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ilocano
03-06-2009, 01:53
Guys,

Apart from our unreliable SSS, can you suggest a more plausible (and safe) way to save up for retirement??

cznayr
03-06-2009, 02:21
Guys,

Apart from our unreliable SSS, can you suggest a more plausible (and safe) way to save up for retirement??

well sir, depende sa risk aversion mo... less risk less ang interest rate na you can earn...

I would prefer ang mutual fund kaso ngayon dahil sa crisis baka magnegative or di gumalaw ang principal mo...

May mga banks din na dahil sa kakulangan ng funds ay nagtataas ngayon ng interest rate.. i.e. hsbc e-saver (kaso middle east lang) that offers 5.3% p.a., lang maintaining balance lang minimum account... ito pinakasafe na maisip ko..

Allegra
03-06-2009, 02:33
real estate , look for bargains

bugoyski
03-06-2009, 03:33
Real estate, as mentioned above.

Or precious metals like gold or silver.

Pwede rin lead, brass, and copper. :2gun:

cebuboy
03-06-2009, 04:10
What about guns and ammo? Price of 5.56 is around 12 a pop now its 24-28...

jimbullet
03-06-2009, 04:21
I think it should be liquid funds.

akula
03-06-2009, 04:55
What about guns and ammo? Price of 5.56 is around 12 a pop now its 24-28...

I like how you think...
None of my guns has depreciated so far... and I'm enjoying them :)

Real estate would be relatively hard to liquidate, but would be a nice investment IF you're have them rented or leased. Otherwise, squatters and realty taxes are headache.

Precious metal is quite volatile.

Cars and Electronic gadgets -- forget them...

Spread your risk. There are some pension plans from RELIABLE companies with added life insurance bonus. Be careful of high returns... just too good to be true.

antediluvianist
03-06-2009, 05:14
You will get about P11K-P12K/month, at this time, from the SSS, if your contributions (at least 120 months) are fully paid. You can get the first 18 months lump-sum, with some discounting.

I teach Personal finance and retirement. Will post some stuff.

Basically:

1) the hardest part is NOT finding where to invest in. The hardest part is SAVING up enough from your current income, so that you have a significant amount to invest. I have 32 ways to save.

2) there are ways to avoid (not evade, there is a difference) taxes. E$very peso you save will COMPOUND for all the years until you retire, so avoiding what taxes you can is very important.

3) yes, there are good investments and there are bad investments. Would take several pages to explain all. But here's a tip ; you can get 8% or more per annum from hi-grade corporate bonds. From a 91-day bank certificate of deposit or T-bill you will get only about (depending on the bank) 3.5% per annum before tax , or only about 3.15% after tax - because there is a 10% withheld tax on the interest earned - at today's rates.

Meanwhile, Inflation is about 7.3%, so you LOSE (7.3%- 3.15%) = 4.15%, when you put your money into a 3.5% before tax bank certificate of deposit, or 91-day T-bill. (BUT, that is better than losing the entire 7.3% of inflation, which you would if you kept your savings in your mattress at home instead of in a bank certificate of deposit.)

4) I will just add one more thing in this posting : DIVERSIFICATION. There is such a thing as the "Investment Pyramid", which tells you into what kinds of investments you should START investing, and then move on up into other types. YOU NEVER PUT ALL YOUR EGGS IN ONE BASKET, as all those people who put their mlife savings into the Legacy group are now deeply regretting. There are mathematical ways to determine how much of your total investment portfolio should go into what kinds of investments.

Then there is the POWER OF COMPOUNDING, different types of insurance, investment vehicles for retirement, Longevity Risk, overall cash flow matching, Death and Estate Planning, other things.

Will look for some postings I made 2-3 years ago and re-post them here.

One thing for sure - if you do not want to rely on your children and relatives in your retirement - to pay for your living expenses and illness expenses and funeral expenses - if you do not want to be a mendicant when you are old - then you must take steps NOW. And it's NOT EASY. How much NET WORTH do you have now? I can show you whether it is enough for your age (in most cases, it isn't.)

Cheers.

ilocano
03-06-2009, 06:53
Thanks for the reply guys.

Definitely not going for real estate- easy to buy; hard to liquidate.

Retirement plans through insurance companies-not anymore. Lost two educational plans for my two kids to CAP.

SSS, yeah- I'm paying, but am not counting on it either.

I've been working overseas for 3 years now WITHOUT savings (attributed to reckless spending). The current crisis brought me back to my senses though, so now I'm a bit worried.

I'm so anxious on Ante's next post. Regards.

antediluvianist
03-06-2009, 08:27
Ilocano, maybe you could peruse the postings here. From a few years ago; a few numbers may have changed, but the financial principles should be the same.

http://glocktalk.com/forums/showthread.php?t=331653&highlight=antediluvianist

Allegra
03-06-2009, 10:20
Thanks for the reply guys.

Definitely not going for real estate- easy to buy; hard to liquidate.

Retirement plans through insurance companies-not anymore. Lost two educational plans for my two kids to CAP.

SSS, yeah- I'm paying, but am not counting on it either.

I've been working overseas for 3 years now WITHOUT savings (attributed to reckless spending). The current crisis brought me back to my senses though, so now I'm a bit worried.

I'm so anxious on Ante's next post. Regards.


mahirap iliquidate ang real estate kung mahal ka magbenta
Di naman pwede ibenta ng mura kung binili mo rin ng mahal
That's why I said look for the incredible bargains available now

jimbullet
03-06-2009, 13:33
How about bonds from very reputable companies?

bugoyski
03-06-2009, 18:30
Antedeluvianist,

I also want to know your recommendations. Many investments vehicles are no longer safe nowadays due to the global crisis.

Any good long-term investments possibilities? Say, for example, that I just want to preserve the value or purchasing power of my money. Any recommendations?

Allegra
03-06-2009, 19:57
Anyone know any reputable companies? Can you share?
Maybe mawala allergy ko sa other people investing my money for me

kidlat_tahimik
03-07-2009, 06:27
pinaka safe ngayon ay bumili ka ng mga government issued na treasury bills. pinaka mababa na denomination ay nasa 5thou to as high as 1million. yung interest pag nagmature na ay mas higher with regular bank time deposit. ang kagandahan ng treasury bill ay guaranteed ito ng philippine government di malulugi kagaya ng legacy.

Vault Keeper
03-07-2009, 07:10
Some banks are offering a 3 and 5 year investment for Globe Telecom and SMB...you might want to consider getting some.

Allegra
03-07-2009, 09:13
pinaka safe ngayon ay bumili ka ng mga government issued na treasury bills. pinaka mababa na denomination ay nasa 5thou to as high as 1million. yung interest pag nagmature na ay mas higher with regular bank time deposit. ang kagandahan ng treasury bill ay guaranteed ito ng philippine government di malulugi kagaya ng legacy.


what return are we talkin about here?

jimbullet
03-07-2009, 19:44
I bet Tbills are very low at the moment.

ppts799
03-08-2009, 07:48
i dont know how the rate compares to others, but i heard SDAs are very safe. 4 months ago, interest was at a Net of 4.4% but as of last month, i think net of 4%.

mikey177
03-08-2009, 17:16
Ilocano, maybe you could peruse the postings here. From a few years ago; a few numbers may have changed, but the financial principles should be the same.

http://glocktalk.com/forums/showthread.php?t=331653&highlight=antediluvianist

I really appreciate all the advice that Ante and the other BoGs offered in this thread from 2005. It got us on the right track for preparing for the future and eventual retirement. Thanks a lot, guys.

Cody Jarrett
03-08-2009, 17:20
real estate , look for bargains
I agree. With real estate prices and mortgage rates at an all-time low, now is the time for anyone who can buy to do so. Since my investment portfolio fell so badly I have to forget early retirement and return to the workplace. With a degree in Computer Science and a minor in mathematics, no one wants a fifty year old software engineer. A friend is offering to break me into the mortgage business and I'm taking him up on it.

I don't see an unemployment rate of 8.1%... I see an employment rate of 91.9%. And with all the refinancing going on his brokers are doing pretty well.

antediluvianist
03-08-2009, 18:38
I posted this in another forum (a forum for local stockmarket investors), but it may be of interest here for you investors. A guy called Wynn asked about corporate bonds (by the way, I am investing in the imminent SMB (San Miguel Brewery) bond, as it yields over 8% for a 5-year hold...I won't get the 10-year bond, that's too long for me, i would probably pre-terminate and lose some interest because of the pre-termination anyway - you guys are different - everybody is unique - I am an old guy - 63 - so i might be dead in 10 years so 5 years is enough for me.) :

"Yes, Wynn, bonds are lower risk than equities, especially under present conditions of high uncertainty in stock markets all over the world, but they yield less return too.
Risk and return are positively correlated (if one goes up , the other should go up too; if one goes down, the other should go down too.)

The above 7.8% might sound good, but remember that inflation is 7.3%. So the "real" rate is Nominal Rate = Real Rate + Inflation, or 7.8% = Real Rate + 7.3%.

The real rate (that is, the rate net of the destruction effect on the purchasing power of your money by the rate of inflation) is only 0.5%. ( That is still better than keeping your money in your mattress - in which case you would suffer ALL the negative 7.3% destructive effect of inflation) , but you aren't really getting richer by 7.8% because inflation is "stealing" 7.3% from you.)

You could consider investments that earn more than 7.8%, but are higher risk. GLO, for instance, gives a cash dividend yield of about 11%-12% at present prices, but yes there is a risk that its price will fall and you will get a capital loss. So watch the trading price range, have patience, and buy only at the low side. But there is always some risk.

Of course, stocks are only one of the many kinds of investments. How about lending money 5/6? That beats the 7.8% yield by a mile. Of course, for higher return, there is usually higher risk. I used to lend through an established 5/6er, so I got less of a return (I gave part of the 5/6 income to the 5/6er, and he handled all the interface with the borrowers/police, goons, etc.) There is renting out apartments, there is selling food, many things."

antediluvianist
03-08-2009, 19:00
By the way, on the matter of investing in real estate,

1) real estate prices (I am talking metro manila) are still going down. i wouldn't jump in right now if I were you. I am affiliated with a major property company, and we expect property values to be 10-15% lower at the end of this year;

2) as somebody posted above, real estate can be rather illiquid, and if, in the future, you need money fast, you may have a hard time selling fast, even if you drop your price;

3) there is an oversupply of condos in Makati/Rockwell etc.. Wait, accumulate a pile of cash, go around later this year and offer condo owners a low price but cash down , and you will get a good deal. Go to rockwell - say, the Joya condominium, and you will see a lot of empty condos - i know a person on one of the floors and she is the only person on that floor, the other units are vacant. Many people invested in units a couple of years ago during the building period, and intended to rent the units out when completed, but there are fewer people looking to rent now so the units are simply vacant. Make a low CASH offer later this year when property prices will be lower and the owners will be more desperate..

4) banks will probably be more willing to provide financing later this year too.

5) but investing in a property for rental income can be really good. I own an old residential building in Malate that yields good and reliable rents. There are always nurses and doctors from nearby PGH knocking on the door looking for a place to rent. In other words, LOCATION, LOCATION, LOCATION. If you pick a location where obviously there will always be renters, you will be fine. If you pick a bad location, you will be screwed.

6) During periods of high inflation, property values are a hedge against inflation, they go up. However, another effect is that when the value of the peso degrades, as our peso is doing , then the dollar or international value of your property may decline. Then again, you also have to pay proipertry taxes, and you have to fix the roof after each rainy season etc. (upkeep expenses). If you intend to be a landlord, consider ALL these expenses and advantages, and adjust the rentals you will charge accordingly. if you chosen a good LOCATION, you can raise the rent.

Allegra
03-08-2009, 19:22
Dami brokers/real estate seminar jan , I suggest you attend before investing
Or kung tamad ka , just buy a lot from ayala projects in the calabarzon
Matagal ko na gusto bumili everytime may pambili ako , tumaas nanaman and I couldnt afford it again hehe but I'm talking long term here , kasi mahirap re-sell ngayon na ang laki pa ng inventory nila.
At least , while your waiting for it to appreciate , makipag social climbing ka muna sa clubhouse

BTW , real estate is not just buy and sell ng lupa
Kasama na jan resort , motel , hotel , dorm,B&B blah blah

antediluvianist
03-08-2009, 19:26
A last post I wrote on another forum, that may be of interest to investors here :

"I used to invest in AFPSLAI (Armed Forces of the Philippines Savings and Loan Association Inc.) when it gave 21% AFTER tax (because interest earned from a deposit in AFPSLAI was, and I think still is, tax-exempt.) That's 23+% before tax, which is the number that should be compared to the small interest you get from time deposits in banks, and T-bills, because those are also subject to tax..

But that's AFPSLAI. And if the soldier dies, his insurance has been assigned to AFPSLAI too. And repayment of the amount the soldier borrowed is from salary deductions from the soldier's pay, so it's sigurado and automatic.

For an unregistered colorum in-office arrangement whose funds come from questionable sources, well, take your risk. Even if it's registered, we all know that proceeding in the law courts against bad debts in this country is horrible; you never want things to get to that point. And if the debtor has died, and you try to collect against the estate, such that it is, eh forget it.

To really appreciate how horrible things are in the Philippines, everybody should experience going to the law courts to collect a bad debt in a civil collection case. You are actually better off just paying some goon to break the guy's arm and then forget it."

ilocano
03-09-2009, 02:15
Hi Ante,

I heard from a friend that 21-23% interest from AFPSLAI is a thing of the past. She said they brought it down to 16-18% now, compounded quarterly, BUT with deposit limit of 30K (inclusive of compounded interest)- is this true?

However, they also have this regular savings account which earns 6% per annum- no deposit limit?

Can you confirm?

Regards,

ilocano
03-09-2009, 02:33
Guys, Im not a finance guy.. can you translate this for me by way of example (HSBC e-saver)

5.3% interest per annum- tax free. Interest is calculated on the daily cleared closing balance.

Say I deposit $1000 monthly, how much will I save after 12 months?

Thanks.

antediluvianist
03-09-2009, 04:14
Hi Ante,

I heard from a friend that 21-23% interest from AFPSLAI is a thing of the past. She said they brought it down to 16-18% now, compounded quarterly, BUT with deposit limit of 30K (inclusive of compounded interest)- is this true?

However, they also have this regular savings account which earns 6% per annum- no deposit limit?

Can you confirm?

Regards,

I wrote that thread (below) in 2005, Ilocano.

Certainly interest rates change over time, in response to many factors such as the rate of inflation, the desire of a government to increase or slow down economic activity, the desire of a government to protect its domestic currency or not, the degree of government spending, many factors. But you can be sure that interest rates change over time.

Right now, for instance, interest rates throughout the world are relatively low - the US and UK rates are the lowest in decades - and rates are low here too. A 91-day time deposit at BPI now will yield about 3.3% before tax , and of course even less after tax. Open a US dollar account at PNB and you will be paid only 0.6% per annum. Rates go up, and go down, as time goes by. In 2005, rates were higher.

I withdrew my investment in AFSLAI after 2005 and put the money into a property that earns rents and appreciates in value. I am not up to date on the lastest rules at AFPSLAI, but all you have to do is call them or hit their website. In any case, are you a military guy? If not, you will have to be a "rider", riding on a relative's or (be careful!) friend's ability to be an AFSLAI investor (are in active duty in the Armed Forces.)

Whatever the present AFPSLAI rates are, they would be lower than the 2005 rates, and you should inquire if the interest paid is still tax-free (I suspect it still is as AFPSLAI is still a credit cooperative) , and that makes a big difference.

Can you beat AFPSLAI's effective after-tax interest rate on any other SHORT-TERM FIXED INCOME investment vehicle? Certainly not from a SHORT-TERM T-bill or corporate bond. You would have to go LONG-term IF you can stand that, and remember you would pay a pre-termination penalty of you cash out before year 5 or 10. As I said, in my case I will invest in the imminent San Miguel Brewery 8+% (they are still finalizing the interest rate) 5-year corporate bond, and I can hold to maturity, which means it will be tax-free.



An excerpt from my posting in 2005 :
"If you or your wife belong to a Lopez Group company, you can invest in MESALA (Meralco Savings and Loan Association)and make about 15% after tax per annum. Most large companies have an internal S&L Assoc. too. And there is AFPSLAI (Armed Forces and Police Savings and Loan Association Inc.)- at the moment 18% per annum after tax. Use some soldier/policeman's quota if they aren't using it (that makes you a "rider".)

"1) at the moment I (I'm a "rider") am getting 18% not 20%. The interest rate will be adjusted by the AFPSLAI board every year or so as interest rates fluctuate. I used to be earning 21%, now it's 18%. ....

2) A BIG THING : this AFPSLAI rate - as I said I'm getting 18% right now - is TAX FREE. This is a BIG advantage over putting your money into government T-bills or bank CDs. ...

3) You must also consider RISK. The more Risk, the more Return should be demanded by an investor. Risk and Return are directly related.
(The longer the "tenor" (time-to-maturity) of an instrument, generally speaking the more risk, and so the higher the interest rate the instrument should pay.)

Is the T-bill Risk-free? Practically speaking, yes. Unless the government of the Philippines collapses. Is an investment in AFPSLAI also Risk-free? Well, there is General Garcia and those other Generals who have been shown to be thieves. And the RSBS certainly is bankrupt. But the AFPSLAI seems to be OK. For one thing there are guarantors for each loan (but that's not iron-clad ). I prefer to count on the fact that the soldiers who borrow from AFPSLAI pay back by monthly salary deductions (it's not necessary to run after them, as it sometimes is for credit card borrowers.) Also, the life insurance of the soldier will go to paying off any loan he still has outstanding with AFPSLAI before his beneficiaries get that insurance money (if the soldier-borrower is killed in action or otherwise dies.) So, I consider the risk of lending to AFPSLAI to be quite low, comparable to the sovereign risk of the government of the Philippines' defaulting on a T-bill. (If the risk of AFPSLAI were higher than the risk of putting your money in a T-bill, you would have to demand an even higher rate from AFPSLAI. Same principle as when Fitch/Moody's etc. thinks there is higher risk in Phil. government securites and "downgrades" the Philippines's "credit rating", which means the interest rate that the Philippines must pay on its sovereign debt goes up.

4) Philippine soldiers work on this principal : "if I can borrow more money now, I will, and never mind how much interest I have to pay". So these guys are happy to borrow up to the hilt - they borrow the maximum that their salaries will cover. Then
that means they hardly get any current monthly salary at all as much of it - and their salaries are small to begin with - immediately goes to paying off what they have borrowed from AFPSLAI. So, that's one reason why soldiers and policemen engage in "income-producing" activities like extorting money from trucks and motorists at checkpoints, selling bullets, taking bribes from houses of prostitution etc..

5) I have money in AFPSLAI, but I am not in the military. I use the permitted P2million per person quota of some of these guys. I give the guys 3% just for the use of their quotas - these are guys who don't use their full quotas because they can't, their salaries are too low to qualify for that much of a loan....
So I'm what they call a "rider". There are many, many "riders". Because the AFPSLAI return is so good, at essentially no risk. In fact when the "rebels" and "returnee" Muslims etc. laid down their arms and were absorbed into the AFP, getting into AFPSLAI was one of carrots dangled to them."
- above was wtitten in 2005

antediluvianist
03-09-2009, 05:02
"5.3% interest per annum- tax free. Interest is calculated on the daily cleared closing balance."

You should clarify if the interest will be "compounded daily". Sounds like it, from your statement above.

Interest can be compounded annually, quarterly, monthly, weekly, daily, even continuously. There is a mathematical formula, and I don't think it's possible to explain that in a few words. Let's just say that the more often interest is compounded, the better for the depositor. For instance, compounded daily will result in a higher effective annual interest rate for the depositor than if the compounding is , say quarterly.

As for being tax-free, there are certain requirements that the government imposes before interest can be tax-free (hey, the government does not want to lose that tax on the interest). I would have to know more about this HSBC vehicle to verify that the requirements are met, but HSBC is a world-class bank so I suppose they know all about the requirements. What is the specific name of this HSBC financial product?
_________
Ah* I just looked up "HSBC e-Saver" on Google. Seems to pay "6% gross", in other words 6% before tax. . So what they are telling you is the after-tax interest rate is 5.3%. well if that is the correct interpretation of what I see online, then it's just an after-tax rate, which is already net of tax so I suppose it could be called tax-free but it's really just after-tax from a higher gross.

Astra22
03-09-2009, 08:28
Keep the ideas coming sirs, I'm learning a lot.

Sir Ante,
what do you think about the BlueChips Cos. particularly Ayala group and SM Group shares? It seems like the prices are almost at the levels of the Asian Financial crisis. Very tempting at these prices, but we really don't know if these levels are the bottom already. I don't think the Ayala's and the Sy's will let their financial deteriorate. What's your 10cents sir? TIA.

antediluvianist
03-09-2009, 15:35
Well, Astra, nobody KNOWS what the stockmarket - the local one or the New York ones - will do. Our local stockmarket (the PSE) tends to follow what the NY stockmarkets (NYSE, and the NASDAQ is important too) do.

Most economists and finance experts think that the NYSE and NASDAQ will fall some more. The depression has not hit bottom yet; there is worse news to come (for instance, unemployment has not hit its worst level yet in the US).

So, , for me, I have started slowly and SELECTIVELY buying only those blue chips that PAY GOOD DIVIDENDS. Yesterday I bought some PLTL (Piltel) because it pays about 11%-12% per annum. So even if it drops somewhat, it will still yield me a return high enough to cover the drop. (The Telecom companies in the Phil. Stock Exchange in general pay the best cash dividends - Globe (GLO), PLDT (TEL), and Piltel (PLTL). )

For the other blue chips, I am waiting.

But, as I said, nobody KNOWS for sure how stockmarket prices will go. It is quite good enough to be right more often than wrong, and to CUT LOSSES FAST. "Cut losses and let the winners ride" is the phrase.

atmarcella
03-10-2009, 02:08
incredible bargains

available sya sa real estate BUT not by buying. by lending. you lend money the collateral is the real estate and when they dont pay you foreclose. as of the moment i am holding a title worth 350k but i only lent 150k for it, ang naka sulat sa likod ng title she owes me 195k after 6mos., so that 5% monthly.

the secret to deals like this is that you have to have a lawyer who knows their way around LRA or the land registration authority. kasi there have been many cases where ang titulo pala "many times" na naka sangla or fake!!!

cznayr
03-10-2009, 09:04
"5.3% interest per annum- tax free. Interest is calculated on the daily cleared closing balance."


As for being tax-free, there are certain requirements that the government imposes before interest can be tax-free (hey, the government does not want to lose that tax on the interest). I would have to know more about this HSBC vehicle to verify that the requirements are met, but HSBC is a world-class bank so I suppose they know all about the requirements. What is the specific name of this HSBC financial product?
_________
Ah* I just looked up "HSBC e-Saver" on Google. Seems to pay "6% gross", in other words 6% before tax. . So what they are telling you is the after-tax interest rate is 5.3%. well if that is the correct interpretation of what I see online, then it's just an after-tax rate, which is already net of tax so I suppose it could be called tax-free but it's really just after-tax from a higher gross.

sir, the e-saver is offered in dubai. No idea about about the 6% but clearly they said it's 5.3%. So it is earning 5.3% per annum

ilocano
03-10-2009, 09:24
sir, the e-saver is offered in dubai. No idea about about the 6% but clearly they said it's 5.3%. So it is earning 5.3% per annum

Yes it is in Dubai (where are I am currently based). I think I need to pay them a visit and inquire on how they compute the interest. My initial understanding, based from the wordings in their website, is that interest is computed and compounded daily. If it is, then I guess its a good deal.

Thanks Ante for your posts. Very helpful indeed.

Allegra
03-10-2009, 17:09
available sya sa real estate BUT not by buying. by lending. you lend money the collateral is the real estate and when they dont pay you foreclose. as of the moment i am holding a title worth 350k but i only lent 150k for it, ang naka sulat sa likod ng title she owes me 195k after 6mos., so that 5% monthly.

the secret to deals like this is that you have to have a lawyer who knows their way around LRA or the land registration authority. kasi there have been many cases where ang titulo pala "many times" na naka sangla or fake!!!


mejo matibay kailangan sikmura sa ganyan :) I couldnt
Lalo kung residential tapos you have to throw the family out of their home

You can find bargains sa mga foreclosed properties sa banks , o kaya mga distressed na properties
Or just wave a check in front of the owners face , usually ibabagsak nya presyo nya

atmarcella
03-11-2009, 02:05
well... naka experience nako na bahay tlaga na tinitirahan ang collateral, kung ganun ang pinaka mataas na pahiram ko is 15% the value of the house, the reason behind is para cgurado na bayaran ka nila talaga. the value of that house was more than 10mil, in fact tintawaran na ng 5mil, ayaw pa nila benta, humiram sila ng 750k at 4% monthly, that loan lasted 2years, eventually nag benta din sila... ako naka ngiti hehe

cznayr
03-11-2009, 10:37
Yes it is in Dubai (where are I am currently based). I think I need to pay them a visit and inquire on how they compute the interest. My initial understanding, based from the wordings in their website, is that interest is computed and compounded daily. If it is, then I guess its a good deal.

Thanks Ante for your posts. Very helpful indeed.

Same here. I tried it out already. Per month and pagcredit ng interest.

ilocano
03-12-2009, 06:59
Same here. I tried it out already. Per month and pagcredit ng interest.

is it compounded daily?

cznayr
03-12-2009, 08:53
is it compounded daily?

No. 22K earns abot 90 AED per month.. so definitely not compounded daily. Lugi sila pag ganun...

antediluvianist
03-17-2009, 04:38
Hello, guys.

I) TA

In my last lecture, I mentioned the website "tsupitero.com".

Below are three useful webpages in tsupitero.com.

"Tsupitero" is a real person, a Pinoy who trades on the basis of "Technical Analysis" (also called "TA"). Maybe you would like to meet him in a future lecture.

Technical Analysis is trading on the basis of reading CHARTS of the daily movements, and buy-sell volumes, of stocks. The major assumptions behind TA are :

1) that the movements of a stock are the end result of ALL information about the stock/all rumours/all everything, so that it is enough to just look at the chart of how that stock moves;

2) TA people profess to be able to tell you how the stock will move in the future based on various formations/squiggles that the chart of the stock makes ("ascending triangle", "descending triangle", "head and shoulders", many other formations.) There is also a Japanese kind of TA ("candlesticks") that looks for poetic formations like the "Falling Star";


3) TA people think that these formations repeat through time, so when you see a certain formation/squiggle in a chart, well, they think the stock will then tend to move in a certain way in the near-term. TA is supposedly accurate in the SHORT run.

Here are three useful webpages, based on TA, for getting advice about what stocks to invest in, or to sell if you already have them, in the Philippine stockmarket :

http://tsupitero.com/bluechips.htm - blue chips (the bigger, more established and more reputable stocks)

http://tsupitero.com/selection.htm - 2nd and 3rd liners (less established stocks)

http://tsupitero.com/phisixweekly.htm - weekly chart of the PSE as a whole
__________________________________

II) FA

The other major way of approaching what a stock will do is to look at the "Fundamentals" : economic factors that exist in the real world - like a forecast of the company's earnings per share, dividend per share, market share versus competitiors, how the company's products are doing, what new products are being developed for the future, how much debt the company has and its coverage of interest charges, the quality of the company's management, political developments that will affect the company, etc. - various REAL economic factors (TA people don't bother with that, they just look for formations in the charts because they assume that all information about fundamentals is already in the squiggles in the charts.)

People who look at fundamentals believe in "Fundamental Analysis" or "FA".

Fundamental Analysis is more LONG-term : you look at the basic, long-term economic factors of a company. There are many possible factors (that affect a company) involved in FA, and some factors are unique to each company. You have to do your homework, and if you don't have the time or interest, then you are better off investing in a Mutual Fund, so that somebody else will do it for you (in the next session I will talk about local Mutual Funds.)

To keep up-to-date on investors' news about various economic and political fundamental factors that affect the prices of various stocks, go to

http://www.financemanila.net/forum/viewforum.php?f=1&sid=454cba0e067c78e240a0345db14ce025

I suggest you look at the thread about "PLTL", because that has some hot news in it (an imminent juicy event is coming up involving this company's stock (PLTL, or Piltel, is the telecommunications company behind "Talk-n-Text", the low-end pang masa celfone system.)

****update: Well, today (Monday 16 March), PLTL jumped to a high of P8.60 from last Friday's close of P7.40, but the volatility in PLTL, and the related stock called FPH, isn't over yet, and you can see some juicy comments by looking at the PLTL and FPH threads in the above Forum (go to the website).

Any significant stockmarket in the world is covered by many official sites, and by unofficial fora and blogs run by investors. The website indicated above ("Finance Manila") is the best investors' wesbsite for the Philippine stockmarket.

Note : this year - 2009 - is an excellent buying opportunity. But you have to be patient- stockprices will go down further, with bear rallies, before they go up in a sustained way, so estimate the bottoms for specific stocks well; and stay away from garbage stocks, pick the blue chips. See my comments below regarding the high cash dividend yields - better than money market and even better than AAA corporate bonds - of some blue chip stocks, now that they are selling for such low prices. ***end of update

___________

My advice to you : EACH of the two camps above (TA and FA) has part of the truth. The truth is that there are long-term economic factors which are important in evaluating stocks as investments, and also there are short-term movements of a stock that TA analysis has a better chance of detecting, and of predicting imminent movements therefrom.

Personally I first pick stocks on a Fundamental basis, then decide WHEN to buy or sell in the short term based on TA.

Since I am at this time an oldish guy in semi-retirement, I tend to put a lot of weight on a company's cash dividend yield (in other words, the CURRENT cash income it gives investors).

(You, on the other hand, are relatively younger than I , and you can put more weight on the expected future capital gain of a stock - the future increase in the market price of its stock.)

(A fast-growing company tends to have a low dividend payout since it needs that cash to finance its growth; but its stock price tends to grow faster than a big dividend-payer because all that cash invested internally, rather than disbursed in dividends, tends to go into company projects that increase the company's bottom line and therefore its earnings-per-share. A fast GROWTH-rate in earnings-per-share ("E.P.S.")supports a high price-earnings multiple (the famous "P-EMultiple"), and therefore a high market price for the company's stock.)

Anyway, for an oldish investor like me, CURRENT income is important (since I need that income in retirement and I better get cash from a stock SOON because I cannot wait for the future because in the future I will be dead) . So I value a high CASH DIVIDEND YIELD (cash dividend/market price of the stock.)

The table in the website below indicates the cash dividend yields of certain stocks (the best dividend-payers) in the Philippine Stock Exchange. Most stock exchanges in the world publish this information, or stockbrokers provide it in their newsletters. (With interest rates now very low all over the world, including in the Philippines, it's not difficult to decide to put one's money into reliable blue-chip stocks that pay a good cash dividend yield, instead of into bank Certificates of Deposit, which pay peanuts . Or, there are also high-yielding corporate bonds, like the one imminently coming out from San Miguel Brewery (SMB) which will yield about 8+% per annum for a 5-year tenor. Investment-grade AAA or AA companies right now pay two or even three times as much of an interest rate as a bank CD pays. )

To see the highest dividend-paying local stocks in 2008-2007-2006 (highest cash dividend yield ), go to :

http://www.pse.com.ph/html/NewsRoom/memos/2009/MEMO_2009-0133.pdf


( Remember that not all the companies listed there are blue chips. Go for RELIABILITY of cash dividend yield [see the companies' whole 2008-2007-2006 record of paying dividends. ] ) But also note that you can get a much better return from the cash dividends of some of these blue chip stocks than from putting your money in bank certificates of deposits, or T-Bills. But there is higher risk, of course (Risk and Return are positively correlated, as we discussed : when one- Risk or Return - goes up, the other should logically go up, with a few exceptions; and when one goes down, the other should logically go down, with a few exceptions) . That's why I recommend sticking to the large , reliable blue chips (which are, relatively speaking, not too risky) if you need current cash dividend income.

Remember we discussed that in Finance, "Risk" means "variability of return", which as we discussed, can be measured by the standard deviation of a stock's returns about the mean expected return [the smaller the standard deviation, the less the Risk because the less will be the dispersion about the expected return]. .And you can also use a stock's "Beta" , which, as we explained, is a measure of how much a particular stock moves in response to a move in the overall stockmarket : high-Beta stocks fluctuate more than low-Beta stocks to any "systemic" stimulus (any shock to the stockmarket as a whole). Next lecture we will get into how to construct a portfolio of financial investments - not outright gambles like the Lotto - which will give you a good return for a reasonable amount of risk .

Cheers. See you in a few weeks for the next lecture.


--
______________________________
"The dollar is the weakest currency except for all the others. As much as we in the US worry about the fall of the dollar, it could rise over the coming year. " - John Mauldin

Astra22
03-17-2009, 09:35
good reading, Sir Ante! amazing!

atmarcella
03-19-2009, 01:52
investing in stocks is like investing in this country. i just dont like how leaders of this country are chosen. ika nga eh "garbage in garbage out". majority of voters cant even read or write. good luck!

Allegra
03-19-2009, 11:28
investing in stocks is like investing in this country. i just dont like how leaders of this country are chosen. ika nga eh "garbage in garbage out". majority of voters cant even read or write. good luck!

Bigla ako napaisip dun a
Panu ba naboto ang no read no write?

Marunong na nga ako bumasa hindi ko pa rin makita presinto ko

atmarcella
03-19-2009, 23:52
the popular vote is not always the correct vote.

antediluvianist
03-22-2009, 21:19
Euro Currency of Choice as Fed Easing Devalues Dollar

http://www.bloomberg.com/apps/news?pid=20602081&sid=aCo5hMqZfb9o&refer=benchmark_currency_rates

antediluvianist
11-01-2009, 18:43
A shortage is beginning in gas stations, mainly those outside of Metro Manila, or inside Metro Manila but small.

The limited supply of petroleum products is being prioritized to the major gas stations in Metro Manila.

I suggest you fill up as insurance against supply problems in the immediate/near future.

antediluvianist
11-01-2009, 19:24
Going back to "Retirement" matters, I presume you guys know that the local PERA bill did pass into Law. Just google it.

You can get some tax breaks if you invest in qualified securities. Helps you to build up your personal retirement portfolio, without haveing to count on your company, relatives, etc.

It's a step in the right direction, and I hope they amplify it in the future (for instance they should allow more than P100,000 additions per year). But, it's a step in the right direction.

atmarcella
11-01-2009, 19:37
Bigla ako napaisip dun a
Panu ba naboto ang no read no write?

Marunong na nga ako bumasa hindi ko pa rin makita presinto ko



A,

sinusundo hatid sila, me nagtuturo sa kanila kung saan magboto, anong isusulat etc., meron sila guidance from politicos/leaders/magnanakaw/mga WH etc.


hehehe...

atmarcella
11-01-2009, 19:39
all for a few cents... pesos actually but if you convert our money into foreign currency it becomes centavos hehe.

PMMA97
11-01-2009, 22:00
A shortage is beginning in gas stations, mainly those outside of Metro Manila, or inside Metro Manila but small.

The limited supply of petroleum products is being prioritized to the major gas stations in Metro Manila.

I suggest you fill up as insurance against supply problems in the immediate/near future.

Is this shortage real or just made up by oil companies with the help of some sectors in the government?

jimbullet
11-02-2009, 00:48
Is this shortage real or just made up by oil companies with the help of some sectors in the government?

I wouldnt think that this could be all true. The big three still have their refining operations in the Phils dont they? If so, they need to feed those plants maximising economies of scale and return on investments.

Meanwhile, the new oil players as they call themselves would have to trade. It would be a question of timing of when they have all ordered refined fuel.

antediluvianist
11-02-2009, 01:31
http://www.mb.com.ph/articles/227457/price-control-flipping-oil-industry-and-public-upside-down

jimbullet
11-02-2009, 02:22
I feel that the government threat of taking over oil firm facilities is ridiculous.

iancg1
11-02-2009, 02:27
For a low-risk savings, which is better, t-bill or time deposit?

jimbullet
11-02-2009, 02:35
For a low-risk savings, which is better, t-bill or time deposit?

It depends on which Financial Institution the time deposit is with. If its one of the top rated banks, then the risk is relatively comparable with a t bill and therefore it would be a matter of tenure and pricing to that would suit you.

jimbullet
11-02-2009, 02:48
I wrote that thread (below) in 2005, Ilocano.

Certainly interest rates change over time, in response to many factors such as the rate of inflation, the desire of a government to increase or slow down economic activity, the desire of a government to protect its domestic currency or not, the degree of government spending, many factors. But you can be sure that interest rates change over time.

Right now, for instance, interest rates throughout the world are relatively low - the US and UK rates are the lowest in decades - and rates are low here too. A 91-day time deposit at BPI now will yield about 3.3% before tax , and of course even less after tax. Open a US dollar account at PNB and you will be paid only 0.6% per annum. Rates go up, and go down, as time goes by. In 2005, rates were higher.

I withdrew my investment in AFSLAI after 2005 and put the money into a property that earns rents and appreciates in value. I am not up to date on the lastest rules at AFPSLAI, but all you have to do is call them or hit their website. In any case, are you a military guy? If not, you will have to be a "rider", riding on a relative's or (be careful!) friend's ability to be an AFSLAI investor (are in active duty in the Armed Forces.)

Whatever the present AFPSLAI rates are, they would be lower than the 2005 rates, and you should inquire if the interest paid is still tax-free (I suspect it still is as AFPSLAI is still a credit cooperative) , and that makes a big difference.

Can you beat AFPSLAI's effective after-tax interest rate on any other SHORT-TERM FIXED INCOME investment vehicle? Certainly not from a SHORT-TERM T-bill or corporate bond. You would have to go LONG-term IF you can stand that, and remember you would pay a pre-termination penalty of you cash out before year 5 or 10. As I said, in my case I will invest in the imminent San Miguel Brewery 8+% (they are still finalizing the interest rate) 5-year corporate bond, and I can hold to maturity, which means it will be tax-free.



An excerpt from my posting in 2005 :
"If you or your wife belong to a Lopez Group company, you can invest in MESALA (Meralco Savings and Loan Association)and make about 15% after tax per annum. Most large companies have an internal S&L Assoc. too. And there is AFPSLAI (Armed Forces and Police Savings and Loan Association Inc.)- at the moment 18% per annum after tax. Use some soldier/policeman's quota if they aren't using it (that makes you a "rider".)

"1) at the moment I (I'm a "rider") am getting 18% not 20%. The interest rate will be adjusted by the AFPSLAI board every year or so as interest rates fluctuate. I used to be earning 21%, now it's 18%. ....

2) A BIG THING : this AFPSLAI rate - as I said I'm getting 18% right now - is TAX FREE. This is a BIG advantage over putting your money into government T-bills or bank CDs. ...

3) You must also consider RISK. The more Risk, the more Return should be demanded by an investor. Risk and Return are directly related.
(The longer the "tenor" (time-to-maturity) of an instrument, generally speaking the more risk, and so the higher the interest rate the instrument should pay.)

Is the T-bill Risk-free? Practically speaking, yes. Unless the government of the Philippines collapses. Is an investment in AFPSLAI also Risk-free? Well, there is General Garcia and those other Generals who have been shown to be thieves. And the RSBS certainly is bankrupt. But the AFPSLAI seems to be OK. For one thing there are guarantors for each loan (but that's not iron-clad ). I prefer to count on the fact that the soldiers who borrow from AFPSLAI pay back by monthly salary deductions (it's not necessary to run after them, as it sometimes is for credit card borrowers.) Also, the life insurance of the soldier will go to paying off any loan he still has outstanding with AFPSLAI before his beneficiaries get that insurance money (if the soldier-borrower is killed in action or otherwise dies.) So, I consider the risk of lending to AFPSLAI to be quite low, comparable to the sovereign risk of the government of the Philippines' defaulting on a T-bill. (If the risk of AFPSLAI were higher than the risk of putting your money in a T-bill, you would have to demand an even higher rate from AFPSLAI. Same principle as when Fitch/Moody's etc. thinks there is higher risk in Phil. government securites and "downgrades" the Philippines's "credit rating", which means the interest rate that the Philippines must pay on its sovereign debt goes up.

4) Philippine soldiers work on this principal : "if I can borrow more money now, I will, and never mind how much interest I have to pay". So these guys are happy to borrow up to the hilt - they borrow the maximum that their salaries will cover. Then
that means they hardly get any current monthly salary at all as much of it - and their salaries are small to begin with - immediately goes to paying off what they have borrowed from AFPSLAI. So, that's one reason why soldiers and policemen engage in "income-producing" activities like extorting money from trucks and motorists at checkpoints, selling bullets, taking bribes from houses of prostitution etc..

5) I have money in AFPSLAI, but I am not in the military. I use the permitted P2million per person quota of some of these guys. I give the guys 3% just for the use of their quotas - these are guys who don't use their full quotas because they can't, their salaries are too low to qualify for that much of a loan....
So I'm what they call a "rider". There are many, many "riders". Because the AFPSLAI return is so good, at essentially no risk. In fact when the "rebels" and "returnee" Muslims etc. laid down their arms and were absorbed into the AFP, getting into AFPSLAI was one of carrots dangled to them."
- above was wtitten in 2005

Rates in the UK is expected to remain low as they have been one of those hardest hit by the global financial turmoil led by the subprime inthe US. Having said that, rates down under are doing 5% gross for an ordinary time deposit.

antediluvianist
11-02-2009, 03:05
Glockers in the Philippines, the AFPSLAI instrument, IF you can get into it and to the extent that you can get into it (there are limits) , is the best Risk-Return deal in town.

AFPSLAI at present pays about 18% per annum now AFTER TAX, which is equivalent to 18%/0.8 after the 20% tax, so 22.5% gross. You should compare that 22.5% per annum to whatever interest rate you get from a T-bill, a bond, any fixed-income instrument.
-
And it is nearly risk-free; the repayment is by salary deduction, and a cop/soldier's insurance benefits go to pay his loan, which anyway is only a fraction of his take-home pay.

So, anybody out there who is a soldier or cop, or a child/spouse of one, top-up whatever is your allowed quota.

Remember also that the inflation rate in the Philippines , and in most places right NOW (until inflation hits the dollar), is quite low. About 3% or less. So that AFPSLAI 18% minus 3% inflation in the Philippines means you still get a REAL interest rate of 15% per annum after tax, which for a low-risk investment, is excellent.

IF you can get into this AFPSLAI instrument.

Clusterbomb
11-03-2009, 00:11
Nice read!

As for my retirement, I have written off ever getting anything from GSIS. Its in a whole lot worse situation than SSS. The office deducts almost Php3K from my salary every month but I don't know where it goes. Parang pumumpunta lang sa black hole. Kung hindi lang madated by law, I don't think any government employee will still continue contributing.

Their records are so messed up that I don't think they'll be able to do anything about it long even after Winston Garcia is out. So kawawa yung marami pang magre-retire in the years to come.

That propaganda they dish out about IBM quite deceptive. So they sued IBM, fine. What they don't say is that by suing IBM, all the more will IBM NOT lift a finger to solve the database mess.

Why would it? Lalaban na lang ang IBM. After all, IBM could win in court. Kung matalo eh di saka lang sya mao-obliga humanap ng solusyon. But until then, what will our govt retirees live on? Ang tagal pa naman ng habalahan dito sa Pinas. And definitely by the time ma-desisyunan yan, wala na rin si Winston sa GSIS kaya di na rin nya problema yan.

jimbullet
11-03-2009, 01:35
I suppose its up to the member to prove that he/she is a contributing member all this time.

antediluvianist
11-05-2009, 11:00
Yes, things are really bad for GSIS members. Bad data base plus long delays.

SSS is OK lang on retirement benefits. You can get 18 months upfront in cash upon retirement.

The SSS monthly retirement benefit for me is about P12,450 at this time. My wife gets about P10,500. Well, everything helps.