(If you want a quick guide for beginners how to start investing in the Philippine stock market, you can download your free ebook here.)
I have a friend in Canada who invested in mutual funds in 1990s. He lost money even if it was cost-averaging strategy. How can this be possible?
Here is a short answer from our friend Aya Laraya:
Cost Averaging is a strategy to minimize potential losses PROVIDED that the instrument you are cost-averaging is NOT junk. If you cost-average junk, you will still lose money.A Mutual Fund is no guarantee that you will make money and if the Mutual Fund invests in bad securities, then the investors lose money. The biggest assumption in a Mutual Fund is that you ASSUME that the fund manager KNOWS what he is doing. Unfortunately, there are good fund managers and bad fund managers so if you end up with a bad fund manager who invests in bad securities, then you will lose money REGARDLESS of the investment strategy you employ.
Make sure that you use its power to empower your investments!
Receive regular stocks update too for your investments in Philippines Stock Market.
Do you want to receive STOCK PICKS and other lessons on money management & business ideas?Check out Truly Rich Club and receive 14 incredible gifts for FREE, including the opportunity to earn passive income every month!
Click here to learn more.