Managing risks and expectations when investing

MANILA, Philippines — Financial investing is an important activity in planning for your future and that of your loved ones. It also comes with corresponding rewards and risks. With the global market experiencing a lot of volatility, it is normal to sometimes feel uneasy about your investments.

During uncertain times, what would be the prudent course of action when it comes to your investments? History shows that when individuals invest and remain invested, they are more likely to reap the benefits and positive returns in the long run.

AXA Philippines Chief Investment Officer Anthony Garces shares that “When deciding when to invest, any day is a good day. What is more important is the time you are invested in the market. The longer and earlier you are invested, the better.”

He also shared some reminders on how to manage our investments – and ourselves – amid volatility:

1. Keep a calm mindset

First and foremost, it is important to stay calm amid market fluctuations to avoid making hasty and emotional decisions that can further harm your investment. To alleviate some of your worries, know the facts and review the details of your investments.

For example, if you have an insurance policy with an investment component known as variable unit-linked insurance or VUL, there are times when the investment fund attached to your policy may not be performing well due to soft market conditions.

However, the insurance protection benefit usually remains intact. This means that your insurance coverage is not diminished due to market volatility, which helps keep you protected. A financial advisor can play a very important role in helping you understand the details of your policies and investments.

Whenever in doubt, initiate a discussion with your financial advisor. Markets are very cyclical and financial advisors have years of experience monitoring the trends, making them able to provide more informed guidance.

“Our advice is all backed by the market trends we’ve seen in the past and the current environment that we closely monitor. Every client has their own needs and goals and the expertise we’ve spent years building allows us to provide advice that fits best with our clients,” shared Garces.

2. Do your homework

Aside from keeping calm, being knowledgeable about your investments can help you stay objective and help you prepare for any scenario. You can do your own research on the different investment instruments available to you, including the pros and cons of each. Joining groups or forums where healthy discussions between fellow investors can also help you make informed and calculated decisions.

Before investing, be sure you have read and understood the risks of the investment instrument as well as the market. In times of uncertainty, consult with investment professionals and financial advisors who can provide expert advice that is based on current market conditions and years of experience.

A trusted investment partner will also help you keep up to date with market trends in order for you to make more informed decisions.

“In AXA Philippines, we make sure our advisors conduct policy reviews with their clients and keep them updated on what’s happening in the market. Furthermore, we also make additional steps that will validate the understanding of the clients on the product they bought,” shared Garces.

3. See everything as opportunities

The most common headache that investors experience is market decline. While it may seem daunting, market declines can also be advantageous. It not only provides you with a good buying opportunity due to lower prices, but it also allows you to practice cost averaging.

This is when one commits to invest a fixed amount of money to the market regardless of fluctuations, which helps build discipline.  “As we always say, buy when the market is low and sell when it is high,” said Garces.

4. Have a strategy in place

There is no one size fits all investment strategy for everyone. According to Garces, your investment of choice must always match your risk tolerance. This is crucial, as it may affect the decisions you make along the way.

This is also where you can base your investment strategy, ideally with the help of an investment expert or financial advisor. This will also take into consideration your investment timeline, goals, age and portfolio size.

Another important strategy is diversifying your portfolio, in case you haven’t yet. This is a key step in managing risks, as it helps insulate your investment from sudden changes in the market. As the saying goes, don’t put all your eggs in one basket.

When it comes to investing, it is always recommended to have an expert on your side that will help you navigate the ever-changing market.

“Always get a trusted partner when it comes to investing to ensure that your hard-earned money is handled well. We always think of what is best for our clients and this means providing guidance every step of the way and an investment strategy that is customized to their needs and goals,” said Garces.

For more information on VUL and other investment plans, consult with an AXA financial advisor by visiting axa.com.ph/appointments.