Portfolio Management - a collection of financial investments like stocks, bonds,
commodities, cash, and cash equivalents.
- The art and science of selecting and overseeing a group of
investments that meet the long-term financial objectives and
risk tolerance of a client, a company, or an institution.
TYPES OF PORTFOLIO MANAGEMENT
o Active portfolio management
Involves attempting to beat the performance of an index by actively
buying and selling individual stocks and other assets
o Passive portfolio management
A set-it-and-forget-it long-term strategy
Commonly referred to as indexing or index investing
o Discretionary portfolio management
A form of investment management in which buy and sell decisions are
made by a portfolio manager for the client’s account
o Non-discretionary portfolio management
A form of investment management in which buy and sell decisions are
made by the client
KEY ELEMENTS OF PORTFOLIO MANAGEMENT
o Asset allocation
o Diversification
o Rebalancing
STEPS OF PORTFOLIO MANAGEMENT
o Setting goals
Establishing investment objectives centers on identifying the investor’s
risk-return profile
o Selection of back-up assets
Identifying alternative assets that may be included in the portfolio to
distribute risk and limit loss
o Developing strategy
Two approaches
Active portfolio strategy
Passive portfolio strategy
o Analyzing the security
Security analysis aids in understanding the type and amount of risk
connected with a specific security in the market
o Acting according to plans
When the securities for investment have been chosen, the portfolio plan is
put into action.
o Portfolio modification
According to market conditions, a portfolio manager must continuously
evaluate and review scripts
o Assessing returns
The performance of the portfolio is assessed over the stipulated period.
5 PILLARS OF BUILDING WEALTH
o Health care
o Protection
o Debt Management
5C’s of credit
1. Character
2. Capacity
3. Capital
4. Collateral
5. Conditions
o Emergency fund
o Investment
What is investing?
Investing - a process of buying assets that increase in value over time, with a goal of
generating income or selling for profit.
SAVING INVESTING
Be liquid Earn Returns
Meet Specific goals Build Wealth
Why is the interest rate in the traditional banks and digital banks are different?
- Traditional banks have more operating expenses
- Digital banks have less operating expenses
o Some digital banks in the Philippines
CIMB
Offers:
o 2.5% interest per annum
o No minimum opening and
maintaining balance
o Zero annual fee
o With debit card for fast plus
account
o Insured by PDIC up to 500,000
ING
TONIK
THINGS TO CONSIDER BEFORE INVESTING
o Affordability
o Financial Goal
o Risk management
o Financial Education
What is the risk you are willing to take?
Risk – a possibility that an investment will be devalued or worst, will be lost
Risk Tolerance – ability or willingness to accept the possibility of loss at a certain level
or degree
Find the right balance between risk and return
The lower the risk, the lower the potential returns
The higher the risk, the higher the potential returns
Risk appetite - the level, amount or extent of risk an individual is willing to take
Risk Threshold – the limit or ceiling of your risk appetite
Risk Management – the process of identifying the possibility of loss, or costs involve, in
making an investment decision
HOW ASSET CLASSES COMPARE
RISK LEVEL TIME HORIZON POTENTIAL
RETURNS
Stocks High Long Term High
Bonds Moderate Medium or Long- Moderate
term
Cash Low Short Term Low
Alternatives Varies Long-term Varies
INVESTMENTS FOR MILLENNIALS AND GEN Z
Stocks
o Minimum investment: 5,000
The BPPIH
o Banks
o Power
o Property
o Infrastructure
o Holding Firms
Exchange Traded Fund
o Minimum investment: 2,000 – 5,000, depends on the minimum board lot and
market price
Modified Pag-ibig II
o Minimum investment: 500
Bonds
o Minimum investment: 5,000
Insurance (VUL)
o Minimum investment: 2,000 – 3,000
Mutual Funds and UITF
o Minimum investment: 1,000
Small Business
o Minimum investment: 5,000
Cryptocurrency
o Minimum investment: 1,000
Forex Trading
o Minimum investment: ($100) 5,000
Invest in new skills
o Minimum investment: time and effort
SPOTTING INVESTMENT SCAMS
Is it too good to be true?
A
Does the investment firm offer a strange recruitment model?
Is the business offering you guaranteed returns?
Is the investment company or person pressuring you to send money right now? Giving
you an urgent deadline?
Can they provide you with proof of their SEC Registration?
Scam Activities:
Phishing – suspicious looking email address
- Misspelling/grammatical error
- Link to spoofed website
Smishing - SMS from unknown number
Vishing - from unknown caller
Career path of CFMP
Certified investment solicitor (CIS)
Equities Securities salesman (ESS)
