Update on my Unit Investment Trust Fund

Only last month my investment was Php30,000 deficit. But the net asset value started going up since thursday last week and now I only have Php934 deficit. Thats 29k gain!

I guess this is still a Greespan effect hehe... i said "guess" since i really don't know much about Greenspan, all i know is that he once served the U.S. Federal Reserve.. and when he talk, people listen then the world markets move. That's how powerful the U.S. economy is. Perhaps people should stop thinking the economy is getting better or the peso is getting stronger much because of the President. And the President should stop claiming. Being a capitalist and open market, the Philippines most of the time just follows global and regional trends. Well i am not an economist... but i trust my opinion.

Gambling on Mutual Funds (UITF)

A MUTUAL FUND is a pool of assets managed by an investment company engaged in buying and selling securities on a regular basis - commonly banks or other financial services firms. These banks/firms have team of financial analyst/consultants who act as brokers in buying and selling stocks or other marketable securities in behalf of the fund. The "FUND" of course is from various investors/depositors who gets a certificate of unit of investment based on the Net Asset Value (NAV) per unit of the fund as of investment date. The NAV per unit is based on fund performance and on the stock market in general. The fund managers decide on which security and when to invest.

So, if today you invested in a mutual fund, your share of that fund will be computed simply as follows: Assuming the value of Total Fund today is Php90, you invested Php10 making the Total Fund Php100. Say the NAV today is Php5/unit. So, as of investment date, the fund has 20 units of investment and you own 10% or 2 units. If next month the stock market went up, that will surely drive the NAV up! Say it went up to Php10/unit, you now have Php20 from Php10 in just one month. In the same way, you can totally loose your money if the stock market plunged to its lowest. And these investments are not covered by PDIC.

This explains the financial wealth of stock brokers/ analysts/ consultants. They manage funds, not their own money, and get big commissions from big time gainers. They understand the market and can read and make good decisions out of market indicators.

I actually tried investing and lost Php 30,ooo as of today. Its now 3 months old. What i did not know when i put the investment was that the Philippine stock market is reaching its record high (in June 2007)! Which only means i will only realize gain when the stock market will reach a new record high. Tsk tsk. Gambling.