People say that there’s always opportunity in a crisis. This belief also applies to the stock market, wherein recessions or just red markets in general are believed to be good sources of investments that can blow the roof once things begin to stabilize. 

Now, does this belief have any bearing? Short answer is yes, but finding opportunities in a red market depends greatly on some factors. Here are some things you need to consider before getting into a red market frenzy.

Background Check

It wouldn’t be a good idea to simply buy anything in a red market. It’s important to remember that such situations are comparable to battlegrounds where you can’t fully know what to expect. Some companies behave differently from others which means some will gain and some will lose and the best way to make more accurate forecasts is by researching thoroughly.

 Finding companies to invest in involves a process called fundamental analysis, and an important part of this process is researching about the company you want to invest in. You have to know what type of industry they are in, if they’re relevant or not within and after the crisis, and make decisions accordingly. You also have to make sure that the company itself is managed correctly to ensure that you can expect better.

Protect Your Buying Power

While it can be tempting to think that putting more money can lead to higher rewards should a position you bought at its lowest makes a reversal at some point in the future, you must still remember to not go all out. Setting a reasonable budget is a crucial means of dealing with a red market frenzy because always remember, “You are wrong until the market proves you right,” and it might just bite you back if you don’t spend wisely.

Instead, protect your buying power enough to always be liquid when necessary. Do not spend all your money on one stock so that you’re still safe in case things get out of hand in the market

Diversify your portfolio

Connected to the last point, it’s good to spend your money on multiple other options because just shelling it out on just one or two can mean lesser chances of success. It’s a good idea to utilize different options from different industries, find some that complement or oppose each other so that you can minimize the chances of your losses to as little as possible.

A good example in the context of the pandemic would be to buy stocks from the food service industry, which is severely affected by the current situations, and complement that by buying from the medical industry, which is at an all-time-high. This way, whatever happens to either position, should the food service industry improve and the other experiences difficulties, you still balance out the outcome.

Red markets, for all their potential, can bite you back if you’re not careful enough. Where there is opportunity also lies risk, so consider these factors before making decisions with your money. Not only will you protect your portfolio, you might just improve it.

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Did you know that there’s only one way to beat inflation? 

That’s through investing your money so that it grows over time. But if you’re keeping your money safe in your piggy bank at home, over time that money would actually be worth less than when you first dropped it in the piggy bank. 

Inflation is the inevitable reality where costs of goods and services increase as time goes on, thus limiting the purchasing power of the money you currently own. Hanggang saan aabot ang 20 pesos mo? Well, in a few years, not very far. 

Investing in the stock market is one of those smart ways to invest your money to beat inflation because stocks outpace inflation, thus protecting your investment from the risk of inflation. Based on historical data, stocks have consistently delivered higher returns that exceed inflation.  The Philippine Stock exchange index has shown an average growth rate of 7.5% per year since 1988.

Why does it beat inflation?

1. It’s simple, you own a portion of a real company, with real products and services, manned by real human beings. None of it is fake or imaginary. Therefore, as economies grow over time, so do the businesses and the companies you bought shares from.  
2. Stocks beat inflation because, to account for the rise in costs, those companies increase their prices. Often, companies pass on this increase in cost to the consumers by increasing their prices over time. 

The stock market has shown the wonderful magic of compound interest to those who invest in it. This is why it’s smart to invest consistently and for long periods. 

Inflation is inevitable, but losing to it isn’t. Learn to invest and grow your money today so that even your 20 pesos now can push you forward in the future. 

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For decades, Filipinos have always held the belief that having kids equals being rich once they get old. If you ask your grandparents, they are probably the ones who firmly believe that their children are responsible for them during retirement. This is embedded in us due to the Filipinos’ deep-rooted family-oriented culture. Thus, they themselves have no retirement funds, savings, or investments that can sustain them during their geriatric period. 

Now, before you pass on this ideology to the next generation, we’re here to tell you that YOUR CHILDREN SHOULD NOT BE YOUR RETIREMENT PLAN. Relying on others for your retirement fund is too risky, considering that at retirement age you may not be able to keep working if your children cannot provide for you. While you’re still working and earning money, here’s what you can do to secure your retirement and be financially free:

1. Plan for your retirement as early as you can

Think about your retirement fund even when you’ve just started working. Set aside a portion of your income consistently for this. Your 30 years in the workforce means 30 years of income to be invested and saved, to survive the next 30 years of retirement.

2. Practice risk management on your finances

As you grow older, take fewer risks when it comes to investing. The fewer years you have earning money, the less risky your investments should be.

3. Only have kids because you want kids, not because you think they’re your ticket to a secure retirement

And here’s the most important tip: to really think about the reason why you want to have kids. If it’s to treat them as part of your retirement plan, then you should not be having kids at all. Children are your financial responsibility, not the other way around. This is the reality that you have to face when you’re thinking about building your own family.

Filial piety does not have to mean having to provide for one’s parents during their retirement. As Filipinos, this might be a difficult pill to swallow, but it’s better to face the reality as early as possible. This way, you’re assured of a secure retirement and a healthy relationship with your family in the future. 

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Out of everything humans experience in life, getting married and celebrating the union of two people is one of the only instances where wearing your rose-tinted glasses is accepted. But as much as we imagine weddings as the final step to reaching one’s happily ever after, we know that real-life begs to differ. 

The exchange of “I do’s” does not guarantee a love life without arguments or problems. The reality is that married couples encounter multiple predicaments, most commonly financial and money problems. In fact, financial issues are one of the leading causes of why marriages break apart. Here’s where a prenuptial agreement can help. 

A prenuptial agreement is superior to the Family Code which states, 

“The future spouses may, in the marriage settlements, agree upon the regime of absolute community, conjugal partnership of gains, complete separation of property, or any other regime. In the absence of a marriage settlement, or when the regime agreed upon is void, the system of absolute community of property as established in this Code shall govern.”

This means that with a prenuptial agreement, both parties are in control of setting the parameters governing their properties.

The absence of the prenup on the other hand entails that each of their properties, therefore, becomes conjugal, or owned by both spouses. Following this route becomes a monstrous predicament in the instance of a marriage break-up. This is why entering into a prenuptial contract helps avoid and alleviate future disputes in case the couple decides to separate. 

Different couples have different circumstances and needs, and often have adverse reactions to a prenup. But whether you’re a hopeless romantic or a brutal realist, taking the initiative to think about having a prenuptial agreement is a step in the right direction. 

With anything involving marriage, communication of both parties is required regarding this significant financial matter. As early as the dating phase with your partner, talk about money matters.  Discuss the family budget, how to handle money in the household, and other financial considerations. Both parties should be educated and open in order to be able to make an informed decision before they enter into marriage.

We may not have fairy godmothers who can deliver us happily ever after, but we do have ourselves to decide how we can live happily with our partner, for the rest of our lives.