Investalk2014: 4 Big Reasons Why Now Is A Good Time To Start Investing
Have you been planning on investing your hard-earned money into a good investment, but the economic downturns have been putting you off?
Whether you have been planning to invest or are still deciding on whether you should take the plunge; now is a good time to start investing.
Here are 4 big reasons by 7 top Investment gurus on why you should start investing given during the Investalk2014 at Solaire Resort and Casino.
Investalk2014: 4 Big Reasons Why Now Is A Good Time To Start Investing
Seven investment gurus talk about investment trends and techniques during Investalk 2014.
Picture taken from the Investalk2014 website.
1. Economic Growth
If you follow business news, you should know by now that the Banko Sentral ng Pilipinas (BSP) has recently reported lower Gross Domestic Product (GDP) growth during the first quarter of 2014. This means that the production of goods within the Philippines has slowed down.
Of course, such news would discourage new investors to enter the market at this time out of fear that the market value would drop even more. What you should know is that investing isn’t about looking at the present, but about seeing the potential growth in the future.
During the seminar, professor Alvin Ang, President of Philippine Economic Society and an economics professor at Ateneo de Manila, said that despite lower GDP growth, foreign agencies like the International Monetary Fund (IMF) and Moody’s have forecast better economic performances in the coming quarters.
“There are things we need to consider beyond the first quarter [GDP] Results… IMF says it’s a temporary set back; in a sense, they are not looking at the economy as going to slow down,” he says.
One reason for the economic setback is the damage caused by the 7.1 magnitude earthquake followed by super-typhoon Yolanda that hit central Philippines late last year.
“They’re seeing this as an opportunity to rebuild and that growth is going to be sustained in this context,” he adds.
2. Investment Grade Rating
Last year, news of credit rating agencies upgrading the Philippine’s investment rating from “junk grade” to “investment grade” made a huge buzz in the Philippine business industry.
But what is an Investment Grade to begin with? It basically means that rating agencies have confidence in the Philippine economy that in the event that foreigners invest in the Philippines, they will gain a profit rather than lose money.
Professor Ang cites that one what has prevented us from getting an investment grade in the past was our foreign debts. Since 2003, however we have been able to significantly change our foreign debt structure, giving us better management of our debts.
According to him, one way we can really make use of the investment upgrade is to fast track the building of infrastructures that can cater to future investors.
By doing so, we can attract foreign investors to invest in our country, create jobs and increase domestic production. More production means higher market gains and profits in the long run.
Infographic taken from philnews.ph
3. Mid-Cycle Economy
According to Michaelangelo Oyson, CEO of BPI trade, the Philippine economy is in its mid-cycle where GDP and Earnings per Share (EPS) growth is still growing strong. However, it’s slowly closing into the late cycle where GDP and EPS growth will start to decline.
“If the Philippines continues to deliver above expectation of the first quarter GDP growth, it will be able to sustain the stock market.” Oyson notes. He also presented Gorege soros’ “theory of reflexivity”, an investment theory that puts peoples emotions into consideration when buying stocks.
He [Soros] understands that emotions get in the way, so he says ‘identify the trends, ride the trend, and get out before it reverses’… you can see this happen in many, many cycles.
4. ASEAN Integration in 2015
The ASEAN Integration in 2015 was a hot topic during the seminar and one that future investors can take full advantage of. The good news is that some of our industries have already prepared for the ASEAN Integration.
“There are several industries already ready for integration; one of them is the food sector… the best way to take advantage of this is instead of looking for something all over ASEAN, is to look for something in each country.” Tommy Tiu, trainor for the Philippine Stock Exchange Securities Specialist Course, said when asked what industries are ready for the integration.
If the food industry is ready for the integration, the banking industry however, will be having complications during the upcoming integration.
“Our big banks in the Philippines are still very small compared to our counterparts in Malaysia and Singapore. these banks will have to acquire the smaller banks.” says Oyson.
But that shouldn’t be a big issue since it’s only natural to have some constraint during the first few months of integration.
“the ASEAN [integration] 2015 should not scare us, it is just telling us that the region is becoming integrated… our challenge there is how we go about getting a slice of the market.” said Professor Ang.
There you have it! 4 big reasons why you should start investing now. did you attend Investalk 2014? if you did, share your thoughts in the comment section!
