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Why I Feel Investing Money in UITFs Might Be a Good Idea While Studying DIY Stock Trading

It's said anybody can do stock trading. However, the idea can be very suicidal if one decide to rush into stocks without studying how to effectively do it. Some people can even recklessly borrow tons of money and end up harming themselves when the trade was at a loss. They might've borrowed the money from a loan shark for all we know. I'm trying to study the stock trade though there's a good option. AXA Chinese Tycoon is a managed fund. Now, there's also Unit Investment Trust Fund (UITF) which could be a good alternative while one is learning to do stocks. Stocks can be learned but remember--no investment is ever a walk in the park. Stocks need some time to learn. 

I haven't started direct stock trading it. Meanwhile, I'm aware that funds like the AXA Chinese Tycoon or the UITFs are powered by stocks. The pandemic has prevented me from doing direct translations. Instead, I decided to use GCash and ATRAM (linked to GCash) to start another trading portfolio. Since I already have bonds--I decided to invest some excesses right into some accounts. Before that, I'd like to share the differences based on Seedbox Philippines to find out the two baskets to put money into:

Pretty much, these are two alternatives for those who feel that they don't have the time, expertise, or the courage to do Do-It-Yourself (DIY) stock trading. The UITF (as its name suggests) is based on Net Asset Value Per Unit (NAVPU) while mutual funds would be about shares. The AXA Chinese Tycoon Fund is based on units from blue-chip Filipino-Chinese owned company stocks to which the value goes up and down according to the market performance. After I decided to get GCash to be able to pay people who don't use third-party deliveries - I decided to get into GInvest. I didn't know how to understand it yet so I placed a small amount to see how it goes. What I foolishly did was not thinking that if the performance is low--the NAVPU is low. A low NAVPU means that I'll be able to buy more units than when it's high. 

Let's take the ATRAM Philippine Equity Smart Index Fund. This fund is focused on the 30 companies that comprise the Philippine Stock Index. You can start for as low as PHP 50.00. However, I suggest saving up until you get a PHP 1,000.00 or even save up to PHP 5,000.00 and see how much the NAVPU is. It would be wise to see how much the NAVPU is and see how many units you'd buy. For example. investing PHP 1,000.00 when the NAVPU is 108 will mean you only get 9.2593 shares while investing it when the NAVPU is 101.21 means you get 9.88 shares meaning a few more shares than usual. Though, I might prefer to do value averaging because buying more units at a discount may mean getting more when the value rises up. It might be wise to invest PHP 2,000.00 or more when the market is down and only PHP 1,000.00 when the market is up. Other funds would involve foreign companies which can also be a good thing.

Right now, UITF costs are rather low as I've checked on GInvest. The stock market at an all-time low means stock prices are low. UITF portfolios are dependent on stocks. It would mean that if I bought more now--I'll be able to take advantage of future increases later. Going for PHP 3,000.02 per month may not give me what I want. Maybe, I pledge to at least invest a certain amount per month. However, it might be wise not to buy some units if the NAVPU is too high. Instead, it might be best to sell it or just let it grow. Though, one might consider the UITF if the price is so high then save up some money should the market go low again. Some people are still willing to buy at a higher price such as those who choose to buy high to sell higher or buyers who do money cost averaging. Some people invest the same amount per month regardless. Others choose to put more than usual when the market is low and put the default amount when the market is high.  

A discipline I need to develop is just to check the investments monthly or quarterly. What would be important to take note of is this--invest only what I don't need right now. I need to keep learning to save as well. I shouldn't invest the money needed to pay bills. Instead, I should invest whatever small amount is there first then make it a habit. That's what I've been taught but need to learn some more. I think investing every quarter would mean I may have some more money to spare. It would mean looking at the horizon if it's time to buy or time to sell. As said, I'm not selling any UITFs right now (though I did sell some older ones to test my skill). Now, it might be time to focus on growing the petty cash investments on GInvest into bigger cash investments. 

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