Latest Stories

Happy days can move up and down


Antonio C. Moncupa, Jr.

Some readers found our piece last  week ‘bitin’or rather vague. We  understand the reaction. But our  intention  was not to tell people to invest or not. It was to show that investing is not as simple as listening to so-called experts say where the markets will go. Our column meant to dramatize risks, to show again that no one is really sure where the markets are headed. And that even astute investors could misread the markets.Otherwise, if they knew, why did they push and bought up stocks to the point that the index reached 7,392.20 on May 15 only to hit a closing low of 6,557.89 on June 5? That is an 11.2% fall. And why did the wise men in banks’ dealing rooms bought the 25-year long bond at 3.93% on April 30 only to see its yield rise to 4.58% on June 7? That would have caused a P100,000 investments go down to P88,800 and P92,444.18 for stocks and bonds, respectively, if the investor sold last Friday. We are not trying to scare off people from buying stocks and bonds. We just want to remind our readers that markets could go down. Of course, if one bought stocks and the 25-year long bond at any point last year, they are still making a lot of money even at these levels. The index is still up 15.3% this year, which you would have earned if you were in an index mutual fund or UITF. The thing is to ask ourselves if we’re ready to accept the volatility of the markets. How we wish it was a sure thing to make money in stocks and bonds. But it is not.

It’s Personal

Some readers wrote us asking where to put their money. We almost have a familiar refrain.We cannot give an outright answer as it really depends on the personality of the investors. Even as we write this, we have to make sure that we are not leading people to make decisions based on generalized reading of the markets and general principles of investing. Our readers must consider what they read here and elsewhere as inputs for them to evaluate and study further before making their own investments decisions.Investment advisors also have to do an appropriateness review of investors,which is almost impossible to do in an email exchange. Is their money for long-term or short-term? Does the investor understand the risks that the advisor is explaining? Can the investor handle the possibility of losing? For sophisticated investors or those who are clearly prepared for the possibility of a rough ride, advisors can offer potentially high yield investments that carry potential losses as well. For those who have no stomach for the ups and downs of markets, advisors can offer safe investments like

30-day time deposit that pays 1.5% yield annually or money market UITF that are likewise expected to yield around 2% per year. The kind of investments has to be tailor-fitted to our appetite for risk. It’s really personal. Accept risk, make money. Or lose some. That is just the way life is. We cannot have our cake and eat it too. If someone tells you that you can, don’t blink and hold your money tightly.

More volatility, but……

In this interconnected and liberalized world, markets could be volatile. Foreign investors would come and go. Developments in other parts of the world affect local markets. The focus now are the uncertainties in the developed world. Specifically, the US, Europe, and Japan. Everybody is guessing when the US central bank will scale down its asset purchases. Will German policy shift, and how will it affect European recovery, after its September elections? And Japan, how will its newfound monetary activism affect the world? Opinions vary, and the debates involved. All these could be translated into greater local volatility as foreign investors form a significant part of our local markets. We should, however, remember that the Philippines remains an oasis in the desert of a problematic world economic landscape. We were shaking off the aftershocks of the 1997 crises while the developed world were creating bubbles. And that is why we have nothing to burst when theirs imploded in 2008. The prolonged weakness of the peso, the fiscal reforms government put in place, better monetary management, and the favorable view of the majority of Filipinos of the current political leadership, have put the country in a sweet spot.

We also believed that just as nothing stays on top forever, nothing stays down forever. The economic crisis of the developed world is running on its 5th year. We go with those who believe that it is on its tail end. The desert is showing more life and the promise of re-greening. These are good omens for local investors. We can view the recent correction of the stock market as an alignment.

We were just too far ahead the rest of the world. The story was good and investors appear to have been over excited. And just as markets overshoot on the way down in times of pessimism, it overshoots up in times of optimism. We join those who believe that while the local bourse could be volatile, the good story is intact. And while we are still pricey at 6,700 relative to other markets, one can argue it is warranted given the better prospects of the country. If the market moves between 6,400 and 6,700, that is fine. We will consider investing at the lower end of the range in the belief that the country is looking forward to good growth in the coming years and with that, better corporate earnings, and eventually, higher stock prices. And as we always say, if you are considering investing, study carefully what you are going into or go with fund managers with good track record. In the meantime, we would like to inform you that this column would shift from weekly to every two weeks. We were hoping that our initial apprehension of a weekly commitment to write as we attend to our full-time work was not warranted. But it is. Next, we will touch on the bond market. Until then.



Tony Moncupa, Jr. is the President

and CEO of East West Banking

Corp. Please e-mail your questions,

comments, suggestions to


Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Banking , Finance

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
  1. How to enjoy Buntod
  2. World bids Gabriel Garcia Marquez ‘Adios’
  3. How Zsa Zsa Padilla found Conrad Onglao; Sharon Cuneta played Cupid
  4. ‘Wild West’ Masbate’s pristine marine gems
  5. Kim Atienza: At home with art and design
  6. How Margie Moran-Floirendo keeps her dancer’s body
  7. Life lessons I want to teach my son
  8. Garcia Marquez left unpublished manuscript
  9. Historic Fort Bonifacio tunnel converted into a septic tank
  10. Wanted: Beauty queen with a heart that beats for the environment
  1. How Zsa Zsa Padilla found Conrad Onglao; Sharon Cuneta played Cupid
  2. Are your favorite malls open this Holy Week break?
  3. ‘Labahita a la bacalao’
  4. Miss America: Don’t suspend teen over prom invite
  5. Historic Fort Bonifacio tunnel converted into a septic tank
  6. This is not just a farm
  7. How Margie Moran-Floirendo keeps her dancer’s body
  8. Why is the lifestyle set now afraid to wear jewelry–before Kim Henares?
  9. 12 other things you can do at Pico de Loro Cove
  10. President Quezon was born here–and so was Philippine surfing
  1. How Zsa Zsa Padilla found Conrad Onglao; Sharon Cuneta played Cupid
  2. Mary Jean Lastimosa is new Miss Universe Philippines
  3. Did Angara ruin Pia Wurtzbach’s chances at Bb. Pilipinas?
  4. Dominique–Gretchen and Tonyboy Cojuangco’s daughter–now an endorser
  5. Vinegar test helpful vs cervical cancer
  6. From Jeannie to mom of suicide victim
  7. San Vicente beaches hidden but not for long
  8. Borgy and Georgina are back; others are off–again
  9. Why is the lifestyle set now afraid to wear jewelry–before Kim Henares?
  10. Sen. Angara: I thought Pia Wurtzbach gave a good answer


  • Wildlife bureau chief recommends returning large croc to wild
  • Nueva Vizcaya town gets irrigation systems
  • Napoles ‘not fit’ to be state witness – Luy’s lawyer
  • DOH releases names of Etihad passengers yet to be tested for MERS-CoV
  • Sayyaf man linked to Sipadan kidnapping falls
  • Sports

  • UST posts twin kill in Filoil pre-season cup opening day
  • Wizards beat Bulls in OT to take 2-0 series lead
  • Pacers rally past Hawks 101-85 to even series
  • David Moyes out as Manchester United manager
  • Nadal to face fellow Spaniard at Barcelona Open
  • Lifestyle

  • Haneda International Airport: A destination on its own
  • Wanted: Beauty queen with a heart that beats for the environment
  • Kim Atienza: At home with art and design
  • Life lessons I want to teach my son
  • Sweet party for Andi Manzano
  • Entertainment

  • Ex-Fox exec denies allegations in sex abuse suit
  • Kris Aquino backtracks, says Herbert Bautista and her are ‘best friends’
  • Summer preview: Chris Pratt enters a new ‘Galaxy’
  • Bon Jovi helps open low-income housing in US
  • Summer movie preview: Bay reboots ‘Transformers’
  • Business

  • McDonald’s 1Q profit slips as US sales decline
  • SEC approves SM’s P15B retail bond offer
  • $103M Vista Land bonds tendered for redemption
  • Oil slips to $102 as US crude supplies seen rising
  • SC stops Meralco power rate hike anew
  • Technology

  • Engineers create a world of difference
  • Bam Aquino becomes Master Splinter’s son after Wiki hack
  • Mark Caguioa lambasts Ginebra teammates on Twitter
  • Brazil passes trailblazing Internet privacy law
  • New York police Twitter campaign backfires badly
  • Opinion

  • One-dimensional diplomacy: A cost-benefit analysis of Manila’s security deal with Washington
  • No ordinary illness
  • Reforest mountains with fire trees and their kind
  • Day of the Earth
  • When will Chinese firm deliver new coaches?
  • Global Nation

  • Cha cha train to follow Obama visit?
  • No word yet on inking of US-PH defense pact during Obama visit
  • Filipina, 51, shot dead by 24-year-old American boyfriend
  • China, rivals sign pact to ease maritime tensions
  • Visa-free US trip? Do not believe it, says consulate