Financial Adviser: 5 Investing Resolutions for 2025 and How to Achieve Them

The start of a new year is an ideal time to evaluate your financial goals and set resolutions that can refine your investment strategies. In 2025, as the Philippine economy explores challenges like elevated interest rates and emerging risks of global recession, it’s more important than ever to stay focused on long-term objectives.

Whether you’re an experienced investor or just starting out, setting clear investment resolutions can help you stay on track and reach your goals.

Investing Resolutions for 2025

Investing is constantly changing, shaped by market trends, government policies, and your own risk preferences. By creating practical resolutions, you take control of your financial future, develop better habits, manage risks, and move closer to your long-term goals.

Before diving into specific resolutions, it’s important to start with a strong investment strategy. This strategy acts as your guide, helping you make smart decisions even when the markets are uncertain. It considers your comfort with risk, how long you plan to invest, your financial objectives, and what’s happening in the economy.

In today’s market, aligning your strategy with reality is key. A good strategy helps you reduce risks and take advantage of growth opportunities.

By tying your resolutions to a solid strategy, you set yourself up for long-term success. Let’s explore five actionable investing resolutions for 2025 that can help you build a thoughtful and flexible approach to investing.

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1| Build your investable funds by saving more and monitoring closely your expenses

Saving more and increasing your contributions is an important step towards building a solid foundation for any investor. By saving more, you are creating a pool of funds that can be invested to generate wealth over time.

Evaluate your current savings rate. Take a close look at your current savings rate. How much of your income are you setting aside for savings and investments? It's important to have a clear understanding of where your money is going and how much you can realistically save.

Identify opportunities to cut back on unnecessary expenses. Review your expenses and identify areas where you can cut back. This could include reducing discretionary spending on non-essential items, finding ways to save on monthly bills, or reevaluating your subscription services. By trimming unnecessary expenses, you can free up more money to put towards savings and investments.

One effective way to ensure consistent savings is to automate the process. Set up automatic transfers from your checking account to a dedicated savings or investment account. By doing this, you eliminate the temptation to spend the money and make saving a priority.

Start by determining how much you want to increase your contributions and set a timeline to achieve them. For instance, you might decide to raise your savings contributions by one percent each month.

If you currently save P10,000 per month, increasing it to P10,100 in the first month and adding another one percent each subsequent month will result in over P13,000 in monthly savings by the end of the year. Alternatively, you could set an annual goal, like increasing your savings by 12 percent over the year, ensuring steady progress toward your objectives.

Don’t underestimate the power of these small, consistent increments. A one percent monthly increase might seem modest, but over time, the cumulative effect can significantly boost your investable funds.

This growth is amplified by the power of compounding, where your returns generate additional returns over time. For example: If you save P10,000 monthly and increase your contributions by one percent each month, you’d save approximately P130,000 by year-end, compared to P120,000 without any increases.

Over 10 years, with an average annual return of six percent, the additional contributions could grow to over P200,000 more than if you kept your savings static.

Setting specific and measurable targets keeps you motivated. Breaking your goals into smaller, manageable increments—such as a monthly increase—creates a sense of accomplishment and progress. Each milestone reinforces your commitment, making it easier to stay on track.

In the long run, these small adjustments to your savings strategy can result in substantial growth, transforming your financial outlook and helping you achieve your broader investment goals.

2| Protect your portfolio by diversifying your investment risks

Diversification is a fundamental strategy in managing risk and optimizing returns in an investment portfolio. By spreading your investments across different asset classes and sectors, you can reduce the impact of any single investment on your overall portfolio performance.

Start by evaluating your current investment portfolio. Take a close look at the assets you hold and determine if you have a well-diversified mix of investments. Consider the asset classes you are exposed to, such as stocks, bonds, cash, and real estate, as well as the sectors within those asset classes.

Real estate, for example, has traditionally been recognized as a hedge against inflation, safeguarding an investment from losing its value amid a decline in purchasing power. However, historical market data indicates that property stocks, in general, tend to decline when inflation rises

This trend is attributed to the fact that higher inflation often leads to higher interest rates. As interest rates increase, borrowing becomes more expensive, potentially reducing the demand for home loan financing and resulting in lower property sales.

The property index in the Philippine Stock Exchange has shown a negative correlation with the movements of the 10-year Philippine bond yield 63 percent of the time since the year 2000.

The current outlook of lower interest rates may offer some relief, but it's important to assess whether this trend is sustainable given the prevailing market risks. If the reduction proves temporary, consider using this opportunity to reduce your exposure to the property sector.

It's always important to be exposed to a wide range of asset classes and sectors. This helps ensure that your portfolio is not overly concentrated in any one area. Evaluate whether you have a balanced allocation across stocks, bonds, and other asset classes.

Additionally, consider the sectors within each asset class, such as renewable energy, gaming, or consumer goods. Aim for a diversified mix that reduces your vulnerability to any specific industry or sector.

One key aspect of diversification is investing in assets that have low correlation with each other. This means that their performance does not move in lockstep. Look for investments that have historically shown little correlation with your existing holdings.

For example, if your portfolio is heavily weighted in Philippine equities, such as stocks listed in the Philippine Stock Exchange (PSE), consider diversifying by adding assets like government bonds, corporate bonds, or even real estate.

Historical data shows that the PSE Index tends to fluctuate with economic cycles, while other asset classes, like bonds, are less affected by market volatility.

Investing in Real Estate Investment Trusts (REITs), such as Ayala Land REIT (AREIT) or Citicore REIT (CREIT), can also provide diversification. REITs in the Philippines generate income from property rentals and are less correlated with the equity market's daily volatility. For example, AREIT's dividend yields in recent years have averaged five to six percent,  which offer steady income even during times of stock market uncertainty.

Gold has been a popular hedge in the Philippines as well. During periods of peso depreciation or high inflation, gold prices often rise. For instance, in 2023, when the Philippine peso continued to face pressures against the U.S. dollar due to global economic uncertainties, gold prices rose by approximately seven percent.

This further demonstrated gold's value as a hedge against currency depreciation and inflation, which makes it a strategic addition to a diversified portfolio.

With the peso's fluctuations against major currencies, foreign currency-denominated bonds or funds (e.g., USD bond funds) provide an additional layer of diversification. For instance, U.S. dollar bonds or income funds allow investors to benefit from currency appreciation while earning consistent yields.

By combining these assets, such as bonds, REITs, gold, and foreign currency-denominated investments, you can build a portfolio that balances risk and return in the Philippine market. This strategy ensures that your investments are not overly influenced by the performance of a single asset class or economic event.

3| Educate yourself and stay informed through continuous education

Investing is a lifelong learning process. Resolution number three is to commit to educating yourself and staying informed about the ever-changing financial landscape.

The financial markets are dynamic and subject to constant change. By staying informed, you can adapt your investment strategies to align with current trends and take advantage of emerging opportunities.

By continuously learning, you can expand your knowledge base and gain a deeper understanding of different investment approaches. You can learn by reading books to gain valuable insights and learn from experienced authors their experiences and mistakes. Books are an excellent source of in-depth knowledge on investing.

Attending seminars or webinars offer opportunities to learn from industry professionals and experts. They often cover specific topics or investment strategies and provide a platform for interactive learning.

One program you can attend is the Registered Financial Planner (RFP) Program, which teaches basics of personal financial planning. Attending programs like this allows you to ask questions, engage in discussions, and network with other like-minded individuals.

Staying updated with financial news is essential for understanding market trends, economic indicators, and company-specific information. Reputable financial news sources such as Bloomberg, CNBC, and Channel News Asia provide accurate and timely information, helping you make informed investment decisions and gain a broader perspective.

If you can find mentors who can provide valuable guidance and insights based on their extensive experience in investing, that will be a great help. A mentor who aligns with your investment style can accelerate your learning and development as an investor.

By engaging in ongoing education and learning, you can make more informed investment decisions and adapt to evolving market conditions. Remember that investing involves risks, and continuous education helps you manage those risks effectively.

4| Review your investment portfolio and rebalance regularly

Regularly reviewing and rebalancing your investment portfolio is a critical aspect of maintaining alignment with your financial goals and risk tolerance.

Setting a regular schedule to review your portfolio ensures that you consistently assess its performance and make necessary adjustments.

At a minimum, it is recommended to review your portfolio once a year. However, you may also consider conducting reviews more frequently, especially during significant life events such as changing careers, getting married, or nearing retirement.

During the portfolio review, one of the primary considerations is to assess whether your investments are still in line with your desired asset allocation. Asset allocation refers to the distribution of your investments across different asset classes like stocks, bonds, real estate, and cash.

It is based on your financial goals, risk tolerance, and time horizon. Over time, market fluctuations can cause the asset allocation to deviate from your original intention. Regular reviews allow you to identify any imbalances and take corrective action.

Rebalancing involves adjusting your investment holdings to return them to their intended proportions within your asset allocation. When reviewing your portfolio, you may find that certain assets have performed well during good times and now represent a larger portion of your portfolio than desired. These are known as overperforming assets.

On the other hand, some assets may have underperformed, resulting in a smaller allocation than intended. By rebalancing, you sell a portion of the overperforming assets and use the proceeds to buy more of the underperforming assets.

Let’s assume your target asset allocation is 60 percent Philippine equities and 40 percent government bonds. You set this allocation because it balances growth potential with stability, based on your risk tolerance and investment goals.

If the Philippine Stock Exchange Index (PSEi) had a strong run in the first half of the year this year, your equity allocation as a result would have increased to 70 percent of your portfolio due to significant gains in stocks like Ayala Corporation and SM Investments.

Meanwhile, your government bonds, such as Retail Treasury Bonds (RTBs), underperformed, which caused your bond allocation to shrink to 30 percent of your portfolio.

To rebalance, you would sell a portion of your overperforming equities (10 percent) to bring them back to their intended 60 percent allocation. The proceeds from these sales could then be reinvested into government bonds, which are now underweighted, to restore them to their target 40 percent allocation.

By selling a portion of overperforming equities locks in profits, you protect your portfolio from potential market corrections. By reallocating funds to underperforming government bonds, you take advantage of lower bond prices which helps you benefit from future price recovery as interest rates stabilize.

Rebalancing is an important step in maintaining your portfolio's alignment with your risk tolerance and long-term investment strategy. This process ensures that your asset allocation remains consistent, preventing overexposure to specific asset classes or sectors during volatile market conditions.

Over time, certain assets in your portfolio may perform exceptionally well, while others may lag behind. Rebalancing involves selling a portion of the appreciated assets and reallocating those funds to underperforming or underweighted areas. This helps diversify your portfolio and reduces the risks associated with overconcentration in a single asset class, industry, or security.

By regularly rebalancing, you not only manage concentration risk but also reinforce a disciplined investment approach. This ensures your portfolio remains resilient and aligned with your financial goals despite market fluctuations.

5| Master your emotions to achieve investment success

Emotional investing can be detrimental to long-term investment success. Make it a resolution to stay disciplined and avoid making impulsive decisions based on short-term market fluctuations or emotions.

Emotional investing often leads to impulsive decisions driven by fear, greed, or panic. For example, during periods of market volatility, investors may be tempted to sell their investments out of fear of further losses or buy into a rapidly rising market due to the fear of missing out.

These impulsive decisions can result in buying high and selling low, which is contrary to the principle of buying low and selling high. By staying disciplined, you can resist these impulses and make rational decisions based on your long-term investment strategy.

Emotional investing often leads individuals to try timing the market, which can result in missed opportunities or significant losses. By sticking to your investment strategy and avoiding market timing, you can focus on your long-term goals and avoid the stress and uncertainty associated with short-term market fluctuations.

Investing is a long-term endeavor, and success is often measured over extended periods. Emotional investing tends to focus on short-term gains or losses, which can lead to a lack of perspective and hinder your ability to achieve long-term financial objectives.

By maintaining discipline and focusing on your investment strategy, you can stay committed to your long-term goals and navigate short-term market volatility with greater resilience.

Consistency is crucial for building wealth over time and benefiting from the power of compounding. By avoiding emotional reactions and staying disciplined, you can make consistent investment decisions aligned with your long-term strategy.