funds (UITFs) are best for investors with moderate financial targets. This type of investment thrives on affordability, liquidity, professional fund management, higher yield potential, and transparency.
While the monetary rewards are not going to be immediate, investing for long-term goals will be something you will be thankful for come compulsory retirement age. Reaping retirement benefits is just an example of a great financial gain after entrusting your money to long-term investment funds. Without further ado, let's get to some more details below.
Best investments in the Philippines for Long-Term Goals
The following are the best investment options for long-term goals that will allow you to fulfill the financial dreams that you deserve after years upon years of hard work.
Exchange-traded funds (ETFs)
Long-term bond funds
Cash value life insurance
1. Invest in the stock market
When you make an investment, especially if made with substantial sums, it's a significant financial risk. But with buying stocks at the Philippine Stock Exchange, the risks are only matched with higher potential for revenue.
Investing or buying stocks enables you to become a shareholder of a profitable corporation listed on the Philippine Stock Exchange Index that you invested money in. For as low as P5,000, you can open a brokerage account to jumpstart your investment strategy.
2. Invest in mutual funds
Mutual funds obtain their supply of investments from a pool of individuals to form an asset base massive enough to cater to a substantial number of investors. Moreover, it necessitates a fund manager to make expert decisions for your investment portfolio. Just like stocks, people become shareholders in a mutual fund, and gain profit through securities investments.
There are doubtless reduced risks in mutual funds, but this great advantage comes with a catch in the form of higher operational costs and fees compared to other investment forms.
3. Invest in ETFs
If your concern is affordability, ETFs, which are a type of index funds, are cheaper than mutual funds. Unlike the latter, you don't get charged load fees or a percentage of an amount you invested. It is also not actively overseen by professional fund managers, which is another reason for its cost efficiency. Not needless to say, employing a fund manager will result in a greater expense ratio given the need for management fees.
How to earn money from it? The fund will increase in value and profitability over time and hence can be sold for revenue generation.
4. Invest in long-term bond funds
In the Philippine setting, bonds are one of the most potent investment vehicles to generate high-interest yields in financial markets. Bonds are securities that may come in the form of government bonds and corporate bonds.
Simply put, bonds are issued by corporations or governments with the motivation that the borrowed money will be returned to investors upon the maturity date with interest rates. Generally, bonds are safer than investing in stocks, as bonds offer more stability and consistency of returns. But still, risks are not completely absent.
5. Invest in cash value life insurance
Life insurance policies are benefits for the loved ones that a person leaves behind in the event of death. Unless you have a term life insurance, which does not support this investment feature, cash value life insurance is an investment vehicle that you could consider hopping on.
A portion of your premium will go to your savings account, of which you will have the option to invest as it accumulates, or opt for loans.
But here's the catch: this type of life insurance allows for much higher premium payments. It also pales in comparison to other investment schemes when it comes to potential earnings. But be that as it may, it is still a decent investment if you want to hit two birds with one stone. That is, earn while you're still alive, and for your loved ones to receive significant benefits when it's time.
6. Invest in real estate
A real estate investment comprises owning properties, such as a house and lot, with the purpose and prospect of generating income. Investing in real estate is legitimately lucrative, given its potential for cash flow, tax perks, and protection against the effects of inflation.
When it comes to stability and steady price increase, real estate investors are promised much lesser risks compared to investing in stocks. Even at the peak of the coronavirus crisis, real estate investment has proved to be resilient and has managed to not only maintain but also grow its profitability.
Types of real estate investment include, buy and sell, buy and hold, rental properties, and Real Estate Investment Trusts (REITs). The latter type allows you to invest without necessarily buying a real estate property. It operates just like stocks, but invested in publicly listed corporations managing commercial real estate, such as office buildings, shopping centers, restaurants, and hotels.
If real estate sounds good for you, or if you're looking for an affordable house and lot for permanent residency, Lumina Homes has an excellent track record as a developer of affordable and strategically located homes for your convenience.
What is more, Lumina is an award-winning homebuilding brand recognized by Pag-IBIG Fund as the "Number One" Developer in terms of housing loan takeout and having served the most number of housing borrowers.
For further reading: Why Homeowners Choose Lumina Homes
'Comfortable is rarely profitable'
No investment products are totally risk-free. There is always a potential for financial losses, which could be minimized, if not prevented, by studying the ins and outs of various investment vehicles. It takes time to master, and necessitates a ton of research, analysis, and contemplation.
In investing, what is comfortable is seldom profitable, said American entrepreneur Robert Arnott. Having this wisdom in mind when you decide to start investing, it gives you the intellectual maturity that comes from knowing risks are an integral part of investments.
But all things considered, if you lose something in your journey, may it not be your desire to dream and pursuing that dream.
Try Lumina Homes' loan calculator and get an estimate computation for your preferred Lumina property and home model.