For particulars, check out the poster below. Great value, great learning! See you in Cebu.

There will be selected RFPs at a designated area during the event who are offering their services for free for participants of the event. These RFPs are highly competent and trained to give objective advise to your financial concerns. They have all graduated from the Registered Financial Planner Program, a rigorous training program on financial planning.

Usually, RFPs charge a fee for counselling but to those attending Friday’s event, they are FREE with no strings attached.

See you Friday!

Joining is very easy. Just post in the comment section one or two things you have learned from me through my seminars, blogs, columns, media appearances, etc. and how it has influenced or will influence you.

One more thing, to those who want to join, may I request if you can blog, post in Facebook or tweet about my event using this link http://www.randelltiongson.com/steps-to-financial-peace-2012/ ?

Deadline will be on May 15, 2012 and we will notify you by email or sms. Make sure you leave your email address and your mobile number so we can contact you if you win.

This event is made possible through the help of BDO, Airphil Express, Cartridge World, RFP, Coffee Bean and many more!

God bless!

Answer:

UITFs or Unit Investment Trust Funds are pooled funds offered by the trust department of the major banks of the country.

But what is a UITF? As per the Trust Officers Association of the Philippines (TOAP), they defined it at their website (www.uitf.com.ph) as “an open-ended pooled trust fund denominated in pesos or any acceptable currency, which is operated and administered by a trust entity and made available by participation. Each UITF product is governed by a Declaration of Trust (or Plan Rules) which contains the investment objectives of the UITF as well as the mechanics for investing, operating and administering the fund. Most UITFs are considered medium to long term investments.  Clients considering to invest in UITFs must have the financial resources to stay invested in them for a reasonable period of time in order to maximize earnings potentials.  If the funds to be invested will be needed by the client in the immediate future, the UITFs may not be a suitable investment vehicle for such client.”

A few months ago, I wrote about pooled funds in this column. I mentioned that pooled funds are Pooled funds are investments where people put their money, with an investment manager handling the investments. To explain further, let me use this analogy: Assuming you want to invest but do not know the first thing in investing in stocks or bonds. You can join a “pool” of investors who allow an investment manager to invest for them, subject to the objectives of the fund. Since there are many investors in the fund, the amount generated by the fund becomes sizeable and an investment manager will invest it for you. The investors actually own the funds and the investment manager (usually an institution) simply manages it. Ownership of the fund is through shares, much like owning shares in a corporation. Of course, the investment manager earns from this arrangement through the charging of management fees.

To answer your question if it is a good idea to invest on a UITF, my answer will be “it depends!” Like any investment instrument, you must first ascertain your investment objective, time frame and risk tolerance. UITFs (and Mutual Funds) are not short term investment vehicles. If the purpose of your investment is short term in nature, say less than 3 years then is not a good investment for you because UITFs are marked to market investments. The value of a UITF will be dependent on the performance of the market it is invested in. If the market of the fund you are invested in, say Stock Funds (Equities) are on a rise, expect the value of your UITF to go up, and vice-versa. Pooled funds, of which UITF is one of them, are not bank products and do not carry guarantees. They are not covered by the PDIC as well. However, having a non-guaranteed investment is not necessarily a bad thing because it also means that the yields you can get from investing in them is potentially higher.

If your investment is long term in nature and your risk tolerance is on the moderate to high, UITFs can be a good vehicle for you. Let’s assume that you are investing for retirement, a UITF is a good vehicle to help you build up your retirement funds because the long term nature of your need will allow you to weather the fluctuations in your funds. Even if there is fluctuations or gyrations, investments in UITF (or other pooled funds) are generally on the growth side. Performance is largely dependent on the fund you have chosen to invest in and the rules of risk and return relationship will dictate its performance. Riskier funds like Stock or Equity Funds will generate higher returns than lower risk funds like Bond Funds on good years and of course, expected to have negative growth on bad years. Good years is when the investments environment are doing well like growth in the equities market, bond market and generally when the economy is doing well.

UITFs allows you to invest according to your risk tolerance. Low risks for Bond or Fixed Income Funds, high risk for Stock or Equity Funds and moderate for Balanced Funds which can be a combination of both bonds and stocks. I also like the idea that you don’t need a lot of money to invest on UITFs, most banks will allow you to invest for as low as P10,000.00. BDO even has a program where you can invest as low as P1,000 per month under their Easy Investment Program which is a great idea for many of us. I am sure other banks will come up with a similar program soon.

A big advantage of UITFs is professional investment management. Those entrusted to invest UITFs are well experience full time investment managers who are trained to invest properly, objective and devoid of emotional investing which is a common mistake for newbie investors. Of course, the downside of UITFs is that there is management cost which is only fair. Another problem I see with UITFs is that the branches of the banks are not properly trained in handling inquiries on the UITFs and there have been reports that some branch personnel even discourage their customers from investing in UITFs because of its non-guaranteed nature.

As to which bank is the best performing, you may check out their posted performance in publications and the internet. However, do not look on performance alone. A fund with an aggressive fund manager will do well in good investment markets but will perform poorly on market downs. What you should consider are their long-term performances, like their last 3 or 5 years performance. Lastly, look at their charges too as not all banks offer the same charges.

To learn more about investing, consider attending my Steps to Financial Peace 2012 events on May 18 (V Mall, Green Hills), May 26 (Parklane Hotel, Cebu) and June 2 (Davao). Get in touch with Jen Magalong at 0939-1177856 or jcignacio.magalong@gmail.com

“But divide your investments among many places, for you do not know what risks might lie ahead.” – Ecclesiastes 11:2, NLT

 * also appeared in my Inquirer column.

This three-day expo, presented for the fourth time by premier events specialist Trade Advertising Exhibitions & Conventions International Inc. (TRADECON), gets a  major boost from its partnership with ESQUIRE Financing Inc. (EFI), the country’s leader in Growth Stage Financing. EFI is a company dedicated to furthering the venture of growing small and medium enterprises (SMEs) by offering specialized business solutions to SMEs. It decided to co-present the expo because it believes in the significance of bringing together the SME owners and various publics (investors, clients, consumers, distributors, and suppliers, among others) to interact and tap into one another’s potential contributions to the emerging small and medium enterprise market.

SMEs play a major role in the country’s economic development as they contribute to the creation of business opportunities, generation of employment, and linkages to existing industries both here and abroad.

As of 2009, small and medium enterprises comprise 99.6 percent of the almost 80,000 business enterprises operating in the Philippines, according to data by the Department of Trade and Industry.

Sixty-three percent of the labor force earns their living through SMEs. While most of the jobs generated by the sector can be found in the National Capital Region, SMEs also propel employment in rural areas especially in economic zones spread around the country.

Aside from product showcase and a venue to link market players, the 4th Philippine Small Medium Enterprises and Franchise Expo (PHILSME EXPO 2012) will also provide opportunities for idea exchange and product demos for budding businessmen, as well as a great deal of free services, workshops and seminars, classes and new product launches.

Various SME players from direct selling, agriculture, hotel and restaurant management, banking, marketing, insurance and service providers will be setting up their kiosks for the three-day exhibit.

At the press conference held recently, Chinkee Tan who is a wealth coach, motivational speaker and host of KBP Golden Dove awardee 92.3 FM RadyoSingko “CHINK POSITIVE” show expressed his support for the upcoming expo and is encouraging each one to awaken their entrepreneurial spirit and engage in business that they’re good at and interested in. ESQUIRE Financing Inc. President and CEO Rajan Uttamchandani also expressed optimism at the country’s business environment this year. Life & Personal Finance advocate, one of Moneysense’s 12 Most Influential Persons in Personal Finance and Phil. Daily Inquirer columnist Randell Tiongson will also be featured at this event.

If you are an aspiring businessman, an established business owner, a budding entrepreneur or an interested consumer, come and be part of the PHIL SME 2012. For more information, please call 395-5009, 395-5137, 343-3368, or email  events.tradecon@gmail.com for details.

- Christian Bautista, International celebrity & multi-award singer

“Randell is such an authority in personal finance. His approach is practical as well as comprehensive. He is a notch above many others in this arena because he is a real practitioner. His experience weaves a vital fabric of openness and effectivity in his seminars and programs. He goes beyond awareness – his approach focuses well on one of the most important areas – the follow through. That can spell success and failure in life and money management.”

- Rex Mendoza, President & CEO, Philamlife

“Personal Finance Coaching with Randell busted a great deal of money myths for me. For example, I used to think that finances is complicated and has been a source of fear. But talking to Randell made me realize there are simple and easy steps in achieving financial-peace.”

- Rica Peralejo – Bonifacio, TV & Movie Celebrity

“When you listen to Randell Tiongson, you don’t only learn about personal finance, you also get entertained. I definitely recommend Randell Tiongson to Filipinos who want to learn ways to manage money and achieve financial freedom. He has inspired a lot and continues to reach more through his talks and articles that are both educational and fun.”

- Marvin Fausto, Senior Vice President & Chief Investment Officer, BDO Unibank

Catch Randell Tiongson with his guests Chinkee Tan and Jayson Lo on May 18, 2012 for Steps to Financial Peace! 10am to 6 pm at the 4th Level of V Mall, Green Hills. For inquiries, please call or sms Jen Magalong at 0939-1177856 or 0927-9631376 or email jcignacio.magalong@gmail.com

Don’t miss this life-changing learning event!

Watch this video.

This year, my guest will be my dear friend and Wealth Coach, CHINKEE TAN together with Mr. Jayson Lo.

For inquiries, please email jcignacio.magalong@gmail.com or call (0927) 873-1511 or (0939) 117-7856

We all know how the country’s economy is kept afloat by the OFW remittances which continue to grow despite the odds. In fact, many experts feel that remittances should have been in a decline for the last few years. Yet, year after year, we are amazed that the amount of money being sent home still continues to surge, notwithstanding the situation of many of the countries that employ our brothers and sisters. Credit to this phenomenon can only be given to the OFWs themselves, their unbelievable resilience and unrelenting spirit. One needs to look beyond the numbers to truly fathom this phenomenon — we need to really to spend time with our OFWs and their families to better understand them and I am blessed to have done so, in quite a number of occasions.

In my time with the OFWs, I see something that is quite consistent with all of them. Our brothers and sisters abroad have a keen ability to endure adversity and make sacrifices for their loved ones. The longing for their families, long work hours, unfair labor practices, hostile & dangerous environments and discrimination are just a few of what an OFW endures on a daily basis. All of these, an OFW endures so that he can uplift the standard of living of his loved ones and he can finally achieve some financial freedom. In other words, sacrifice heavily now for a secured future.

We all know that a disturbing number of our OFWs do not end up having a secured future. While they may experience improved standards of living, it is normally unsustainable. The moment an OFW stops being employed, contracts get cut or not renewed, everything seems crashing down for many of them. Further, stories of OFWs who clocked in decades of servitude overseas yet experiencing near poverty levels during retirement continue to hound us. It is sad that all the years of labor and sacrifice will be in vain, so it seems.

What can the OFW do then? Here’s a formula that I recommend to OFWs and to everyone as well. Spend less than what you earn, invest the difference and do it over a long, long period of time. It starts with money management and prosperity really starts with savings. As the OFW builds up his savings, he can start to put his money into work and build up his nest egg. Where should the OFW should put his money? That depends on many factors: investment objective, time frame, acumen, and risk tolerance to name a few.

I notice the favorite investments of OFWs are real estate and small businesses. They are great investments that can really build capital and provide a steady stream of income. For a small (or big) business, it is crucial that the OFW or his spouse should have both the mindset and the skills of an entrepreneur. Business is never easy and it requires a lot of dedication, yet it is one that can really generate the most growth. The nature of any business is also a speculative one so one should realize the risks inherent in a business venture.  Real estate is a less volatile investment as compared to a business and can likewise generate good capital growth and income. However, real estate locks liquidity and can be difficult to acquire since it requires a lot of money to own a property. Further, many investors end up locking all their money into a property only to realize later that the growth and income derived may not be as much as he wanted it to be.

The OFW can also look at financial instruments and there’s a lot to chose from. Debt instruments like time deposits, special deposit accounts (SDA), treasury notes and corporate bonds can and should be part of the investment – they are relatively low risk and great for liquidity purposes. However, debt instruments have unappealing returns and may not be a good hedge against inflation.  The stock market is also something that they can consider, they are great for capital and a fantastic way to hedge against inflation but the investors must always be mindful of the many risks involve. Capital loss should be expected as much as capital gains while investing in the equities market. Pooled funds are also great vehicles for the OFWs. They come in the form of Mutual Funds, Unit Investment Trust Fund (UITF) or Variable Life Insurance (Investment linked). Such pooled funds have low entry amounts and they can benefit from professional money management. They are relatively liquid and depending on the fund, they can generate good capital growth. Downside in investing in pooled funds is that it carries an investment management cost and it carries no guarantees.

So, where should the OFW put his money? I say that he should try several and learn to diversify. It is foolish to think that one investment can answer all our needs and to be frank, having only one kind of an investment can be too risky for my taste. Here’s another suggestion I urge the OFWs (and everyone else) to make – invest in financial education. Financial education will answer the many financial questions we ask.

To our dear OFWs, make your sacrifices count and chose to live a life of freedom.

As a gift to the readers of this blog and courtesy of Becca Music Inc., you can get the chance to win 2 tickets for this epic concert for free!

Joining is easy, simply post your favorite Israel & New Breed or Planetshakers song and how it has inspired you with your walk with the Lord in the comments below.

5 winners will be chosen and they will be given 2 tickets each. Contest deadline is April 15. The winners will be notified by email or sms so please post your contacts in your comments.

See you at the Smart Araneta for this once in a lifetime epic concert!