September 16

A Day Well-Spent: Why Investing is Important (Part 2 of a series: the COL Summit journal)

A Day Well-Spent: Why Investing is Important (Part 2 of a series: the COL Summit journal)

September 16, 2016

COL CEO Dino Bate set the tone of the day with his opening remarks during COL’s 2016 Wealth Building Summit for the Filipino Investor.

 

Mr. Jed Velarde, COL Wealth Building Analyst, continued the momentum and gave a talk on the importance of investing.

 

He declared, “we all desire financial freedom. And financial freedom is simply doing what we want to do without the constraint of money. To aim for financial freedom, we must learn how to let money work for us. This is where investing comes in.”

 

He even jokingly said, “are you RETIRED or TIRED lang?” Of course, retiring happy is something we would want to happen to each of us. And we could only do so by investing NOW.

 

He went on to impart sound advice on building wealth through investing. Here are six (6) Key Take-a-ways from his talk:

 

1. Velarde advised that we must safeguard our investment capital against inflation because inflation is like an hour glass. Inflation is actually committed to eat up the value of your money while you sleep.

 

2-2

 

2. The stock market is an effective way for us to invest our money. There are two ways to make money in stocks: Price Appreciation and Earning Dividends. Stock prices generally appreciate in value over time. On the other hand, publicly-listed firms also usually give stock dividends to their shareholders.

 

3. In a simple explanation of the stock market, he stressed that instead of an individual buying a property by SM Prime Holdings such as an SMDC condo unit in Makati, why not buy a share of stock of SMPH? Real estate prices may appreciate through time, but price appreciation of stocks also increases through time and sometimes even in a more significant amount than in real estate.

 

Investing in Property VS Investing in Stock

Source: COL Financial, SMart Investing Summit
Source: COL Financial, SMart Investing Summit

 

4. There are Four Disciplines of Stock Investing:

2-4

Invest Using Diversification

Analogy: When you ride an elevator, it’s better to ride a NEW elevator with many strings attached to it than to ride an old elevator. Both will take you to your destination. But an old elevator is scary – with only one or two strings attached to it, you might just fall or get stuck.

Similarly in handling our investments, let us not focus on only one asset class and/or in only a single stock industry or sector. Diversify.

 

Choose Good Quality Stocks

Choose a stock that continues to earn, that are managed credibly by the company and that has a growth potential over the medium and long term period.

 

Invest Regularly

Part of financial success is financial discipline. You must invest regularly and it should be part of your daily life routine.

 

Invest over Long Term

You have to have a long term perspective in life. Look at time as part of your investment success.

My personal take here is this: We all want to live long. If we want to live long and enjoy life, then it is just right to keep our financial perspective with a long term view to compensate for the expenses that we will be needing in the future.

 

5. Delaying your investments now will have repercussions in the future.

 

6. You get to bless others through investing. We are blessed to be a blessing. Since we invested early, we could help other people without thinking of our own personal needs. THAT is financial freedom: action turning into another action, a ripple effect that blesses other people.

 

Up next: Sharing the Five Investing Styles and what to watch out for as told by the Chairman himself! (This will be uploaded Saturday morning).

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