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Investing in good and bad times


To a great degree, investments are generally affected by economic cycles. You always hear people encouraging you to make investments because the economy is good. You also hear businessmen complain a lot when the economy is bad. The economy goes through changes from time to time which we normally refer to as economic cycles.

Economic cycles are fluctuations in the economy between periods of expansion or growth and contraction or recession. Factors that determine cycles are usually Gross Domestic Product (GDP), interest rates, employment numbers, consumer spending and the like. Investopedia further explains: “An economy is deemed to be in the expansion stage of the economic cycle when gross domestic product (GDP) is rapidly increasing. During times of expansion, investors seek to purchase companies in technology, capital goods and basic energy. During times of contraction, investors will look to purchase companies such as utilities, financials and healthcare.”

People are more likely to invest their money during when the economy is in its growth cycle and they are likely to stay away from investing when the economy contracts. What should be the right investment approach during the economic cycles? Should you stop investing when the economy is down and invest when it’s growing?

Economist and finance advocate Dr. Alvin Ang’s position is as follows:

“My take on business cycles is that they are closely related to productivity growth. Sustained growth of productivity usually predicts expansion. The investment strategy during this phase should be aggressive commensurate to the growth of productivity. It’s a time for accumulation as household capacities are expanding as well. During slowdown of productivity growth, leading to Decline, investment strategy should mimic the rate of productivity slowdown. During recession productivity falls sharply. Investment becomes least priority but the strategy is to continue with an established base amount at least 10% of the rate invested at aggressive phase. This should go up commensurate to the rate of recovery.”

Seasoned stock market investors, especially the more aggressive ones like Marvin Germo may take a contrarian approach when it comes to investing in economic cycles. Stock prices usually would go down prior to any economic decline so they will start to stay away from the market even if the economy is still not yet at a decline. The stock market will usually be at it’s lowest during a recession which is a signal to investors to start accumulating good quality stocks at a bargain. I once heard a stock market expert say to ‘start selling stocks at the sound of bells and start buying at the sound of alarms’; in other words, buy when people are afraid to buy and sell when people have been buying like crazy. This approach is typical of many who have a trading strategy. Recessions to them are opportunities to make a killing in the market. Interestingly enough, many of SM’s major investments were also done during bad economic times (SM North EDSA, Mega Mall, etc.) since cost of land, labor, etc. are much cheaper. In 2013, the economy was doing really well, and yet there was a big correction in our local markets. In the short term, prices may not always be a true representation of real value. The chart below shows the performance of the PSEi in 2013:


PSEi 2013

Other investments such as fixed income are also economy sensitive but not as anticipatory like stocks. When the economy is in a decline, prices of bonds normally go down and with that, yields of bonds will go up as a result. Although not as volatile as stocks, capital losses can also be experienced if you have a short-term orientation.

If you are a long-term investor and you are investing according to long-term objectives such as retirement, education funding, etc., cycles should not have an adverse effect on you. In a longer period, say 10 years and while markets will go up and down, and even experience crashes such as the 2008 crash, it is expected that markets will recover and will still go up despite volatility. For long-term investors, the issue is not so much on volatility but really on time. I often remind people that stock market investing is not just about timing, it is also about time. The general rule in investing is this: the longer, the better. The chart below shows the PSEi in a 10-year period. You can see that the market, though very volatile is on an upward trajectory in the long term:

10 year PSEi

Fixed income investments (Bonds) will not have any capital loss and yields will be realized if it is held up to its maturity. Just like stocks, bonds will do well in a long period, with less volatility.

When investing, it is very important to determine your investment objectives and time frame first. It is generally a good idea to hold on to your investments up until the time you need it and if your horizon is rather long, say 10 years, you should not be too nervous every time you hear negative news about the economy. A properly diversified investment strategy should allow you to hit your objectives even with the different economic cycles if you in the long run. Opportunities are also there for the taking when economy goes down, as long you are patient enough to wait when the economy rebounds and you have the appetite to take risks.

But alas, always remember that money and investments are just tools and they are not the end goal. In God’s economy, there are no recessions.

“But lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal.” – Matthew 6:20, ESV

Learn more investment strategies at the Money Manifesto Conference. To register, CLICK HERE.

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Dave Ramsey on changing our views on money

daveramseyscissorsI have said it time and time again and without shame that Dave Ramsey is my role model and benchmark when it comes to my finance advocacy

What makes Dave Ramsey really good is his straight-to-the point and no-nonsense approach with personal finance. Here’s a great video on why we should start looking at money differently and go against what the world has been teaching us. It’s time to go against the normal!

Like Dave, I believe the bible holds the answers to our many financial questions… as well as all the other questions we have in life.



Before investing your money


A lot of people have always asked me about investing – where to put their money, how much to invest, do they buy stocks or mutual funds, etc. They are all great questions and those are important issues to address. However, before even thinking about putting your money somewhere, there are a few things that you need to take care of first:

1) Money Management – proper management of your finances is the foundation of your quest for wealth. If you are like most of us, your money doesn’t come in just one shot – they come in and go regularly and your investments will do well when you can add to those investments pretty regularly. You can only keep on adding to your investments if you know how to save properly… and you can only save properly if you know how to spend properly. Create and stick to your budget, as that will be your most important weapon in building your wealth.

2) Emergency fund – I cannot emphasize enough the importance of building a buffer fund before investing. Investments are volatile, well at least the good ones are and there is always a danger that when you liquidate your investment, it may have not earned yet or worse, its lower than its original amount. The buffer fund will allow you to keep your investment funds untouched since you have another fund to dip your hands into when emergency strikes. 3 to 6 months worth of expenses is a good emergency buffer fund.

3) Investment objectives & time frame – what are you investing for? Many people invest without really know why they are investing in the first place. Knowing your objectives and time frames will allow you to match the right investment instruments that will be best for you.

4) Risk tolerance – it is good to determine your risk appetite before jumping into any investment. A lot of people invest money into risky instruments and yet they are not prepared to handle investment risks which causes a lot of frustration that leads to a lot of stress. Never invest without knowing the risks.

5) Time – think long-term. There are no short-cuts to wealth and you need to be patient in building your wealth over time. Do not take short cuts and do not be in a hurry as those actions can cause you to make a lot of financial mistakes.

Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty. – Proverbs 21:5, NLT


Get finance & investing tips from the Money Manifesto Conference this Nov. 29, 2014 at the SMX Aura! For inquiries, visit HERE

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Why time is your greatest asset

invest-time (1)There are 3 areas that you need to consider before investing: investment objective, risk tolerance and time frame. It is prudent to know those things first before even considering what investment you should be looking at.

Let’s discuss about the 3rd element for consideration — Time.

I have often said that time is perhaps your greatest asset, well aside from yourself. Why is that so? Time is a great way to reduce risk, especially the volatile investments (which are of course, the better investments). Values of investments are often affected by markets and the economy in general. There are good years and great years and unfortunately, there are bad and horrific years when it comes to investments. But, if you have a long term of investments, the chances of you making a big gain in your investment is much better. While good investments are volatile (like stocks), they are generally going to go up in the long term, say over 10 years. That’s the assumption that you are properly selecting stocks based on value and not on hearsay. Investments really grow over time and the longer the time you have, the better the chance for your investments to grow.

In 2008, the whole world was in panic with the financial crisis brought about the sub-prime crisis in the U.S. To learn more about the sub-prime crisis, check out Investopedia. Although the Philippines was not exposed to the whole mess, the financial tsunami that happened in the U.S. had a huge negative effect world-wide. I remember that a lot of people were panicking at that time and many first world investors saw a lot of their money gone in a a flash. Back home, the stock & bond markets were also suffering as collateral damage from the U.S. problem. If I remember it right, Philippine stock market index lost by more than 50%. People who invested in mutual funds or UITFs saw their funds go down by as much as 3o to 50% and I was one of those. While I felt really disturbed by the whole meltdown and the loss of a lot of money, I remained calm because my purpose for investing was long-term anyway. While a lot of people I knew pulled out their investments, I did not do so because my time frame was a rather long one anyway. That decision paid well after since the markets have not only recovered, they have grown substantially over time.

In 2004, I decided to place some money on an equity mutual fund. Not much growth really happened in the following years and worse, the fund saw a big dip in 2008. I kept the money there since I do not need it anyway. A few weeks ago, I got a statement for that particular fund and despite having bad years and really bad years, the good and great years have allowed the investment to grow by 400% from its original amount or a compounded annual growth rate of 14.8% p.a.

In 2008, I decided to put my daughter’s money in a UITF balanced fund — a few months before the great financial turmoil. Like most funds, they lost as much as 30-40% of its original value in a matter of days! Since those funds were for the future of my then high school aged daughters, I just kept it in the fund and never bothered with the losses since my investment horizon was long termed anyway. Today, the value of the investment is about 220% of its original amount, or a growth rate 14.05% p.a. over a span of 6 years.

Time is indeed a great asset and it is a great way to reduce your risk. Given enough time, you can either be an aggressive investor or a conservative investor and both strategies will work. If you are a risk taker and you loose money from investments, you still have time to recover your losses and gain from the bullish years, like my 2 stories. If you are not a risk taker, you can still do the safe but sure way and your money will still amount to something substantial with enough time. However, you can’t be aggressive when you don’t have enough time anymore because it is dangerous to put invest money only to find out that you actually lost part of your money when you need it most. When you are a conservative investor, your money will not amount to something substantial due to the low yields you are getting and the short time for it to grow.

Always remember to be prudent with your investments, but use time as a great leverage for you to achieve your goals.

Get more investment ideas from the Money Manifesto Conference on Nov. 29, 2014. Details HERE

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Money Manifesto Conference 2014

Join my last public event for 2014, the Money Manifesto Conference on November 29, 2014 at Room 1 at the SMX Aura in Taguig City.

What is this conference all about? 

This event will highlight valuable personal finance learnings that will instruct, inspire and empower the audience to achieve their goals in life.

Joining me for this event are my friends Jayson Lo and Carl Dy.

A much sought after motivational speaker, Jayson Lo is the best-selling authors of “YOUnique” and “Debtermined”. He will talk about the money behaviors people have and how to have the proper money mindset to get out of debt and achieve your goals in life.

Carl Dy is one of the country’s foremost expert in real estate investing. He recently authored a booklet titled “6 Steps to Renting out your Condo.” He will show us the right way to invest using real estate and that this is not an investment limited to the ultra rich.

Incidentally, my newest book “Money Manifesto” will also be launched during the conference. This book has been highly anticipated and has been recommended by BSP Deputy Gov. Diwa Guinigundo, Rivermaya front man Mark Escueta, economist Dr. Alivn Ang, international celebrity Christian Bautista, RFP’s Henry Ong, Stock Market expert Marvin Germo, BPI’s Marketing head Jojo Ocampo, international investing expert Jess Uy, and many more.

The conference is for only P750.00, a bargain for the quality of seminars we offer. What’s more, if you register and pay before November 12, 2014, you only need to invest P500.00

For inquiries and registration, please get in touch with Carl Magsino at 0917-4433832, 988-8469 or email

You can also register on-line by visiting —

This conference is presented by BPI and Sun Life. Supported by the RFP, Angat Pilipinas Coalition and Alveo Land.

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Retire 2014 Reload

Studies shows that only 1 to 2 out of 10 Filipinos prepare for retirement. Studies also reveals that the few who prepare for retirement, most of them will only exhaust their retirement funds halfway through retirement.

Filipinos are experiencing longer life expectancy but unfortunately, huge costs are needed to live a life of comfort during those years.

Consider this: If you can generate 75% of your pre-retirement income during your retirement years, you will live a life of comfort; if you can only generate 30-50%, you will live a life of struggle. For a 20 year retirement, you need at least 20 years of preparation — if you plan to retire at 60, then you should start preparing at 40.

Attend RETIRE: No Nonsense Retirement Planning Workshop and learn how to properly prepare for your retirement. At the end of the full day workshop, you will be able to prepare a comprehensive retirement plan that is suited for you and a plan that really works. Find out how you can truly live a life of comfort & learn about the proper investments that is best suited for your needs objectively from two of the most recognizable finance advocates of the country.

For inquiries and registration, email

retirement poster 2014



My newest book, Money Manifesto

Deputy BSP Governor Diwa Guinigundo, international celebrity Christian Bautista, rock star Mark Escueta, best-selling Author Dennis Sy, stock market advocate Marvin Germo, economist Dr. Alvin Ang and others have all agreed that Money Manifesto is a book worth reading.

What is this book all about? It’s a personal finance book that discusses a wide array of topics: Money management, Investing, Economics plus more… but, this book is more than just about the finance topics — it talks about my experiences and the experiences of others too. When my editor was working on my book, she said that this book seems to be more personal and has more heart.

Money Manifesto is a 300-page book that took me many years to write and like my other books, this one is intended to go beyond sharing information, this book is meant to encourage and to inspire the reader.

This book will be available in November 2014.

Money Manifesto book promo



We do what we have to do


yes-we-canIt’s been a long time since I last wrote a blog – my talks, seminars and publishing my 3rd book (Money Manifesto) has made it challenging for me to update my website. But, I love blogging and there have been people asking me to blog more often and when there is an opportune to do so, I will take – like now.

As I write this blog, I am sipping peppermint tea (cutting down on my coffee addiction), in a mall in Dubai, UAE. In a few hours, I will be speaking to our dear OFWs in Dubai and teach them about the value of estate planning. Tonight’s talk is my 7th of 11 talks in a 14 day sojourn in 3 cities in the middle east: Doha, Dubai and Abu Dhabi. Despite nursing a throat problem since last week, I am so energize to continue with my mission to enable Pinoys everywhere to achieve their goals and dreams. I must admit, however, that I find it difficult to be away from my wife and kids this long… I am just consoled that in a few days, I will be reunited with them and that the work I do has an impact to others, one way or another.

We do what we have to do. That’s my take whenever I am put in a place out of my comfort zone and experience some inconveniences. Counting my blessings helps me get through the things I do but at the end of the day, we just need to do what we have to do… just like the many OFWs I have been interacted with since last week. The capacity of the Pinoy to endure difficulties is truly incredible and they do so without becoming cynical or even bitter. When I talk to our Pinoys everywhere, whether they are in Dubai, Doha, Singapore, Tokyo, Seoul or Paris and start talking about the difficulties they endure on a daily basis, they will all answer me that they just do what they have to do.

The same attitude of just doing it is something we teach everyone with when it comes to personal finance. Work hard, budget well, get out of debt and investing for the future is not really an elusive goal if we just do what we have to do. We work well despite our circumstances and we do not let the hardships of life prevent of us from living our life. We can use that same resilience in the way we handle our lives with the way we handle our money.  We need to look at proper spending and saving as something we just have to do despite our difficult situation and we can do so if we are reminded that when we do what we have to do, we don’t have to do what we don’t like to do in the future like worrying.

I am truly blessed and inspired by the many Pinoys I meet all over the world and I will continue to teach as many of them as I can, despite the odds; and I am sure they will become more and more enabled despite their situation. We just need to do what we have to do.




Qatar events in October 2014

I will be back to Doha, Qatar again this October for a series of finance events.  I will be joined by my friend and colleague MARVIN GERMO for this series.

Associate Financial Planner (AFP) Program – for OFW’s who are serious in financial planning and would like to be certified by the country’s largest and most recognized financial planning certification program, the Registered Financial Planner Institute (RFPP).

AFP Doha


There will be a series of finance talks as well — from stock market training, estate planning, retirement planning and financial stewardship.


Please direct all your inquiries to or to


The story of a finance advocate in Qatar

In 2013, a group of dedicated finance advocates took an extensive financial planning program and a comprehensive examination that allowed them to be certified as Associate Financial Planners. Here’s a post by one of the distinctive graduates of the program. She is not only a dedicated advisor, she is also a dedicated advocate who has helped a lot of OFWs in Qatar become financial enabled.  I am proud to share the story of my good friend Ellen Labastida!

Ellen photo


AFP Graduate Personal Story
“It’s not what you earn, it’s what you keep”

I have come to grasp the reality of old adage “It’s not what you earn, it’s what you keep” six years ago, during the 2008 global financial crisis that hit the big financial institutions, banks, governments, stock markets around the world and of course our family.

At the start of 2006, a 300 sqm. lot compound with two modest houses in it was offered to us for half a million, so we grab the opportunity. A year later, we bought another lot offered to us. Back then, I and my husband were in Dubai, working hard for the money and spending hard too. We acquired those properties through a bank loan in Dubai that my husband has taken for a repayment scheme of five years. He had several credit cards too because it is easy to receive one (I don’t have any as he has too many for our use). For credit cards in Dubai, the bank agents will chase you and apply for you without difficulty, all you need to do is say yes to the agent, comply few documents and voilà: you suddenly need a bigger card organizer for your wallet.

My husband has a good paying job as an engineer and he moved from one company to the other as opportunities to get higher salary were ample. Then financial crisis of 2008 came, the time when our spending hit high. The real estate and construction industry took the beating; there were massive suspension of projects and layoffs. It was October, a month after we took the car loan, my husband and 90% of his entire colleague engineers in the same department all got termination letters in one day. They were ordered immediately to hand over IDs, laptops, security pass, company phones and sign the redundancy letters and asked to leave. The end of service benefit was fair enough to sustain the family expenses for three months, this without considering the loans and credit cards of course!

The certainty of loss began to sink and I started to feel dreaded fear. Unemployment in the construction industry was so high that my husband’s competitors for some of the job interviews were used to be his seniors in the work place. I used to contribute 40% from our combined income and was confronted with the problem where would we get the remaining 60% in order to pay our debt obligations, remittance back home and our expenses. The agony has taken its toll on our relationship, so stressful that it took me countless sleepless nights crying. Yet I have to be strong for my husband as he was counting on me to understand the full scope of our situation. If it was difficult for me, it was more difficult for him as a man and as the main bread winner. No job opportunity, emergency fund exhausted, two huge loans, several credit cards and a family to feed.

He found a job that would separate us physically. He was assigned in Doha, Qatar as mainly no projects running in Dubai. We have to deal with the physical separation and for the next two years, my budget list every month was consisting mainly of paying off the debts. Every payroll means going to banks to deposit our hard earned money ironically into our savings account but only to be taken away immediately. We have agreed to drastically cut our individual food trips to the restaurants, box office cinemas, gadgets, jewelries and no more sale purchases except for food and basic groceries. These were two agonizing years of pure payments.

Being alone, I started reading financial e-books. I was inspired by financial author Dave Ramsey’s advice on getting out of debt – snowballing. We took the strategy and knocked off smaller balances first and every time I removed a bank name from my excel list, I always feel a bit closer to freedom!

After two years of paying debts off, my husband could now afford to travel few times in a year to visit me in Dubai, the same period we attended financial literacy seminar through our friend. The trainings indeed made a profound impact on our lives and finances. We learned the 70-10-20 prosperity formula in managing our income and how to establish the solid financial foundation. We learned the X curve concept of responsibilities as against savings, the rule of 72(compounding interest) and investing. We have faithfully structured our finances and built solid emergency fund at last. For the next four years, we were able to increase and diversify our savings and investments. We have our plans written on paper and keep ourselves in the associate of really positive, inspiring and investment savvy people. Finally, I was able to join him in Doha with our kids!

We embrace the advocacy and share our experience with OFWs through the Overseas Filipino Investors and Entrepreneurs Movement- an OFW association accredited by the Philippine Embassy in Doha, Qatar.

To solidify our cause, we studied and acquired financial planning accreditation through RFP’s Associate Financial Planner Program brought for the first time outside the Philippines. We were amongst the historical international first batch. The AFP course made me understand more that we cannot change our financial challenges in the past but because of it, we were able to determine that behavioral change is the key solution to many of OFWs financial problems.

We learned that there are also three basic things we should consider essential for financial planning – 1. Money 2. Self-discipline 3. Right information. It would be pointless if you will not balance these three. You may have the money, but lacking self-discipline will lead you nowhere but struggling. You may have both the money and self-discipline but no right information may lead you to either scammers or become a flat liner fiscally.

We learned the hard lessons and we believe God always have his miracle hand in our life as He taught us to become in control with our finances. We were humbled and God was only our anchor during those difficult times. Whenever we need something, it is beyond my understanding how we were able to sustain it, only I know He answered our prayers. In those two years, He taught us the value of patience; discipline and become responsible stewards of His blessings. To this day, we speak of our past and share it so others may learn.

While a lot of people six years ago were pointing their blaming finger to the Lehman Brothers for the situation, we held ourselves accountable. You may wish Lehman Brothers have sisters perhaps to suggest a different history but that part of world history has put me and my husband into the right perspective. Our ultimate message for OFWs in debt – no matter how unsure you will be in keeping your head above water, there’s always a way out and running away from debt is not one of them. Start with a behavioral strategy, stick with it and develop the habit.

Indeed it is not about how much you earn, it is how much you keep and where you keep it.

Be part of the next AFP-certified Filipinos in the Middle East:

Two-day certification course

Doha, Qatar: Oct. 3-4, 2014. for inquiries:
Dubai, UAE: Oct. 10-11, 2014. for inquiries:


Ellen B. Labastida
Certified Associate Financial Planner – RFP Institute
Certified Financial Educator – Heartland institute of Financial Education, Colorado, USA
OFIE-M advocate, trainer
Pinoywise International trainer