Asset allocation is one of the more basic investment concepts that is most often neglected.
The concept behind it is quite simple: the percentage or allocation of your assets between bonds, equities, and the like should change as your life stage does too. Your investment horizon, your need for liquidity, and your capacity to take risks will then change as you grow older.
“As you go through life’s different stages, your financial needs change,” agrees Alvin T. Tabanag, personal money management coach, registered financial planner, and best-selling author of ’12 Steps to Build Wealth on Any Income.’ “In your 20s and 30s you will mostly be concerned with addressing needs related to starting and building a family: a wedding fund, building your own home, stuff for the house, a new car, and your children’s college education fund. As you enter the mid-life stage, focus shifts to more long-term needs.”
The “100 Minus Age” Formula
So how does one know how much of each asset to have?
One of the most simple rules used is the “100 minus age” formula. In it, one simply subtracts their age from 100 to determine what percentage of their investment allocation should go to stocks or equities.
So, for example, someone who is 30 years old should have 70% (100 – 30 = 70) of his investments in high-risk, high-yield investments such as stocks. Similarly, someone who is 60 years old should have no more than 40% (100 – 60 = 40) of his assets exposed to the volatility of equity investments.
However, with the improvements in medical technology and the increase in life expectancy, the ‘100 Minus Age’ formula has come under some scrutiny. As more people reach their 80s and 90s, the need for their finances and investments to continue passively working into their 70s becomes more important.
Thus, financial advisors have been looking at a more progressive (and slightly more aggressive) asset allocation strategy.
Those in their 30s are often in the middle of raising young families. They have one or two children in grade school, or are single professionals who are deeper into their careers as middle managers, senior managers, or junior executives.
People at this life stage are knee-deep in generating active income, and have a relatively longer investment horizon. Thus, investors in this life stage have a larger capacity for equity investments. However, people in this life stage are also usually building assets through leverage such as a car or a house, and with hefty expenses such as school tuition fees.
Real Estate across Life Stages
What’s interesting to note is that real estate investment is a key asset that should always be present regardless of life stage. Property investments–specifically, buying property in the Philippines and investing in condominiums for sale–are always a good idea as they steadily increase in value over time. They can also be a source of both active and passive income when managed properly.
Visit here to find the best property for you today.
Cryptocurrency is a form of money that’s used entirely online, without the need for banks or an exchange of physical cash. It may sound difficult to understand at first, but it’s real, and it’s here.
Cryptocurrencies are named as such because they are secured using cryptography, a method of encrypting data such that it can be accessed only by those it was intended for. The very first cryptocurrency, Bitcoin, was founded in 2009 by one Satoshi Nakamoto.
Bitcoin was originally intended as a “peer-to-peer electronic cash system” where currency gets traded between two entities without having to use a middleman such as a financial institution. Unlike traditional currencies, cryptocurrencies are entirely digital, residing only in the Internet. They are not regulated, nor are they secured in a bank or backed by precious metals. They also can’t be printed or minted. Instead, they are mined on computers, which entails solving highly-complex cryptographic puzzles that become only more difficult and expensive as a particular cryptocurrency grows more popular.
How Do They Work?
Cryptocurrencies exist thanks to a technology called a blockchain. You may think of blockchains as enormous online ledgers that contain all the transactions ever made with that particular cryptocurrency. So if you were to give X amount of coins to your friend Alice, that transaction gets validated on the blockchain and broadcasted across the network through peer-to-peer sharing. Once confirmed, this anonymous transaction becomes set in stone—it cannot be changed, forged, or removed. It also means that cryptocurrencies are decentralized and unregulated by any authority (at least for now).
Nowadays, people equate cryptocurrencies to Bitcoin, but many other types exist and the list keeps growing. Among the most popular are:
Ethereum – launched in 2015. Aside from being a cryptocurrency, Ethereum is an open-sourced software platform that enables developers to build applications. By using programs called Smart Contracts, Ethereum facilitates the exchange of value, such as money and content.
Litecoin – created in 2011 by former Google engineer Charlie Lee. Resembles Bitcoin, but features quicker block generation for faster confirmation of transactions.
Ripple – Launched in 2012, Ripple differs from Bitcoin in that its consensus ledger doesn’t need mining. This makes it attractive for businesses and banks in that it uses less electricity and computing power.
Why Invest in Them?
The digital nature of cryptocurrencies makes them useful in various ways.
Global Reach – it doesn’t matter where you are; you may send cryptocurrencies to anyone in the world.
Security – True to their name, cryptocurrencies are highly secure and anonymous. They are not kept in a file which can be hacked or stolen. To trade with them, you use two addresses—a public one which you can use to accept cryptocurrencies, and a private one by which you can send cryptocurrencies.
Growing Acceptance – In the past, it was difficult to find any merchant who would accept cryptocurrencies. Now, however, you may use them to pay for a variety of things. Bitcoin remains the most widely accepted, but others like Ethereum and Ripple are catching up. Click here for a list of businesses that accept cryptocurrencies.
Of course, the main reason why cryptocurrencies are a hot topic right now is because they’ve made a lot of money for a lot of people.
To illustrate, Bitcoin prices peaked at $1,165.89 in November 2013 before taking a nose dive. But in late December 2017, it hovered around a mind-blowing $14,000. Which means if you mined 50 Bitcoins in 2009, they were worth a whopping $700,000 or above Php 35M at the tail end of 2017.
Bitcoin is not alone in this. Ethereum, while only second to Bitcoin, recorded a meteoric rise of 2700% from May 2016. As a new form of money, cryptocurrencies have attracted worldwide attention and—given how the market has pushed their prices to dizzying heights—are considered among the hottest investments to date.
Before you rush online to grab some coins, however, take heed: as previously illustrated, the one thing you can count on with cryptocurrencies is volatility. If you go in right when the bubble bursts—and that can happen at any time—you stand to lose it all. Cryptocurrencies aren’t backed by anything. There is no safety net.
One viable strategy is to use any realized gains from cryptocurrency investing to purchase tangible or hard assets—assets that gain more value over time. So if you won big in Bitcoin, for example, know when to quit. Remember, the only time you make money from investing in cryptocurrencies is when you cash in any gains.
You can use your winnings to purchase government bonds, or even better, high-end real estate currently available on the market. These go up in value over time, are not as volatile as cryptocurrencies, and are backed by actual value. Alveo Land, in particular, is a top real estate developer in the Philippines that offers a multitude of residential, office, and leisure investment choices all over the country. You can learn more about their portfolio, particularly their condominiums for sale in the Philippines, here.
Regardless of these caveats, it seems that cryptocurrencies are here to stay. Even if the cryptocurrency bubble does burst, it’s a good bet that once prices stabilize and start climbing again, it will become a good investment in the short or medium term.
Getting into the Game
The first step is to study the cryptocurrency market. Ask yourself: which currencies will you invest in? When will you buy? At what point will you sell?
Then to actually trade with cryptocurrencies, you need a cryptocurrency wallet, an application that lets you interface with a cryptocurrency network much like an e-banking application lets you interface with a bank. Wallets do not actually physically store any currency you own. Instead, it contains your public and private keys, which you need to perform transactions.
There are many kinds of wallets depending on the cryptocurrency you want to use, so choose one according to your strategy. From there, you can purchase currencies from cryptocurrency exchanges such as Bittrex.com or Quionex.com. However, bitcoins are so popular you can buy them from Unionbank, participating 7-11 branches, and withdraw them into Philippine pesos at Cebuana Lhuiller branches, among other places.
Once you do buy bitcoin or invest in any other cryptocurrency, you could look towards investing in real estate. If you’re looking for the right property for sale in the Philippines, check out properties developed by one of the top developers in the Philippines. Click here to know more about Alveo Land’s condominiums for sale.
The Philippine Stock Exchange Index (PSEI) hits all-time highs in October, even breaking the 8,500 mark in intraday trading by mid-October. Matching a similar trend among several US and major Asian indices, this was buoyed by the government’s announcement of the liberation of besieged Marawi City, as well as some active foreign investments. The market is also up by 9% compared to the same period last year; and around 20% since the start of the year. Some market observers expect that this trend will continue, and even breach 8,600 before 2017 ends.
But while the general uptrend is a good sign of investor confidence, it has been a volatile past 12 months for the Philippine Stock Market. In fact, the PSEi bottomed out at 6,499 sometime in December 2016 to a 52-week low. It also dropped by roughly 1,000 points in just a 60-day span almost a year ago (between October and December 2016).
This is the scenario today: inflation is at a steady 3%, GDP is forecast near 7%, the peso is weaker at PHP51=USD1, and there is a lot of political noise inside and outside the country. Because of these factors, there is little consensus whether the PSEI will breach 8,600, or fall steadily and settle somewhere at the 8,300-level. As in the world of stock investing, no one knows when and where the market will go.
Investing with Stability
While investing in stocks is, and should be, part of a balanced portfolio, investing in more stable, less-volatile assets should also be part of your investment mix. Hence, investing in real estate always makes good sense.
The value of real estate investments gradually but steadily appreciates over time. This means that it does not have the volatility associated with the day-by-day or hour-by-hour fluctuations of the stock market. In fact, a recent report shows that residential property value in Metro Manila has grown by around 3% on a quarter-to-quarter basis, and is projected to increase by 6% to 9% in 2018 on a year-on-year forecast. It is not as dramatic as the 20% YTD increase of the stock market, but not too bad, either.
Real estate investments can also be both self-liquidating assets and sources of passive income at the same time. You can lease your property to interested parties, and the rent can be used to pay for the mortgage you may have taken out. The same report shows that residential rental yields in the Philippines are at 5.5%; the second highest rate in Asia.
So make sure to put your money in an investment with a trusted property developer that has a track record of high-quality developments. If you’re looking for ideal condominiums for sale in the Philippines, both Callisto in Circuit Makati or Park Cascades in Arca South, Taguig are great choices. If you want to be in the middle of everything, Orean Place at Vertis North, Quezon City or Portico in Pasig are your best bets. And if you’re looking to invest outside of Metro Manila, there are property options such as Aveia in Laguna or Patio Suites in Davao to choose from.
Regardless of what you’re looking for, Alveo Land can offer the right real estate investment for you. To know more, click here.
“Location, location, location” is the key advice for real estate investments. Proximity to commercial and medical centers, access to major roads, and cost of living all figure into this important decision.
It helps to narrow down the list. While not as seemingly in-demand as top condominiums in BGC or Makati (be it both in terms of pre-selling and RFO), here are some locations that still show great potential for a good ROI. If you’re looking to invest in Philippine real estate, snap up these locations before their prices peak.
1. Quezon City
As the largest city in Metro Manila with a population of 3 million people, Quezon City richly deserves a place on this list of prime real estate investments. Its latest CBD was touted by a World Bank study to be “the center of gravity of all commercial activities in the coming years.” This district has it all: major shopping centers such as Trinoma Mall, your choice of internationally accredited hospitals, three major transit stations along main thoroughfares, golf courses, and parks. Once the MRT-7 train line is completed by 2019, Quezon City will see even higher foot-traffic and an uptick to its already considerable asset value of P31.92B. Small wonder that QC ranks second only to Makati as the richest city in the country.
Top pick: Take a look at Alveo’s Orean Place in Vertis North, an address master-planned for centrality, connectivity, and efficiency as QC’s new city center. Currently, Seda Vertis hotel and Vertis mall is fully operational for everyone to enjoy.
Also located near recreation centers like Ninoy Aquino Parks and Wildlife, one of the last lungs of a densely-populated metro.
2. Pasig City
Pasig has plenty to offer. For decades, Ortigas Center was the target commercial district and site of prime real estate investments for small businesses and large corporations alike. With the rise of BPOs, residential demand has shot up as well.
Pasig boasts of a perfect blend of residential and commercial spaces, with neighborhoods just minutes away from the business district. Given that, Zipmatch has rated Pasig residences in Maybunga, Kapitolyo, and Ortigas Center with high rental yields of 9.37 to 10.29%, beating the national average of 7%. Expect these figures to skyrocket as the P1.6B road project linking Ortigas Center to BGC nears its 2020 completion date.
Top pick:Portico in Pasig is the top pick on the investment list because of its access to the Pasig CBD, Kapitolyo, and the aforementioned Ortigas-BGC link.
Manila proving too crowded? It may be time to look elsewhere, and the relatively nearby province of Pampanga makes for a prime candidate. Located at the heart of Central Luzon, Pampanga straddles both the North Luzon Expressway (NLEX) and Subic-Clark-Tarlac Expressway (SLEX). It also has its own airport—Clark Airport—as a gateway to the rest of the world. And given its lower cost of living compared to Manila, Pampanga provides excellent real estate investments in the Philippines.
Apart from ease of travel, Pampanga is seeing robust growth in its population of 2.6 million, its agricultural and manufacturing industries (9.5% GDP; the rest of the nation’s GDP averages at 6.5%), and its BPO sector in the Clark Free Zone area. Angeles City and San Fernando in particular have seen a rise in shopping malls, resorts, and hotels.
The most exciting recent development, however, is the P12.55B expansion of Clark Airport slated for 2019, which may turn that area into Asia’s next aerotropolis. It’s little wonder, then, that Pampanga is seeing an enormous demand for real estate, with Ayala Land developing Alviera, a sustainable community in the municipality of Porac.
Top pick: Buy a lot in Alveo Land’s Montala, located in a key location within Alviera.
Those looking for peace and quiet outside the bustling city can consider the province of Laguna. The province is seeing an influx of housing projects as the demand for space heats up, particularly from OFWs looking for living spaces in the suburbs. Along with the manufacturing hubs and BPO offices, this has contributed to Laguna’s rank as the 8th richest province in the country. With the extension of the South Luzon Expressway Toll Road 4 (TR-4), this will mean easier access to and from southern provinces like Quezon and Batangas, contributing to the province’s wealth.
Arguably, Laguna’s greatest draw is its lush green countryside, relatively free from the traffic and air pollution that perennially plague Metro Manila. With a density of only 1,081.8 persons per sq. km., lots for sale in Laguna are found in naturally peaceful communities, a perfect fit for those looking to live in a quieter environment. It’s also close to popular tourist and vacation spots such as Tagaytay and Batangas, where a host of places for leisure and relaxation are just a few hours away.
Top pick:Aveia, in particular, offers a quaint community strategically close to both the Laguna Techno Park and Laguna International Industrial Park, while being only 15 km away from the Alabang CBD.
If your tastes run farther south, you can look into Mindanao’s industrial, commercial and financial center: Davao. Davao City boasts of a phenomenal 9.4% GDP, while its cost of living and doing business are 20% lower than that of Manila, according to Numbeo.com. Despite its 1.6M growing population, Davao City is also among the safest cities in Southeast Asia, with High Numbeo ranking in terms of Quality of Life and Low in terms of crime. This makes Davao a sound choice for real estate investments.
Davao City is a prime target of the current administration’s “Build, Build, Build” program. Already home to five top universities, an abundance of national banks, shopping centers, churches, park areas, and commercial districts, the city is also working with Japan to develop a P19.81B by-pass road that will cut travel time along major roads by nearly half. Along with other projects in the works, this will doubtless push up Davao City’s current asset value of P9.89B.
Top pick: Located in the Abreeza district, Patio Suites is a prime investment choice given its easy accessibility to the Abreeza mall, Seda hotel, and the Abreeza Corporate Center.
Every Alveo Land development — vibrant neighborhoods, groundbreaking living solutions, masterplanned communities — nurtures individuals and hard-earned investments with a singular vision: giving you a place for living well.
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