Image via WikipediaFinancial IQ Philippines Quick Hit(s):
Sharing an article I wrote that was published in Business Mirror on December 20, 2011.
To see the newsprint of the publication, you can launch this link -> http://www.facebook.com/media/set/?set=a.10150533688390673.414127.541370672&type=1&l=57a651fc10.
IN the recently concluded third fight between Manny Pacquiao and Juan Marquez, Manny Pacquiao was heavily favored to win over Marquez (although the fight turned out to be much closer than most sports experts and casual fans expected).
During the 2011 NBA Finals, Miami Heat was favored over Dallas Mavericks. Likewise, in the 2011 NCAA Final Four, Kentucky was favored to win it all over the three other collegiate teams. Even though Floyd “Money” Mayweather was out for more than a year, he was still heavily favored to win over Victor Ortiz.
Just as sports experts have their favorite individuals or teams, the financial market also has “flavor of the month” stocks and the likes.
As 2011 is coming to an end, have you invested your excess funds on various types of financial instruments? Did you invest in a certain stock because your friendly broker or relatives gave you some hot tips? Or are you among those that prefer to keep their excess money on guaranteed financial instruments such as savings, checking, or time deposits because they feel safer? What was the return of your “safe” investments compared to our inflation rate, which is at around four percent?
Let me focus on the local mutual funds to consider investing for 2012. If you are among those already familiar on how mutual funds work, congratulations! If not, it is not yet too late to understand this financial jargon.
A mutual fund is a type of financial instrument that pools the money of various investors to purchase equities, bonds, and other financial instruments. A mutual fund is professionally managed by a fund manager. Most of the time, mutual funds are categorized as equity fund, bond fund, and balanced fund.
Why are mutual funds categorized? Each classification serves different purpose. As an example, equity funds cater to aggressive risk-tolerant investors.
· An equity fund is composed mostly of stocks.
· A bond fund is composed mostly of government and corporate bonds.
· As for a balanced fund, as the term implies, it is composed of a combination of stocks and bonds instruments. To be precise, approximately about 50- percent stocks and 50-percent bonds.
