The ABCs to Bouncing Back

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We are only at the beginning of the year 2016. This may just turn out to be a great year to make money.

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What is No. 1 on your dream list for 2016?

What are the cool things you want to do this year?

Are your savings and investment strategies being implemented correctly to realize them?

Could it be that your finances have been sidetracked by the rapid drops in the various global equity markets?

Whatever your situation now, do not wait for your coffers to be empty. Preserve your cash flow positive financial statement by revising your budget and altering your list of priorities. Cut your spending. Shy away from consumer debt.

Should you have no back-up financial plan, consider this ABC action plan to bounce back.

First, attach yourself to winners. They are the positive thinkers. Optimists. Performers.

Network with them. Consult them. Read their books. Attend the talks, seminars and workshops they conduct.

Second, break down your goal into smaller doable actions. Take baby steps, is how some people would put it.

If you are into stocks and equity investments, stick to your buying plan. It could be a monthly top-up, e.g., purchasing P2,000 to P5,000 worth of unit investment trust fund (UITF) or of variable universal life insurance (VUL) investment fund/s units.

Juggle up your funds by doing peso-cost averaging and fund switching (particularly with VUL funds).

Take a moment to review your portfolio of investments. Determine what to sell and convert to cash, what to buy, what to keep.

With the market currently volatile, it would be good to increase the percentage allotment for your savings account. The saying “Cash is King” is so true at this time. The available fund reserve can come in handy, right?

Third, calculate your risks and commit to see them through. When you applied to purchase your UITF or mutual fund or VUL, you filled up a client, risk profile questionnaire, remember? Go back to your answers. What is your risk tolerance, your investment yield time frame?

You will need “commitment” to see it through.

Now is a good time to talk with your financial advisor (both life-insurance agent and mutual-fund agent) and engage the services of a financial planner.

Preferably a registered financial planner who can help you plot your personal or family finance blueprint. Modeling it like a business. A financial advisor, mentor or RFP can help you identify the best moves if the need to change things arises.

It is likely they will recommend that you “layer your wealth strategy with safe income ideas” to borrow the words of Daniel Ameduri, president of FutureMoneyTrends.com.

“For any market, but especially in a bear market, make sure you are only partnered with the cream of the crop for these type of deals,” he wrote in a recent FutureMoneyTrends advisory.

Fourth, don’t panic. Hopefully, you are not the emotional type. Should you be undecided to sell to cut losses or to sell at a loss, consider pausing. Wait a while. Do nothing. Wait until you have a clear head to think things through.

On the other hand, you may want to take a speculative position.

We are only at the beginning of the year 2016. This may just turn out to be a great year to make money. It could be in the stock market, UITF, mutual funds, VUL investment funds or in business.

edison-dy-ongEdison Dy Ong is a registered financial planner of RFP Philippines. He splits his time between freelance writing on business and technology and his F-U-N (Financial Understanding Now) Time financial literacy education advocacy.

Source: http://www.businessmirror.com.ph/the-abcs-to-bouncing-back/

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