Investment Management: Building Wealth

and Managing Risks through the Capital

Markets
Ramon George Atento
Davao City
July 26, 2014

Outline

{
Basics of Investing

Risks

Investment Personalities

Investment Options

Investments Online

THERE WILL BE NO JOURNEY WITHOUT A DESTINATION.

START WITH A

IN MIND

Goals not dreams

An anecdote

http://wallpaperart.altervista.org

http://reallyrobins.files.wordpress.com

1,440 US Dollars
= P60k +

Conditions

You cant transfer it

You cant give it to someone else
You have to use everything up
At the end of the day, the account should
have ZERO BALANCE.
If NO, it stops.
If YES, another US$ 1,440 will be given for the
next day. Same rules

When you were young...

TIME all of it
ENERGY all of it
MONEY none

http://www.myfourthirds.com

The Kiyosaki Way

http://thewirelessincome.com/

Millionaire Mind
Be frugal
Marry (once) the right
person
Invest rather than spend
Cars, cellphones, digital
cameras, gadgets
DEPRECIABLE
Real millionaires dont
show off, live in 3rd class
neighbourhoods, and
drive 2nd hand cars.

LESSON ON TIME
The most
extravagant of all
expenses is the
wastage of time.
Time is either spent
or invested

HUMAN LIFE STAGES

STAGE OF LIFE

ENERGY

MONEY

TIME

CHILD

+++

---

+++

STUDENT

++

--

EXECUTIVE

++

--

RETIREE

--

+++

+++

POINT OF RECALL!
VARIABLES OF SUCCESS:
ENERGY
MONEY
TIME
ADD: INFORMATION

NOW IS THE TIME

Dont put off until
tomorrow...
...what you could have
done YESTERDAY!
Start early in life.
TIME is the friend

If you are 20 years old now...

If you saved P1.00 everyday since the day you
were born, how much will you have today?
ANSWER: P7,300.00
Enough?
What if we award an interest rate of 10% p.a.
compounded annually?
P20,905.37 (It triples!)

What if we raise P1 to P5?

In 20 years, P104,526.90 (at 10% p.a.)
And this is the equivalent ONLY of P5 a day
or less than P2,000 a year.
For a person earning P15,000 a month
Saving 10% of this will amount P1,500 a
month or P18,000 a year
How much now?
P1,030,949.99

In summary
The greatest factors
in building wealth:
Time
Interest Yield
Amount of
Investment

The problem with Filipinos

We dont save
We save only to
spend afterwards
We save but we
dont invest
ADD: We don't
understand long
term

 The difference between today and 50 years

later depends on you.
The difference of a 1-degree turn will be more
and more defined as the time increases
11/20/2014

PSEi (1986-2014)

10 year bond rates (Philippines)

How will it happen?

Start early
Save regularly
Regular returns (goal: 15-20%)
No withdrawals
Stay healthy - Live long!
Good news. Patience correlates to long
life

11/20/2014

How much did you spend on your phone?

How much did you spend on your phone?

How much did you lose when you bought
that iPhone 4S? P38,200?
How about its opportunity cost?
10% return in 10 years P99,080.96 and it
doesnt stop there
20% return in 10 years P236,524.30 and it
doesnt stop there
Siomai store that returns P500 a day =
P1.83 Million

Richest Man in Babylon

1. Save at least 10% of your
income.
2. Invest your money in
order to earn more money.
3. Be cautious in investing.
Be informed.
4. Invest only in things you
understand. Dont invest on
tips.
5.Dont buy because
someone tells you. Study.
http://haebsil.com

The Capital Markets

Manila (1927) and
Makati (1963)
Philippines Stock
Exchange (PSE) in
1994
300 listed companies
130+ trading
participants
Barely 1% invest in
RP

Information available

Annual reports
Quarterly reports
Board composition
Major shareholders
Disclosures
www.pse.com.ph

How to earn 40x in less than 10 years

If you invested in Meralco in 2003, your P10,000.00 then is worth

P400,000.00 now.

Mutual Fund
Professional investing
You purchase stocks with the
best people
You divide your risk
Your exposure is low
You can exit anytime you
want.
You can start low and
accumulate later

D
INCOME SAVINGS = EXPENSES

MO

37

INFLATION

PRICES NATURALLY

RISE

2003

2008

BEAT INFLATION.

2013

Higher Income
Potential

Fixed Interest Income

Saving is

accumulating
your money.

Investing
is making your money

work hard
for you.

Stay Invested

LET TIME BE YOUR FRIEND.

40

Invest early
P1,000,000
GOAL

AFTER

RACE
TO A
1M
12
YEARS

MILLION

MIKE WINS! P1,000,000

P 1,007,036
P 949,936
MIKE

Invested 50k
and decided to
regularly invest
50k per year
in an investment fund
with an annual
average return of
9%

ROCKY
50
k
50k

P
600,000
P 600,000
CONTRIBUTION

50k

0
0

50k
50k

P 407,036
P 349,936
RETURNS

200k
50k

Postponed investing
for 3 years &
accelerated 200k in
the same investment
fund. Regularly
invests 50k from then
on.

41

Before you cross the street...

42

44

Investment Personalities

Corazon

Modesto

Miguel
Antonio

Alejandro

Prefers to walk

Loves to
ride a bicycle

Horseback riding
is his hobby

Prefers to ride
a race car

Investment
Philosophies:

Investment
Philosophies:

Investment
Philosophies:

OK with low
returns
Does not want to
see any decrease
in the value of her
money

Slowly but
surely
Opts mediumterm investments

Wants to have a
balance between
return and
income
OK with longterm investments

Investment
Philosophies:

Not afraid of
possible losses in
the short term
Wants long-term
investments

Customer Suitability Assessment

RISK
PROFILE
INVESTMENT
FUND

46

What are your options?

How do you invest in funds?

INVESTMENT
FUND

Direct Investment

Investment Fund

Knowing how much you own

Net Asset Value Per Unit

50

51

Low-risk

Short-term
(< one year)

Money Market
Fund
Higher
Income

1.5
%
Potential

Deposit Product

Fixed interest rate

0.6
%

PDIC Insured
net of tax

NonetPDIC
of taxes and fees
Insurance
No holding
period

With lock-in period

(Days: 35 / 63 / 91 / 182 / 364)

* Net computation for 1MM based on

0.75% published BPI 364-day Time
Deposit gross rate, as of January 2014.

* Based on 1-yr annualized performance,

as of December 2013. Past performance
does not guarantee future returns.

Moderate
Risk

Medium Term

(3+ years)

BPI Premium Bond

Fund

4.96
%

3-YR ANNUALIZED
net of taxes and fees
RETURN

* Based on 3-yr annualized performance,

as of December 2013. Past performance
does not guarantee future returns.

53

High Risk

Long Term
(5+ years)

BPI Equity Value Fund

17.69
%

5-YR ANNUALIZED
net of taxes and fees
RETURN

* Based on 5-yr annualized performance,

as of December 2013. Past performance
does not guarantee future returns.

54

High Risk

Long Term
(5+ years)

BPI Balanced Fund

14.06
%

5-YR ANNUALIZED
net of taxes and fees
RETURN

* Based on 5-yr annualized performance,

as of December 2013. Past performance
does not guarantee future returns.

55

Regular Subscription Plan Raise to Php5M

Investments Online www.bpiexpressonline.com

ITINERARY
Hotel
Tour

Shopping

OPEN
Investment Account

SUBSCRIB
E Fund
Investment

Units

VIEW
Investment Portfolio

SET UP
Regular Subscription
Plan

Manifesto
When investing
I will set my

G ALSand be faithful in achieving them.

I know that saving is NOT investing,

and that

of

generally

With high

because of inflation.

comes higher potential return.

I will let

be my friend.

I am committed.

I am an investor.

58

Buffett experience
2nd richest man in
the US (2011)
Built his empire
entirely from the
Wall Street
Average return >25%
per year since 1950s

My Investing Principles
1. Buy only within your circle of competence.
2. Buy only that which if the market closes
tomorrow and for ten years will still earn
you.
3. Buy only that which is lower than the
market average Price-Earnings
4. Buy only that which has a PEG of less than
1.00 (PEG is PE/Growth)

Blue Chips or Penny stocks?

Blue chips bought at a high price is not safer
than a second liner bought at a low price.
Blue chips are not always blue.
Penny stocks are not worth our pennies
They have the greatest chances of turning into
ten-baggers (10x)
They also have the greatest chances of turning
into worthless issues

Safety first
Take care of the downside and the upside will
take care of itself

See you at the top!

If investing requires
knowledge in
advanced
mathematics and
calculus, I would have
stayed selling
newspapers.

How to be a billionaire
1. Save at least 10% of your income.
2. Buy only what is necessary. Do
not save only to spend later.
3. Invest what you save.
4. Marry the right person!
5. Beware of your friends.

How to be a billionaire

6. Business sense. Business is business.

7. Dont forget to give back to charity.
8. Find your niche in the market.
9. Dont let your family members rely
on you.
10. DONT LET YOUR FRIENDS OR EVEN
YOUR CHILDREN KNOW YOURE RICH!

The blank space is for you

Thank You!