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The Game Plan on Mutual Funds - How to Choose and Why Mutual Funds

The Game Plan on Mutual Funds – How to Choose and Why Mutual Funds

Now you ask me.

How do you:

  • Strategize on mutual funds? 
  • Why mutual funds? 
  • Why NO to mutual funds? 
  • How to choose mutual funds? 


Here are my personal recommendations and answers to the above questions:

1 How do you strategize on mutual funds? 

  • I recommend that you keep the mutual fund beyond two (2) years to waive the management fees or as prescribed by your mutual fund provider. 
  • I recommend that you buy mutual fund when the PSE index is red, or when the market is down
  • I recommend that you sell mutual fund when the market is up, and when you are satisfied with the gain / interest. 
  • I recommend that you track the performance of your mutual fund shares on a month-end, quarterly and yearly basis. You can check out related post here
  • I recommend that you time your entry and your top-ups depending on the performance of the market. 
  • I recommend that you hold your mutual fund shares long term

2 Why invest in mutual funds? 

  • Established expertise of mutual fund companies. Be managed by the best fund managers in the country. 
  • Diversified. Little amount goes a long way. If you can’t buy all the stocks you want, your mutual fund can. 
  • Liquidity. Withdraw anytime you want subject to related fees. 
  • Convenient and I guess, hip. As it rides the waves of technology, topping up your mutual funds is as easy as breeze. You can enrol to automatic deduction scheme such as BDO Easy Investment Plan. 

3 Why NO to investing in mutual funds? 

  • If your other investments perform better than mutual funds. (My stocks are). 
  • If you prefer few investment products in your basket. 
  • If you dread products not covered by PDIC.
  • If you think you have not realized your risk appetite. (In this case you prefer “conservative” investments such as bonds and time deposits. 

4 How do I choose the perfect mutual fund for me? 

  • Check out the prospectus of the mutual fund. Look for the list of investment products into which the mutual fund is invested. If say, you have a million and these are the products (or similar products) you wish you have, then perhaps you agree to the fund manager’s choice. 
  • Check out your existing portfolio. Do you wish to add a product that is not yet there? Or do you wish to add a product that shares the same risk as the existing ones have? 
  • Check out your own purpose WHY you are investing. Is’t aligned with your objectives? Do you wish to hold it for years and use it for something grand or pleasurable in the future? Or do you wish to keep it instantly available in your ATM cards? 
  • Check out other investors’ experience on the mutual fund you are eyeing. Are they satisfied? Do they want more? Or do they want it stricken off their portfolio? Visit forum, ask around, inquire to real investors. 

Please check out beginner articles on mutual funds here:

I hope the above helps you make a wise decision!

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