Investment Funds

[PaulB]

Dear Members

I am in a fortunate position to have a lump sum to invest in June 2019. I would like to invest it in a Sunlife, Prudential like fund that can pay a monthly income when/if required in 4 years time. I was just wondering if anyone on this forum had experience of investing in such policies in the Philippines and what returns can be expected.

I have looked at buying a couple of houses to use as student accommodation but to be honest the returns are low (9 students per houses x 2 houses x Php 1,200/month each = Php 21,600 per month - bills Php 8,000 = Php 13,600 per month) so wanted to see if a fund could match that and if so how much I would need to invest.

I would appreciate any advice.

 

Paul

[OnMyWay]

27 minutes ago, PaulB said:

Dear Members

I am in a fortunate position to have a lump sum to invest in June 2019. I would like to invest it in a Sunlife, Prudential like fund that can pay a monthly income when/if required in 4 years time. I was just wondering if anyone on this forum had experience of investing in such policies in the Philippines and what returns can be expected.

I have looked at buying a couple of houses to use as student accommodation but to be honest the returns are low (9 students per houses x 2 houses x Php 1,200/month each = Php 21,600 per month - bills Php 8,000 = Php 13,600 per month) so wanted to see if a fund could match that and if so how much I would need to invest.

I would appreciate any advice.

 

Paul

You technically will have to file a Philippine tax return for profit on the rentals, right?

My wife would like to have a rental property but I don't like the idea.  I will keep most of my investments outside PH.

My BIL has an apartment house in Baguio that caters to students.  It can be a lot of work at times.

[Gary D]

My wife put some money in to one of these type of funds and so far the profit has been a 100% lose.

[stevewool]

There is not much out there, I will have a lump some this coming month and I will just put that in a 1 year fixed rate.

[JJReyes]

1 hour ago, OnMyWay said:

  I will keep most of my investments outside PH.

Excellent advice.  The Philippines has an authoritarian regime which means without the normal checks and balances.  They can arbitrarily change the rules including sudden increases in taxes.  Spend money in the Philippines, but earn it (interest, dividends, annuities) elsewhere.  Personally, I anticipate a very large drop in the global economy.  I am keeping a significant portion of our investment portfolio in cash and cash equivalents. 

[earthdome]

On 4/3/2019 at 11:16 AM, JJReyes said:

Excellent advice.  The Philippines has an authoritarian regime which means without the normal checks and balances.  They can arbitrarily change the rules including sudden increases in taxes.  Spend money in the Philippines, but earn it (interest, dividends, annuities) elsewhere.  Personally, I anticipate a very large drop in the global economy.  I am keeping a significant portion of our investment portfolio in cash and cash equivalents. 

The stock markets could have a major break either way. Continue on for the next 5-10 years with all time highs or have a huge 50% plus correction. Good arguments can be made on both sides. And which way it goes depends a great deal on politicians and other things which are difficult to predict. That is why my investment adviser has me mostly in index funds but with enough PUT options to protect me if the market takes a major downturn. Kind of like insurance. If you stay in a cash position then you are losing money from monetary inflation. i don't trust bond's anymore since the interest rates are so low and if for some reason interest rates spike up you lose a great deal off the principal of the bond.

[JJReyes]

1 hour ago, earthdome said:

The stock markets could have a major break either way. Continue on for the next 5-10 years with all time highs or have a huge 50% plus correction. Good arguments can be made on both sides. And which way it goes depends a great deal on politicians and other things which are difficult to predict. That is why my investment adviser has me mostly in index funds but with enough PUT options to protect me if the market takes a major downturn. Kind of like insurance. If you stay in a cash position then you are losing money from monetary inflation. i don't trust bond's anymore since the interest rates are so low and if for some reason interest rates spike up you lose a great deal off the principal of the bond.

50% of investment advisors claim the market will go up, 50% claim the market will go down.  Half of them can brag they were correct in their prediction.  You are right that it is the politicians who are making me nervous.  Everyone is worried what will happen to Great Britain after Brexit.  I am more concerned about what happens to EU's economy after the UK departure.  Germany's economy is the only thing sustaining the Union and it is in rapid decline.  US politics is becoming more extreme moving everyone to the radical left or right.  Many countries, including the Philippines, have debts that cannot be repaid. 

Most of our funds are in the financial markets ready to ride out any storm.  For example, my wife and I like Berkshire Hathaway because it is one company that actually does better in a depressed economy.  We also don't pay taxes on dividends because there isn't any.  What I have done is keep enough cash, plus anticipated social security benefits, to last us 3 or 4 years based on our annual budget.  The losses from monetary inflation is relatively small compared to down markets of 10%, 20% or even 50%

[Dave Hounddriver]

On 4/3/2019 at 10:17 PM, PaulB said:

I would like to invest it in a Sunlife, Prudential like fund

I looked into that 12 years ago.  The reason was that the Sunlife fund invested in Philippine Legacy Investments which was a high rate of return.  I thought if Sunlife was in it then it must be good.  I decided to skip the middle man and go straight to Legacy Investments.  It was a pyramid scam and I lost a bundle.  But the point is, investing in the same high risk scam via a Sunlife fund would have yielded the same result.  Now I keep my money in Canadian Bank run mutual funds.  Low return.  High safety.

[nor cal mike]

Some good information from JJ. and others. I found some very good financial news by googling “ Philippine national debt”. There are a number of excellent articles outlining current conditions and future economic outlooks for the PI. I might add it’s quite an eye opener.

Edited April 6, 2019 by nor cal mike
Typo

[Old55]

6 minutes ago, nor cal mike said:

Some good information from JJ. I found some very good financial news by googling “ Philippine national debt”. There are a number of excellent articles outlining current conditions and future economic outlooks for the PI. I might add it’s quite an eye opener.

China 🇨🇳