Skip to main content

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. 

Labels:

Popular posts from this blog

Venezuela as a Cautionary Tale on #SahodItaasPresyoIbaba, Nationalistic Pride, Welfare State Economics

The Sunday Guardian Years ago, I wrote about Venezuela's pride and protectionism , under a more "formal" style of writing compared to my latest posts. I decided to use an even "less formal" and "less academic" tone since I'm not writing a term paper. Instead, it's like how a professor and a student discuss the thesis using first person over third person, using contractions, etc., while the thesis doesn't use such tones. Back on track, I thought about the arrest of Venezuelan President Maduro can spark debate. Was it a violation of sovereignty? I'm no expert on international law. However, Venezuelans can be seen celebrating Maduro's arrest. Right now, I'm using Gemini AI and Google search to help me find some sources for this blog. It's because I don't want my blog to become another gossip central, but a place to discuss facts with my own personal opinions (making sure they don't  derail the facts).  I used Venezuela ...
Read more

Venezuela's Pride and Protectionism

The Telegraph Venezuela is an oil-rich country yet it's a very poor country. Somebody could go ahead and give every unthinkable reason such as "foreign investments caused it" (a blatant lie) and "It's because America had economic sanctions in Venezuela". Yet, the answer can be found in several causes such as corruption. Yet, China and Vietnam, which can be seen to still have a good amount of corruption, are far more successful. The answer also lies in one policy--economic protectionism . The very idea that a country that first world countries used "protectionism" to succeed is a lie as proven by Venezuela's ongoing crisis. A common-sense examination of one root cause of Venezuela's continuing crisis Forbes magazine mentions this in "What Do Investors Need To Understand About Venezuela's Economic Crisis?" by Nathaniel Parish Flannery on December 21, 2016: Venezuela is far and away the worst-managed economy in the Americas . Ad...
Read more

Davide vs. Mahathir: Which Lolo Should Filipinos Take Economic Advice From?

The real issue isn't that something is old or new. Instead, if something old or new still works, or doesn't work! Many modern laws are built on some ancient principles, while adjusting to the current times!  The Constitution of Japan is actually older than the 1987 Constitution of the Philippines. However, it's more effective for the reasons that (1) their constitution is silent when it comes to regulating economic activities (ex., protectionist measures), and (2) it's a parliamentary system. Honestly, it's a pretty straightforward constitution compared to ours! As Mahatir Mohamad turned 100 today, I would like to raise up Atty. Hilario G. Davide Jr. once again. The problem isn't Davide's age but his unwillingness to embrace change when needed (read here ). This time, it's time to bring up a contrast between wise old people and unwise old people. A young person can be right where the old person is wrong. A young person can be wiser because he or she lea...
Read more

Filipino Manufacturing's Golden Age ENDED Because of the Filipino First Policy

Here's a picture from the Dose of Disbelief Page on Facebook. Here's something that it wrote: Filipinos once trusted locally made products more than imports. Before World War II, the label "Made in the Philippines" carried prestige, not stigma, reflecting a strong sense of national confidence in domestic production. Local products such as shoes, cigars, textiles, furniture, and food were often preferred over imports. This preference was rooted in the belief that local goods were better adapted to local conditions, tastes, and were often of comparable, if not superior, quality. This period showcases a strong historical era of consumer nationalism and thriving local industries. We need to look into the context of Filipino history  If we look at the Philippine history timeline , we must account for 1935-1940, during which the Philippines was under the Commonwealth government. Independence was declared from Spain on June 12, 1898. However, there was a transition period w...
Read more

Confusing Foreign Direct Investment for Foreign Imperialism for the Bajillionth Time

I guess those fools of the Philippine Anti-Fascist League (and many of its deluded supporters) either refuse to get it or are blatantly lying. Almost every rally held by what many believe are CPP-NPA legal fronts also confuses foreign investors for foreign invasion or even foreign imperialism . Once again, do I need to say that 100% FDI ownership is all about the shares and not land ownership ? What makes it even more hypocritical is that they are actually recording these things on imported media . They're sharing their anti-FDI rants using imported devices, imported platforms, and imported social media (read here ). When I do ask them on Facebook, they say how can they take them seriously and that they're "simply forced to participate in capitalism". Did anybody (especially those they call "evil capitalists") force them to buy the expensive Apple equipment when they could've settled for Xiaomi or Huawei?  A simple research on the dictionary will tell us...
Read more