Jun 21, 2010

There is hope

These coming months will be especially difficult for our country.

We have the El NiƱo drying up our water sources and creating havoc on our agriculture.

Campaigns and the elections will create a lot of stress in trying to discern who is best for our country and our respective communities.

The bright side of things is that whatever the result, for as long as the elections are conducted and concluded credibly, our economic future will be very bright.

However, if there is a failure of elections caused by the untested automated system, what will surely follow is a chaotic economic and social environment.

More jobs will be lost and each one will have to keep struggling to keep whole until better times come.

Yes, better times will come and we want to look ahead with this sort of parable of HOPE that someone shared with me.

The story has to do with the pear tree in a country, which had four weather seasons, namely, winter, spring, summer and autumn.

There was a man who had four sons whom he wanted to teach not to judge things too quickly.

He sent each of them on a mission to go and look at a pear tree that was far away.

The first son went in the winter, the second in the spring, the third in the summer and the youngest in the fall or autumn.

When they had all gone and arrived, he called them together to describe to him what they saw.

The first son said that the tree was ugly, bent, and twisted.

The second son said that the tree was covered by green buds and was full of promise.

The third son disagreed and said the tree was full of sweet smelling blossoms that smelled so sweet and looked so beautiful.

The last son said that he saw the tree full of ripe fruit ready to be picked and full of life and fulfillment.

The father explained to them that all of them were right because each of them saw the tree in only one and different season of life.

He told them that you couldn’t judge a tree by only one season of life.

The essence of what it is can only be measured at the end after completing all the seasons.

Therefore, if you give up on the tree during winter, you will miss the promise of spring, the beauty of summer, and the fulfillment of autumn.

We can apply this parable to our financial life where there are also these four seasons.

We are still probably in the winter of our financial options.

It has been very difficult for everybody whether an ordinary income-earner or a person with substantial wealth.

In fact, we have seen some take the radical solution in ending their lives simply because they are incapable of seeing farther than winter.

Just as sure as night and day, spring will follow winter.

The challenge though is that it is difficult to predict when each season will end.

It is especially most difficult to accept that “autumn” when all the big profits can be made will end.

Fortunately though, in the financial world, there can be little season cycles within the big season.

There will always be chances to save, invest and earn.

Every asset class has its time.

The challenge is to know which asset class rules in a given season.

This is why I always advise people to choose the right investment option only after making their personal financial plan based on their Personal Statement of Assets and Liabilities (SAL) and Personal Income and Expense Statement (PIES).

Mutual funds (MF) or Unit Investment Trust Funds (UITF) are usually right for most people because you need not invest all your savings in it.

It is also a long-term investment using savings that you can practically “forget.”

Just choose the best MF or UITF that will fit your objectives.

MF range from P5,000 minimum investment and UITF from P10,000 minimum investment.

Invest a small amount in it regularly, preferably monthly whether the market is up or down.

In this way, you will be averaging your cost over the years.

You do not have the look at it too often.

If you are buying regularly, your average cost will surprise you over the years.

Of course, the rule is always to buy low (during winter) and sell high (during summer and autumn).

But we cannot always be checking the market, unless it is our job.

MF and UITF managers know the seasons within the seasons and they will make their funds grow accordingly.

Don’t let the pain of one season destroy the joy of all the rest.

Do not judge life by one difficult season.

We still have the rest of our life still ahead of us.

For those interested in our Pisobilities Seminar on Saturday March 20 2-4pm, please call 6373731 or 6373741. For email inquiries, info@colaycofoundation.com.

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