We have underdeveloped equity market
After canvassing for other equity fund managers, I have discovered that it is not good at all to invest directly or indirectly in the stock market.
UITF's may not be worth it
1. Equity funds from the banks have management fees of 0.50 (BDO) to 1.50% (BPI) per annum. Plus they charge you another 0.50% if you cash out before the agreed upon holding period.
This is outrageous. This is the investor's money and the bank is hijacking it and even charging you for moving your funds.
If you go direct to a stock broker and manage your own portfolio, you'll just get charged the usual 0.50% fee. No holding period.
2. UITF's trading is very unfair for the everyday trader. The banks will inform you that trading time is between 9am to 12pm. This is no problem. It means you can buy or sell your UITF units during this time.
The problem is you will not know at what value you will buy or sell. This happens because when you buy/ sell at 10am, your base price will come out only by 12pm and not the price at 10am. At first you may think this is okay. You'll say to yourself that you'll just buy in the afternoon BUT remember, this is not allowed. It is practically gambling!
The stock broker meanwhile is just a call away! Tell him at what price you want to sell and if there's a buyer, your sale is done. This can be done during trading hours at your price.
Market is too small
1. Philippine Stock Market is too small. Unlike the US stock markets, here there is no ready market. The amount of money involved in the daily trading is so small that some index stocks don't even change prices. These are already index stocks!
This means that the traditional advise of "buy when the market crashes and sell when the market is in the upswing" will not work perfectly here. You may end up with worthless stocks for a couple of years. The upswing will not come unless foreign investors start buying local stocks- just like today.
Why speculate in the stock market if your returns will not immediately be realized?
Advise:
1. Stick to doing business to increase your income and cash.
2. Ride the bull market if you want but never be too greedy to sell when you've gained.
**********************************************
Success is 1% inspiration and 99% perspiration. Never tire.
UITF's may not be worth it
1. Equity funds from the banks have management fees of 0.50 (BDO) to 1.50% (BPI) per annum. Plus they charge you another 0.50% if you cash out before the agreed upon holding period.
This is outrageous. This is the investor's money and the bank is hijacking it and even charging you for moving your funds.
If you go direct to a stock broker and manage your own portfolio, you'll just get charged the usual 0.50% fee. No holding period.
2. UITF's trading is very unfair for the everyday trader. The banks will inform you that trading time is between 9am to 12pm. This is no problem. It means you can buy or sell your UITF units during this time.
The problem is you will not know at what value you will buy or sell. This happens because when you buy/ sell at 10am, your base price will come out only by 12pm and not the price at 10am. At first you may think this is okay. You'll say to yourself that you'll just buy in the afternoon BUT remember, this is not allowed. It is practically gambling!
The stock broker meanwhile is just a call away! Tell him at what price you want to sell and if there's a buyer, your sale is done. This can be done during trading hours at your price.
Market is too small
1. Philippine Stock Market is too small. Unlike the US stock markets, here there is no ready market. The amount of money involved in the daily trading is so small that some index stocks don't even change prices. These are already index stocks!
This means that the traditional advise of "buy when the market crashes and sell when the market is in the upswing" will not work perfectly here. You may end up with worthless stocks for a couple of years. The upswing will not come unless foreign investors start buying local stocks- just like today.
Why speculate in the stock market if your returns will not immediately be realized?
Advise:
1. Stick to doing business to increase your income and cash.
2. Ride the bull market if you want but never be too greedy to sell when you've gained.
**********************************************
Success is 1% inspiration and 99% perspiration. Never tire.
Labels: Business
posted by Arsiph at
3:17 PM
2 Comments:
I smell a disgruntled fella who haven't tried it yet.
By
Anonymous, At
Sat Feb 10, 07:58:00 AM
Dear Anonymous,
I have tried it already specifically the UITF. That is why I am commenting on its process and results.
Thank you for your opinion!
Arsiph
By
Arsiph, At
Mon Feb 19, 12:48:00 PM
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