How to Choose the Best Investments in the Philippines

One of the usual questions I get from my readers is how do I choose my investments? Below is a screenshot I took from a private message of an Instagram follower. So in this post, I’ll share what I know, what I have learned, and what I personally practice.

How to Choose the Right Investments Philippines
A message from a follower on my
Instagram Account: thethriftypinay

Picking the right investments for you is a complicated decision. Furthermore, the tips listed below are just a quick guide.

My approach may be different from yours, so you always have the option to take everything I say with a grain of salt.

And as always, conduct your “investment due diligence”, because what you don’t know can eventually hurt you.

How to Choose the Best Investments in the Philippines

Contrary to what some may say, choosing the right investment is not as basic as A-B-C. No financial advisor or financial planner would know the answer right away if presented with such a question. Because the truth is, there is no general answer. The right investments depend on the person asking the question. Choosing the best investment is quite reminiscent of Othello’s catchphrase: A minute to learn, a lifetime to master. 

It is not easy, but there are 4 questions you can ask yourself to determine if you are on the right track. Answer these questions and you get a better perspective on how to choose the right investments in the Philippines.

4 Questions to Ask When Choosing The Right Investments For You

1. What are your Life Goals?

What’s your investment for? For example, is your life goal to retire in another country? If yes, you might not need to buy a house in the city where you live right now and instead, start looking for a property where you want to retire eventually. If you want to retire in 20 years with a nest egg of P50 million, how much will you be needing to save right now to achieve that amount?

The first aspect you should straighten out is your goal. Because what good is an investment if you are not even sure what you will need it for in the first place.Remember that your goals may be different from the person seated next to you. Assess your personal goals as this will be the motivation behind the investment you wish to commit to.

2. Risk Profile: What type of RISKS can you take?

Risk profiling is something that is commonly used to describe how willing you are to take a risk to get a desired investment return. The usual profiles I see and encounter when I answer investment risk assessments quizzes are the ones listed below. But take note there are sill variations to this and can be more than three:

a. Conservative – You can’t bear the risk of your principal investment declining.

b. Moderate – You can take a moderate amount of risk, yet you still remain cautious when choosing a type of investment.

c. Aggressive – You are willing to accept higher risks in exchange for a “possible” higher growth of your investment.

3. Time Horizon: When do you need the money? 

When do you want to achieve your goals? Is it just 5 years from now? Or about 30 years from now? If you know when you will need it, you will not withdraw funds before the appointed time. For example, you need the money to finance your kid’s college education. Of course, you should only reap your investment when they are about to enter college. If it’s 5 years from now, then a property may not be a good choice of investment since it’s not liquid, i.e., not easy to sell for the desired price. If you have 10 more years to prepare then a time deposit investment might not be ideal given its measly rate of return.

While if you need to achieve your goal within a year, you might compromise your money if you choose stocks as your investment instrument (well, unless you are the extremely aggressive type). Why? Because the stock market is very volatile. Chances are you might not produce gains just in time when you’ll be needing the money.

4. What is your Personal and Family Situation?

Do you plan on having children? If so, you might want to invest for their education. Will you be providing for your parents when they retire? Do you need to buy a house, or will you be inheriting a house from your parents? If so, you might not need to save for a house but instead, focus on another property investment or just focus on another goal.

List of the Best Investment Ideas in the Philippines

Once you answer the 4 questions above, the final straw is knowing if you have the right investment vehicles in mind. However, not all investments grow your money at the pace you might be expecting. This might be a factor that endangers you from achieving your goal. The right investment will always have your goals inclined.

“What type of investment is best for my goals?” I’ve asked this myself before. And because I had a tough time jumping from one website to another in search for the answers, I’ve come up with my own blog post about the different investments you can try that are suitable for your goals.

The investments in this article linked below are summarized based on their:

  • Type
  • initial investments
  • risk level
  • returns
  • tax implications
  • and more

Here’s the link: Best Investments in the Philippines 2022

Your investment instrument must coincide with your goals, which were answered by the first three questions. Find an instrument that meets your specified time frame before the actual moment you need to reach your goal.

What then is the right investment?

The right investment in the Philippines is one that gives you a clear perspective of the direction you are treading. The investment that addresses your needs and answers to your goals. There is no one-size-fits-all type of deal. Begin with the end in mind. This way, the money we save and invest will be dedicated to something we truly need. And not end up spent on senseless frivolities. Again, as I previously mentioned, this article is just a quick guide on how to choose the right investments for you.

Did you find this article informative? If yes, kindly share this to your family and friends.

With what you have learned, have you chosen what the right investment is for you? If you have, I would love to know what your specific goals are and what kind of investment(s) you plan to take on. Cheers to building a Strong Financial Foundation!

Ameena Rey-Franc of The Thrifty Pinay

How to Choose the Best Investments Philippines

By Ameena Rey-Franc

Recognized as one of the Top Finance Blogs in the PH. Ameena Rey-Franc (founder of TTP) is a former Banker and BS Accountancy graduate turned Blogger, Keynote Speaker, and entrepreneur. Currently an RFP delegate, she is also the Author of a book about Financial Resilience and has held seminars for reputable companies like GrabFoodPH, Pru Life UK, VISA, JPMorgan Chase& Co., Paypal, Fundline, Moneymax, and many more. The Thrifty Pinay's mission is to empower women to LEARN, EARN, and be FINANCIALLY-INDEPENDENT no matter what life stage they are in.