The Beginner's Guide to Protecting Your Finances During a Pandemic

Here’s the ugly truth: The global economy, and thus everyone’s finances, are currently facing enormous risks. Exceptional circumstances have placed many businesses in a volatile state, and with the pandemic’s true extent unknown, we are left struggling to settle into a new normal. But as this all happens, we simply can’t afford to surrender our financial stability—rather, we need to do more to ensure we can weather the storm and keep ourselves on solid footing.

The market declines have understandably shaken confidence in investments, but this isn’t the first time markets have grappled with uncertainty. Market declines have come and gone, but those who’ve stuck with their long-term investments agree that they’re not worth panicking over. By making smart, long-haul investments, you can protect your wealth and weather these market fluctuations.

Here are three important tips to help you get started on a long-term, sustainable investment plan and stay financially resilient:

First, know your goals and limitations.

The backbone of every smart investment is preparation. Before anything else, you need to identify what you want to achieve in the long run. By setting goals, you can figure out which measures are right for you and how you can maximize any potential investments you may make. Start off by asking yourself these questions:

1. How long am I willing to wait until I see a return on my investment?
2. How much capital am I willing to risk?
3. To what degree am I willing to adjust my current lifestyle to make room for my investment?
4. What specific goals am I trying to reach in making this investment?
5. What are my backup plans if the ROI won’t meet my expectations?

Your answers to each of these questions help you understand your own needs, and from there, you can determine your understanding of risks and investments through a suitability assessment done with an established trust institution such as BPI Asset Management and Trust Corporation (BPI AMTC). A trained wealth manager can guide you in assessing your risk profile and recommend funds that match your goals.

Second, research what types of investments you can make.

Each kind of investment comes with different objectives, compositions, timelines, and risk profiles—so it might be a good idea to sit down with a wealth manager to understand which one complements your goals as an investor. To the uninitiated, these fund strategies may be a good place to start learning:

High dividend stocks are distributed by companies that usually perform well and are able to give portions of their profits to their shareholders. This means you’ll be getting returns on a fairly regular, long-term basis, but how big said returns are will depend on the performance of the company you’re investing in. With your returns, you can actually re-invest in more stocks.

However, a downturn in company performance might result in losses—but this risk can be mitigated with an eagle-eyed fund manager on your side. The BPI Invest Philippine High Dividend Equity Fund uses this investment strategy, and the regular dividends are a good buffer for when the market is volatile.

Low-cost index funds are investment funds that track the performance of a specific financial market segment—they’re one of the more common types of investment funds readily available.

Investing in a low-cost index fund gives you a way to instantly diversify your assets, and it balances out the risks across different sectors. The BPI Invest Philippine Equity Index Fund is one of the largest funds tracking the Philippine Stock Exchange, which makes for a good representation of the local economy. On the other hand, the BPI Invest US Equity Index Feeder Fund invests in overseas funds tracking 500 large listed companies in the United States through the S&P 500 index.

Interest-paying bonds such as government securities and corporate bonds can presumably be more stable than either of the previous options, but are greatly influenced by inflation and fluctuations in your purchasing power. The BPI Invest Premium Bond Fund or the BPI Invest Global Bond Fund-of-Funds are two options that invest in these types of securities.

These are just three of the options you can go with, and there’s much more to learn. Take your time and research as much as you can.

Third, find a reliable financial partner.

Ironically, investing in passive income takes a lot of work. If you do a bit of cost-benefit analysis, you might even find that the effort and opportunity costs of actively investing could outpace your returns. That’s why smart investors understand that they need team players on their side who share the same goals and have a long-term plan for investment growth.

Expert fund managers, like those from the award-winning team at BPI AMTC, can help you grow your investments and secure your future. As the largest standalone trust corporation in the country, BPI AMTC has a team with the skills and knowledge to work within your risk tolerance, while maximizing your money’s growth potential. With the option for daily updates on market trends, automated investments, and access to 28 of the best-managed funds in both the local and global markets, BPI AMTC's services make investing as easy and as fool-proof as possible.

Learn more about BPI Asset Management and Trust Corporation on its official website. For inquiries about its products and services, call 8580-AMTC (2682).

BPI AMTC as Trustee and Investment Manager is regulated by the Bangko Sentral ng Pilipinas.