Top Investment Assets for Beginners

Top Investment Assets for Beginners

Sean: OK. If someone is interested in trying out multiple investments, which one would you recommend?

Karlo: What we always say to our clients as financial planners, is to always invest in an instrument that you understand, do not invest in something that you understand because there are a lot of platforms at this point in time. There are a lot of new platforms that are upcoming, and many people are hyped about it. But that is what we’re trying to avoid, it might be a good platform but if you don’t fully understand it, you might lose money. So you need to understand a particular investment first.

Karlo: I suggest, starting with a simple one, of course before investing, you need to have an emergency fund. You need to have protection from life risks. So we are teaching it on a step-by-step approach because what happens Sean, is if we dive in investments right away without savings or protection, we might really lose our money because there are risks involved in investing. But once you understand a particular platform, for example, you understand mutual funds, stock market, or even cryptocurrency, you have some parameters. You have some strategies when to cut the loss or realizing game. Maybe you can do it one step at a time.

Karlo: For example, you focus first on mutual funds, and once you increased the amount of your investment in that platform, then maybe you can go for the next one. Because what we want Sean, is for us to have volume for a particular investment. Let’s say, you start them with five thousand in a mutual fund, and then you suddenly want to go into another platform, but your investment in the first one has not gained any volume, so you can’t really feel the possible income. We need to set the consistency first and then we need to study it first. I wrote an article about investing like a basketball legend. Imagine, you’re playing basketball, for example, you’re still playing into your local residence league. So you need to practice more, you need to learn a lot more skills – dribbling, passing, shooting things. And then once you’re done with the local residence league, you can now go to the city level, and maybe into the national level.

Karlo: So investing you should focus first on one platform and then eventually you can diversify because diversification is very important to manage the risk. Because our goal is to maximize profits and minimize the risk. Nowadays, a lot of people are being hyped. For example, there’s a newly launched platform, people say “let’s invest in that, we’ll become rich for sure.” But that’s not really investing, we need to know that there are risks involved, and I know a lot of people who already lost their money because – first, that person did not understand the platform. When investing, it is important to study the platform, once you have a certain volume, maybe you can go for the next platform.

Sean: Yeah, completely agree. In my opinion, one of the easiest ways to start for me is the stock market. Easiest because you can do it yourself, there are so many resources out there. I personally learned from Marvin Germo. I attended his Stock Smarts seminar when he was doing it live, I’m a big fan of his work, his books, and I cannot recommend him enough. Like, if you want to learn about stocks, he is the go-to guy, and the technical and fundamental analysis that I know now is because of him.

Sean: Right now, stocks are doing better – earlier this year. So if you’re starting out, now’s a really good time. But also invest first in herein, what you know, how much you know about the platform, right? If you’re going to trade stocks. Study fundamental and technical analysis first. Don’t just buy stocks because someone told you to buy stuff. Crypto is very high risk. Meanwhile, real estate is very high capital. So I think it will just go down to personal preference, right?

Sean: I personally don’t invest in condos, I would rather invest in land and lots. But you know, the first real estate investment I did was my house – this house I’m living in, which is actually in 2017. And that’s like I’ve been doing business and saving up for like seven years already. That should tell you how much capital you need to buy a house and lot, and I’ve been able to also procure other lots after this one. And it takes a lot of capital to be able to buy land now. It’s a lot of capital and hopefully, it pays off, by the rate that land is appreciating, it would pay off. So there’s a lot that I know of, and I personally checked it out, like in four years’ time its price increased by 300 percent. So the one who bought it gained 300 percent already, and we’re talking in the millions, right?

Sean: Agriculture is also something that’s very interesting. A lot of people are exiting there, you know, like the older farmers, their kids don’t want to run that business anymore, don’t want to run the farms anymore. So there are legacy family businesses in agriculture right now where you can buy the land or rent the land. That’s also an option and just get everything and learn it. You have to be there on the ground. That’s just the catch of it, you have to be there, you have to learn it, you have to know your people, you have to have a good relationship with your farmers. It’s also business. It’s also business.

Sean: When you invest in agriculture, it’s also business. Unless you know someone and they’re willing – you are there doing the work like my investment in agriculture is in sugar. So I know someone and they’re doing it for like five generations already, they’re experts. And I was fortunate enough to be invited to invest there for I don’t know why, but I was fortunate enough to be invited to invest there and I’m very happy with our investment there.

Sean: So there are so many investments that you can get into, there are the easy ones where you just need a couple of thousand pesos to get in. And then there are the super expensive ones where takes you years to be able to get in there. But at the end of the day, you have to know your stuff. You have to know what is a good buy so that you can sell high in the fastest amount of time, with the lowest risk. That’s the best way to do it.

Sean: What would you recommend that people invest in?

Sean: I think this question has the same answer – invest in what you know. If you check out my stock portfolio, a lot of it is telco and tech stocks, because that’s what I know. So, Globe, PLDT, Jollibee – I have Jollibee because you know, Jollibee is everywhere. And then in my US stocks, I have a lot of tech stuff, like tech that we personally use in SEO-Hacker, I invest in them. SEM Rush is about to take off in the technical analysis, so I’m not telling you guys to buy, right? But I’m invested there. I use that software. We’ve been partnered up with that software. They went public this year. I’m very happy about that. For those of you who are looking at investing in the US tech market, their code in the market is SEMR.

Sean: How do I know what that investor I am? I think there are tests that you could take right based on your risk profile. Can you tell us a bit more about that Karlo?

Karlo: Yeah. Aside from the risk profile questionnaire that you can take, you can also consult a professional on how you can assess your risk profile. And also you need to consider also your goals or the purpose of your investment. For example, if your investment is for a Long-term purpose, the risk that you can take may vary from an investment, wherein you will use it for the next three to five years. Another example Sean, someone who will invest for retirement can be aggressive. I really like this analogy, lets’s say you’re driving in the expressway, if you’re still far away from the toll gate, your speed is maybe around 80-100 hundred kilometers per hour. But when you are approaching the toll gate already, you need to slow down a bit. So the same thing with investing, you need to know for the purpose of your investment because it can also help you identify if you can be aggressive; aside from the risk profile questionnaire of course.

Karlo: Once you identify that you’re aggressive, you need to know the purpose of your investment. Let’s say that you’re an aggressive investor, but the purpose of your investment is something that you need after three to five years, and think you need to place it in a more conservative platform. For example, if you will be having a long-term purpose, you can consider the index or the top companies in the stock market, but if you will be investing for the short term, maybe you can consider money market funds that are more conservative. Or maybe you can diversify like bonds – place some of your investments in bonds or government or private equity securities.

Karlo: And of course, you might consider also digital banking for short-term purposes. Because if you haven’t seen the interest rates of some digital banks, they are higher than the usual savings account. So first, identify the goal or purpose of your investment and then, of course, try to seek a professional’s advice. And after that, you can identify your risk appetite, if you’re conservative, moderately aggressive, or aggressive.

Sean: Yeah, good stuff. I guess I’m going to be answering in an unconventional manner, which you may never have heard this advice before. But for me, try out a little bit of everything, and then you’ll know how you really are as an investor, you know. If you try out crypto and you can’t sleep well at night, then you know you should be playing it a little bit more conservatively. If you’re invested in tech stocks and you still can’t sleep well at night because the tech stocks are a lot more volatile than, let’s say, commodities or the retail, commerce, you know, the brick and mortar commerce stocks, then you might be still a little bit more conservative.

Sean: I mean, I did take that test, that risk appetite test and it came out that I’m somewhere in the middle, but I have crypto and a lot of tech stocks, so I’m not sure if – yeah, for me, just try it out. That’s going to be my answer there. Always know that my advice is always just to put in the money you’re willing to lose. If you’re trying out, you’re just trying to learn. You want to know things, always just put in money you’re willing to lose, or there are virtual accounts that you can use, the virtual money that you can play with. That’s good. Yeah, that’s good practice for you, if you don’t want to risk your real money first.

Sean: Question from Zara, is it advisable to apply for a separate bank account and wait for the small interest it gives me; or is it better to invest that money to crypto or anything that would profit more and faster?

Karlo: First off, Zar, as I have mentioned a while ago financial planning is a step-by-step process. You need to have a particular emergency fund first. And of course, it’s not that we are strictly implementing it, it’s still up to you. But what we are recommending once you are able to save a certain portion of your income. Yeah, you can do a separate from your payroll, so that you can’t withdraw it, that’s a good example.

Karlo: Once you are set with your emergency funds, you have some protection from life risks like insurances, life insurance, health insurance, and then you want to invest in cryptocurrency. Yeah, that will be a good way. But again, you need to do your research, are you willing to accept the volatility of cryptocurrencies? If yes, then you can go ahead and invest in crypto. And of course, you need to consider also that it’s not about getting profit right away. Sometimes, if we focus on the profit too much, we lose the strategies. Like Sean mentioned a while ago, we need to have some technical and fundamental analysis in decision-making. We should just not depend or rely on the advice or decisions of famous people.

Karlo: So we need to have a certain personalized strategy because there’s no single investment strategy that will work for everyone. So you need to make sure that you really understand what you’re doing, are you willing to lose this money in case it will fluctuate. We all witnessed how much crypto fluctuated in the previous years, some people gained so much on that, but there are also people who lost a lot on that fluctuation. To establish first the foundations, like the savings and protection, then after that, once you identify that you’re comfortable with crypto, then go ahead and do crypto trading, but you still, need to have some parameters before you can take profits.

Sean: Yeah, good stuff. So I had an AMA episode as well, in the podcast with Randall Tiongson and his crypto portfolio is like five percent or less. So it’s just super small. And again, it’s the money that he’s willing to lose. I would say if you need the money, don’t invest it. Just put it in your bank account because you need that money. If it’s excess money, then you can invest it.

Sean: Where do you invest it? Invest it in a place that you know a lot about. Like if you know a lot about stocks, put it in stocks, if you know a lot about real estate, put it in real estate, you know a lot about agriculture, put it there. You know a lot about business, put it there. So it depends on what you know – invest in what you know. That’s how I’d answer this one.