Philam Life executive shares views on an investor's outlook

CEBU, Philippines - “Investment is not all about making more money. There is no best investment. Create a diversified portfolio that suits your individual situation. Maintain it and manage it all times.”

This according to Philippine American Life and  General  Insurance Company (Philam Life) Chief Executive Officer and President Rex Mendoza during the Money Summit and Wealth Expo held last August 2 and 3 at the Waterfront Cebu City Hotel and Casino.

In his presentation dubbed as “Investor’s Mindset”, he pointed out the psychological side of investors and usual mentality in earning money.

He said that people tend to connect current events as a reference point for decision whether it may be relevant or not.

“You need something to anchor on. That’s the problem. Read yourself,” he continued.

He said that such attitude explains the aggressive nature of people to bull markets, pessimism and conservatism in bear markets. 

Mendoza further cited that the loss-of-aversion attitude is the reason people hold on losing stocks longer than winning stocks.

He noted that studies show that stocks sold outperform those held by at least 4% within the next 12 months.

“Great opportunities happen when people are hiding, when people are running away. Bad investments don’t count unless you sell them,” he added.

He cited that research has proven that most confident investors or heavy traders posted results far below less-sure investors.

He said that arrogance and insecurity lead people to be reluctant to admit how little they know while without full grasp of what they are doing.

He then recommended investing in a huge valuable company in which an investor can be with for a long term.

“I want people to get into high-risk investment with open eyes knowing how to maneuver. There’s nothing wrong to invest in high-risk but be sure you don’t get burned completely. One mistake can give you a longer timeline to recover from, so be careful,” Mendoza stated.

He further recommended an investor to get a financial advisor whose psychological decisions are not biased and similar with the former.

He also urged investors to trade more often, forgetting how much they paid for a bond or a stock.

He said that one should know his investment by the risk, appetite and financial position, citing that the fundamental rules of financial planning remain unbeatable.

 He noted that yield is not always the priority but asset-liability maturity and discipline are.

“We can’t stop being human investors. We are. But we can have a better mindset and perspective.

Discipline is growing our own portfolio and growing our wealth. The biggest money is made on a long-term investment and not on short-term trading,” he concluded. — Grace Melanie I. Lacamiento

On the other hand, Mendoza described Cebuanos as more attuned at their financial track and earnings and more engaging than those based in Manila.

The financial expo is part of the company’s drive to spread financial literacy and prosperity among Filipinos.

As part of its mission, Philam Life conducts wealth management forums to various market segments nationwide such as Overseas Filipino Workers, affluent market, entrepreneurs and professionals. — (FREEMAN)