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In light of the chaos that the markets faced over the past years, it has become apparent that risk management remains to be one of the most important aspects of investing. 

Diversification remains to be one topic you can’t look over when thinking about managing risks. Portfolio diversification, the practice of spreading investments across different asset classes and sectors, is a fundamental strategy that can help investors mitigate risks and potentially enhance returns. 

Let’s deep dive into diversification.

The Essence of Diversification

Diversification is the art of reducing risk by investing in a variety of assets rather than concentrating resources in a single investment. The underlying principle of diversification is rooted in the fact that different assets tend to react differently to various market conditions and economic factors. By holding a mix of assets, investors can potentially offset losses in one area with gains in another, resulting in a more stable and balanced overall portfolio.

Benefits of Diversification

Diversification didn’t become popular just because it seems like the right thing to do. There are multiple reasons why it can help your portfolio grow.

• Risk Mitigation: One of the primary reasons for diversification is risk reduction. When investments are spread across multiple assets, the impact of a poor-performing investment is cushioned by the success of others. This lowers the overall risk of significant losses in the portfolio.
• Enhanced Returns: While diversification doesn’t guarantee higher returns, it can create opportunities for improved performance. If one asset class is underperforming, gains in other areas can offset those losses, potentially leading to more consistent and stable returns over the long term.
• Minimized Volatility: A diversified portfolio tends to experience lower volatility compared to a concentrated one. Fluctuations in individual assets have less impact on the overall portfolio, providing investors with a smoother ride during market turbulence.
• Adaptability to Market Changes: Different asset classes have varying levels of sensitivity to economic and market changes. Diversification allows investors to adapt their portfolios to changing market conditions, reducing the risk of being heavily exposed to a single market event.

Downsides of Diversification

Of course, you also shouldn’t diversify just for the sake of it. If done incorrectly, it can also cause your portfolio to suffer. Here are some con you could possibly experience.

• Reduced Potential for Extraordinary Returns: By diversifying across a wide range of assets, you may limit your exposure to potentially high-performing investments. While this is intended to reduce risk, it also means you’ll miss out on big moves in some assets.
• Over-Diversification: This one’s related to what was mentioned above. There’s a point at which diversification can become excessive, leading to what’s known as over-diversification. Managing a portfolio with too many different investments can become complex and time-consuming. It might also dilute the impact of successful investments, making it challenging to achieve meaningful returns.
• Diminished Simplicity: Diversifying a portfolio often requires managing and monitoring a larger number of assets. This can lead to increased complexity and difficulty in keeping track of each investment’s performance, which could potentially lead to suboptimal decision-making.

Strategies

Here are some of the strategies that you can employ should you want to consider having a diversified investment portfolio.

• Core-Satellite Approach: This strategy involves creating a core portfolio of diversified, long-term holdings and complementing it with other smaller investments that target specific opportunities or themes.
• Rebalancing: Over time, some investments may outperform others, causing the portfolio to become imbalanced. Regularly rebalancing—selling assets that have become overweight and buying those that are underweight—maintains the desired diversification levels.
• Risk Tolerance Consideration: Diversification strategies should align with an investor’s risk tolerance and financial goals. Younger investors may have a higher risk tolerance, allowing for more aggressive diversification strategies, while those nearing retirement might prefer a more conservative approach.

The Verdict

Diversification can be a powerful tool for investors. By understanding the benefits, principles, and strategies of diversification, investors can reduce risk and enhance returns. 

As markets continue to evolve, the timeless wisdom of not putting all of one’s eggs in a single basket remains to be a reliable piece of advice. Just make sure that you aren’t juggling too many baskets!

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Trading in financial markets can be daunting and complicated. However, some strategies and approaches can significantly ease the trading journey for individuals looking to navigate this complex landscape.  This article will explore how you can make your trading journey easier. 

Start with the Basics

Before diving into trading, educating yourself on how the financial market works is essential. Exploring trading strategies and the instruments you’ll be dealing with may help make your trading journey more manageable. There are many resources and websites you can learn from, such as InvestaUniversity, that will help you understand the basic concepts of trading, different types of markets, different investment vehicles, and more. So, now you know how the financial market works. You should now: 

Develop a Solid Trading Plan

A trading plan is your blueprint for navigating the market. It outlines your goals, risk tolerance, entry and exit strategies, and position sizing. Having a well-curated trading plan will help you align your goals and avoid irrational decision-making, which can lead to costly mistakes. You may create your trading plan by joining an online community and following financial market experts to develop your trading plan further. To test if your strategy will work, you should:

Practice with a Demo Account

Most trading platforms offer demo accounts that allow you to practice trading with virtual money. This is a unique way to practice your trading plan because this feature is a gamified trading platform for you to practice trading. You can practice your strategies risk-free before committing to natural capital. It can also help you get familiar with the platform’s features and interface. When transitioning from a demo to your live account:

Start Small and Manage Your Risk

Only invest capital you can afford to lose. Risk management is essential in trading. Never risk more than a small percentage of your trading capital on a single trade. This approach helps protect you from significant losses and keeps your emotions in check.

Use Technical and Fundamental Analysis

Technical analysis involves studying price charts and patterns to make trading decisions. On the other hand, fundamental analysis evaluates economic indicators, company financials, and news events that can impact the markets. Combining these two approaches can provide a more comprehensive view of the market and inform your trading decisions. As:

Staying Updated with Market News

Allows you to be updated on various economic, political, and global events that can influence markets. Staying informed about these developments is crucial because it can help you anticipate potential market moves and adjust your trading strategy accordingly. Some trading platforms in the Philippines offer financial news feeds that integrate current economic and financial news that may help with your trading decisions. And, of course, you keep in mind to:

Embrace a Long-Term Perspective

Because trading success is not built overnight, avoid chasing quick profits and adopt a long-term perspective instead. Focus on consistency and gradual growth rather than trying to make a fortune in a short period. Over time, small gains can compound into significant profits.

In conclusion, following these guidelines can make the trading journey significantly easier. Education, careful planning, risk management, and market analysis are key factors contributing to trading success. Remember that trading is a skill that takes time to master, and patience combined with persistence will ultimately lead to more profitable and enjoyable trading experiences.

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“Nagkaroon ng trading suspension yung $SPNEC… pero teka, ano nga ba ang mga trading suspensions? Ano nga ba yung difference between suspensions and halts?”

These scenarios may not happen all the time, but they are definitely something you should at least be familiar with. Let’s dive into suspensions, halts, and their impact on the markets!

Trading Halts

A trading halt is a temporary suspension of trading in a security. It can be imposed by the PSE, or the issuer (company) itself. Trading halts are typically put in place to prevent market volatility or to allow for the dissemination of important information.

There are several reasons why a trading halt may be imposed. Some of the most common reasons include:

• News event: A trading halt may be imposed in anticipation of a major news event. This could include mergers and acquisitions. The halt is done to prevent the market from reacting too quickly to the news and to give investors time to digest the information.
• Order imbalance: A trading halt may be imposed if there is a large imbalance between buy and sell orders. This can create a situation where the price of the security is being driven up or down artificially, and a halt is put in place to prevent further volatility.
• Regulatory investigation: A trading halt can also be imposed if a regulator is investigating a security or a company. This prevents any insider trading or other market manipulation while the investigation is ongoing.

Trading Suspensions

A trading suspension is a more severe measure than a trading halt. It is a permanent suspension of trading in a security imposed by regulators. Trading suspensions are typically imposed for one of the following reasons:

• Fraud: A trading suspension may be imposed if a company has been found to have committed fraud. The suspension protects investors from further losses.
• Bankruptcy: A trading suspension may be imposed if a company has filed for bankruptcy. The suspension prevents investors from trading in the company’s stock while the bankruptcy proceedings are ongoing.
• Regulatory action: A trading suspension may also be imposed by a regulator if a company is not complying with rules. This is to ensure that the company is operating in a fair and orderly manner.

When are Trading Suspensions and Halts Lifted?

Halts last within the day, as the reason is often to protect investors from increased volatility. On the other hand, trading suspensions can last for a long time. Since suspensions are caused by graver reasons, usually the company would need to comply with whatever the SEC needs in order for the suspension to be lifted.

In the case of $SPNEC, shares of the company fell below the minimum market float level required. For the suspension to get lifted, public float needs to get back up to at least 20%.

The Impact on Investors

Halts are typically less impactful given that the duration only lasts a day. While it could be perceived as a missed opportunity, it can also be said that the event only gives traders a smaller amount of risk.

On the other hand, trading suspensions can have a significant impact on investors. Investors will not be able to trade the affected security for the duration of the suspension. This can cause a lot of opportunity costs, along with increased risks.

Lifting of the Static Threshold

Here’s a bonus piece of information: a stock that resumes operations after a suspension that lasts a year will have no floor or ceiling. According to the PSE, the floor and ceiling of a stock won’t be in place until the next day of trading. 

While this can lead to large gains as seen in $GREEN, it often isn’t worth being a holder of a suspended stock. Uncertainty = risk, and a stock suspension gives a lot of uncertainty to investors. Although, it is worth knowing this if you’re a market timer who’s willing to trade these kinds of plays.

Keep in Mind

Even as a trader, it’s always important to know if something wrong is happening to the business of a stock. Beng subject to trading suspensions, and sometimes halts as well, can lead to a lot of risk for your portfolio.

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Personal finance is an integral part of our lives that influence our financial stability and future well-being. In an era of easy access to information, learning about finances has never been more convenient.

This article introduces content creators who provide valuable financial guidance tailored to various demographics.

Nicole Alba

Learning the fundamentals of investing, budgeting and cryptocurrencies can be intimidating for some. This is where Nicole Alba steps in. Nicole is a financial content creator with 452k subscribers, and is making a significant impact within the community by simplifying finance concepts for students and beginners. Her friendly and relatable approach makes her content stand out to those who might find finance intimidating.

Nicole makes her video funny while breaking down complex topics into bite-sized, understandable pieces, empowering her viewers to grasp the basics of financial literacy.

With a wide range of videos covering budgeting, saving, and investing, Nicole has managed to foster a sense of community among her followers. Her engaging storytelling and use of relatable examples help viewers connect with the subject matter on a personal level. From discussing the importance of emergency funds to offering practical tips on managing credit, Nicole Alba’s content is a valuable resource for individuals eager to embark on their financial journey.

Charm De Leon

Charm De Leon, a YouTuber from Cebu, has amassed an audience of 223k subscribers by focusing on investing, personal finance, and adulting. Her channel serves as a platform for viewers seeking guidance on financial management and the intricacies of investment. Charm’s content strikes a balance between informative discussions and relatable anecdotes from her personal experiences.

Charm’s investment insights are particularly valuable for someone who is new to investing. She sheds light in guiding her subscribers to which are the best investment vehicle for them. Her investment advice resonates with young professionals juggling work, bills, and saving at the same time. Charm De Leon also talks about self growth on her channel from  actionable tips for budgeting to managing debt, making her channel a go-to place for  individuals seeking practical financial advice.

Thea Sy Bautista

Thea Sy Bautista’s YouTube channel has 211k subscribers, is a hub of knowledge for professionals seeking to enhance their financial decision-making skills. Thea’s content is finely tuned to cater to the unique challenges faced by working adults, such as budgeting on a fixed income, making informed investment choices, and ensuring adequate insurance coverage.

By delving into topics like investment strategies, Thea equips her viewers with the knowledge needed to make well-informed decisions about their financial future. She also addresses the often-overlooked aspect of insurance, emphasizing its significance in providing a safety net for unexpected events. Thea’s ability to simplify complex financial concepts and present them in a relatable manner has garnered her a loyal following of individuals who trust her expertise to guide them towards financial security.

Ready To Be Rich

Fitz Villafuerte, the man behind Ready To Be Rich, is a finance expert with a passion for educating Filipinos who are interested in learning investments and the fundamentals of finance. He has made his videos that tackles financial concepts, practical budgeting techniques, and strategic investment practices tailored to the unique context of the Philippines.

One of the channel’s most noteworthy features is its adeptness at breaking down complex investment strategies into digestible pieces and has enabled many Filipinos to take their first steps into the world of stocks with confidence. From explaining the basics of stock trading to mutual fund investing. The channel equips the Filipinos with financial knowledge and  democratized investment knowledge, transforming once-intimidating concepts into accessible tools for personal finance. 

Keep In Mind

As digital platforms continue to reshape how we consume information, content creators have emerged as influential sources of knowledge. The beauty of these content creators lies not only in their ability to simplify complex concepts but also in their commitment to fostering financial literacy.

By following these creators, you can build a strong foundation in personal finance, make informed decisions, and confidently shape their financial futures. As we look towards a future that embraces digital education, these content creators exemplify the positive impact of technology on financial empowerment.

If you aspire to be a content creator that tackles personal finance, we’re inviting you to join us this coming October 13-15 (Online talks) and OCt 21, 2023 (LIVE in-person event) at the Investa Summit where we will talk about the new era of wealth and the power of content creation.  

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For many who are just starting to learn how to trade, the cost of learning comes into play. “Bilhin ko ba libro na ‘to?” “Sulit kaya pumunta sa event sa November?” Aminin mo na – a lot of us want to keep costs low, especially when it comes to learning new things. While you can save on some costs, trading events are something you shouldn’t miss.

It’s a whole different experience when the lessons are taught live

The speakers most likely already have free material on the internet. They might even have youtube videos that cover a variety of topics. However, trading events give speakers much more freedom to fully express their wisdom. 

If you watch how they teach during, you’ll notice that a lot more nuances are covered. More details are usually discussed. Emotions are also brought out which could give more emphasis. Speakers also become more able to gauge how well the audience understands the lesson. In contrast, there’s a disconnect when creating online material since there’s no real-time feedback.

Speakers can directly address questions

Live discussions can be held between learners and speakers. Attending trading events live holds the advantage of allowing for real-time interactions. Since speakers can gauge the audience’s understanding, trading events enable direct communication, fostering an environment where questions can be asked, discussions can take place, and ideas can be exchanged. This active engagement not only enhances your understanding but also encourages critical thinking and collaboration.

You’ll notice that trading events capture your full attention

When consuming online content, you’ll notice that distractions are everywhere. By attending live trading events, you’ll be put into a better ambiance to learn from the wisdom of others. The physical presence of both presenters and fellow attendees creates an atmosphere conducive to focused learning. You can fully immerse yourself in the content without the temptation to multitask or drift away.

Best of all, you can meet like-minded people

It can’t be stressed enough how important it is to build your network. In any field, being able to talk with others allows you to gain knowledge and experience faster. Attending trading events provides you with a unique platform for networking. You’ll have the opportunity to connect with others and even create communities. Fun fact: some communities started from interactions between traders during events!

Is it worth-it to attend trading events?

Online content has undoubtedly been a game-changer for learning. However, face-to-face events still hold a lot of value in learning new skills. The real-time interactions, ambiance, and overall experience are things that online learning just can’t replicate. Trading events are definitely something you should look forward to attending from time to time.

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Managing personal finances is essential to have financial stability and avoid spending beyond your budget. Creating a budget sheet may help you to be frugal and be responsible with your finances. 

This article delves into the significance of expense tracking and guides you through the process of creating an effective budget sheet.

The Significance of Tracking Expenses

Everyone knows the line “with great power comes great responsibility.” This applies to our own finances as well. Either through an allowance or when you start earning a salary, the freedom to spend as much as we want can cause us to overspend.

Even just tracking daily expenses through your phone can help you a lot! You’ll find out where your money goes, and you can better assess where you should focus your funds on.

To track your expenses, what you can do is to gather all your financial records, such as receipts and bank statements. Create categories for your expenses, such as groceries, transportation, entertainment, and utilities. Utilize spreadsheets, budgeting apps, or even pen and paper to record every transaction accurately. By consistently updating this record, you’ll be able to observe patterns, identify areas of excess, and make necessary adjustments.

How to Create Your Budget Sheet

Once you’ve listed down your monthly expenses, The next step is to create a comprehensive budget sheet. A budget is a roadmap for your financial journey, ensuring that your resources are allocated accordingly. Here’s how you can go about creating an effective budget sheet:

1. Determine Your Income: Calculate your monthly income from all sources. This includes your salary, allowances, and any additional income streams. 
2. List Fixed Expenses: List down your fixed monthly expenditures, such as rent, mortgage payments, insurance premiums, and loan repayments. These are non-negotiable expenses that need to be accounted for.
3. Categorize Variable Expenses: Categorize your variable expenses, like groceries, dining out, transportation, entertainment, and shopping. 
4. Allocate Savings: Dedicate a portion of your income to savings and investments. This is crucial for building an emergency fund and securing your financial future.
5. Set Financial Goals: Define short-term and long-term financial goals. Allocate funds towards these goals within your budget, such as paying off debt, buying a car, or saving for a vacation.
6. Calculate the Difference: Subtract your total expenses, including fixed and variable costs, from your income. A positive difference indicates that you’re living within your means, while a negative one highlights potential overspending.
7. Adjust and Refine: Regularly review and adjust your budget to align with changing circumstances. Life events like pay raises, new expenses, or unexpected costs may necessitate modifications to your budget sheet.

Keep In Mind

In a world dominated by consumerism and financial intricacies, being responsible with your finances is not just a choice, but a necessity. Tracking your expenses and creating a budget sheet serve as the pillars for achieving financial stability and realizing your dreams. By Embracing budgeting practices, you embark on a journey towards financial freedom, allowing you to manage your money rather than letting it manage you.

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Many of us know that having an emergency fund is essential. Yet, not a lot of us understand why it’s important to have one. Life is full of unexpected twists and turns, and an emergency fund can serve as your safety net. 

Here are the top reasons why you NEED to have one.

Financial Protection in Uncertain Times

This reason is what many of us know. Life is unpredictable, and no one can predict when a financial crisis may arise. Whether it’s a global economic downturn, a family emergency, or an unexpected natural disaster, having an emergency fund can help you weather the storm without derailing your long-term financial goals. It serves as a cushion, protecting you from having to rely on credit cards or loans in times of need.

Stress Reduction and Peace of Mind

Financial stress can be very overwhelming at times. Sometimes you’ll feel like you’re not yet secure. Other times, it might feel like you haven’t progressed at all. Having an emergency fund can allow you to have peace of mind. Aside from knowing that you have something to turn to during crises, you can also treat it as your progress bar. Being able to look at how much you’ve been able to set aside can you let know for yourself how well you’re able to handle your finances – and how capable you can be should emergencies arise. 

Emergency Funds Prevent Debt

An extension of being secured during tough times, emergency funds also help you to stay away from debt. Without an emergency fund, people usually resort to borrowing money. For many low-income earners, this usually means continuously taking debt. High-interest rates and mounting bills mount up until they become hard to manage. Having an emergency fund ensures that you won’t have to accumulate debt during challenging times and can maintain financial independence.

Faster Recovery from Financial Setbacks

With an emergency fund in place, it becomes easier to handle setbacks. You wouldn’t need to restart having to save up for a business. You wouldn’t need to tap into long-term investments. Of course, you have to build up your emergency fund again. However, the setback won’t cause serious harm to your life, and your investments. 

Flexibility in Career Decisions

Having an emergency fund can offer the freedom to pursue various career opportunities. You won’t be afraid of being jobless for a few months because you know that you already have a safety net. On the other hand, living paycheck to paycheck can have a big impact on your flexibility since having a steady stream of income becomes a necessity for you.

Should you have one?

The importance of an emergency fund cannot be overstated. It is a fundamental aspect of responsible financial planning and provides security and stability in the face of life’s uncertainties. By having one, you are taking a proactive step towards safeguarding your financial future and ensuring that unexpected events don’t disrupt your overall financial well-being. 

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