[Fin Talk] Levelling Up of Filipino Investors
By Arlyn Tan
A client asked me where he would invest his P1,000, P10,000 and P100,000. He wanted to try different companies. As I answered his question, I realized how the landscape of opening an account to maintaining investments had tremendously changed to a hybrid experience of digital, over the counter, and through a financial advisor. I recommended G Invest for the 1K and 10K via BPI mobile app. And he relied on my advice for the 100K placement.
Whether there is a pandemic or none, investing is a must after purchasing life and health insurance plans. Investment protects your funds from inflation by leveraging on the growth of listed companies. When risk and time horizon profiles are properly assessed, the individual can start investing while he is learning about the instruments.
The sudden uptrend of Philippine stock market accounts in 2019 to 1.2M represents a 12.7% increase from 2018. 63.7% of these accounts are online accounts while the rest are investor accounts with traditional brokerage firms. Retail investors owned 97.7% of total accounts in 2019 which reflects a growth of 12.9%. According to PSE President and Chief Executive Ramon Monzon, the numbers in 2020 will significantly increase because of the shift in trading format preferences and increased participation in IPOs.
The introduction of the feeder funds in the market by trust and mutual fund companies enable the investors to invest in global target funds. Investing in multiple feeder funds enables you to build a diversified portfolio since the components are invested in different sectors and countries. With these funds, you can now invest in companies like Apple, Amazon, Google, Shopify or Alibaba.
According to a Hootsuite’s report on global internet users in April 2021, the average daily time spent using the internet by each user is 6 hours and 56 minutes. In the Philippines, there were 152.4 million mobile connections which is equivalent to 138.2% of the total population (110.3 million) as of January 2021. While the number of internet users increased to 73.91M by 4.2M between 2020 to 2021, the number of mobile connections decreased by 15M during the same period.
The advancement of platforms, availability of local & global l funds, and increased usage of the mobile phone create new opportunities to retail investors.
High Tech vs High Touch
For the digital natives and immigrants who are comfortable in basic and advanced investing , the G Invest, SeedBox, E-Toro or Interactive Brokers can be the options. The mobile and web app allow trading of shares and subscription to global funds. They can learn the investment styles which include diversification, peso cost averaging, or buy low sell high, through self-learning or being part of the community of investors.
The value-added service of seasoned investment advisors is the guidance before and during the investment journey. He is there to make sure that the investment strategies are aligned to your personal goals. A buy and hold strategy can work in the past, but the present complex investing environment needs active management. Trusting your advisor can minimize the impact of volatility on your emotions and decisions.
The Happiest Investor
The Filipino investor is the happy winner in this pandemic and in the new norm. The joy comes from the prospects of increased choices of products and methods. The evolution of the ecosystem which is composed of consumers, mobile phones, internet, regulators, institutions, investment advisory and technology accelerate the wealth formation of the present and future generations of Filipinos.
Arlyn Tan is a Strategic Wealth Consultant. She helps individuals and organizations on how to maximize the value of their money through risk, health & wealth management. Her mission lies in making sure that clients achieve 3 things. First, they reach their milestones on time with sufficient resources. Second, they protect them from the impact of economic losses secondary to unexpected events. The third and most important is that they enjoy meaningful and balanced lives.
LinkedIn/Twitter: Arlyn Tan