My First Try at Investing in a Mutual Fund

My Financial Advisor at Sunlife (Sasha So Seng Yu) helped me buy into a Sunlife mutual fund lately. The money I used was initially supposed to go into a Sunlife insurance plan but due to various reasons I backed out of the insurance idea. Then Sasha said I can always invest in a mutual fund because it gives good returns anyway although there’s no insurance coverage. So I gave her written authorization to process my entry into mutual funds, signed the necessary documentation and now I have 1937 shares in the Equity Fund.

Although I knew that buying into equities is a big risk (because the returns can even be zero over time) I agreed to it because a) I trust Sasha’s judgement and b) I know also that the opposite is true, that the returns can be 20% over time or even more. I remember a guy friend of mine telling me that for decades he owned these shares of stock that were practically worthless and he merely held on to them for sentimental reasons – then all of a sudden the shares became profitable and he cashed in. Sasha did make it a point to tell me that I can still withstand the risk because I’m only 40 and though there may be some bad years down the line the odds are on my side that I will profit from my mutual fund investment. She also stressed that a mutual fund is good for a long term investment POV.

I’m still learning about how mutual funds work as I go. Today I learned how to find the fund value, by following Sasha’s instructions. The value of putting my money in a mutual fund, for me, is that a Fund Manager will be managing it on my behalf, because I really have no experience in investing in stocks. I do have one friend who let me peek at her stock shares and she was 4000 pesos in the red. She says it’s been that way for months now. To me, that’s a pretty big loss though of course she might eventually recover everything if the market turns in her favor. So that’s why I decided to invest in a mutual fund instead of being a Lone Ranger and doing every stock transaction by myself.

Sasha also taught me about the Cost Average Method which basically means investing in the mutual fund regularly whether the market is up or down. The idea behind this Method is that eventually the average value of your investment evens out to around 20% if the market doesn’t crash over time. I did my homework about the Cost Average Method with help from my friend and my brother so I trust that this is the right way to go. All things considered it’s still preferable to a regular savings account in a bank where your money will not profit as much. So I assume that I did the right thing by trusting Sasha’s judgment about putting my money in equities, for the long term.