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Monday, April 4, 2016

CFA Society Philippines’ Financial Fitness Run Now on its Third Year

Wazzup Pilipinas!

CFA Institute, the global association of investment professionals that sets the standard for professional excellence, will recognize May as Putting Investors First Month which marks the third year of this annual awareness campaign.

“CFA Society Philippines, being one of the member societies of CFA Institute, is taking part in this global effort by organizing again the Financial Fitness Run (FFR) which aims to inform the investing public about the importance of being financially fit and how to be financially fit,” April Tan, president of CFA Society Philippines, said.

“Investors, commit one or more common investor mistake, wherein one individual often proves to be their own enemy which may lead to dramatic impact on overall returns. And, this year we would like to create awareness about the most common and costly mistakes investors make,” Tan adds.

CFA Institute warns individual investors to be cautious of their investment decisions to avoid these seemingly simple yet impactful missteps.

1. No investment strategy

Every investor should form an investment strategy that serves as a framework to guide future decisions. A well-planned strategy takes into account several important factors, including time horizon, tolerance for risk, amount of investable assets, and planned future contributions.

2. Invest individual stocks instead of a diversified portfolio of securities

Investing in an individual stock increases risk versus investing in an already-diversified mutual fund or index fund. Investors should maintain a broadly diversified portfolio incorporating

different asset classes and investment styles. Failing to diversify leaves individuals vulnerable to fluctuations in a particular security or sector.

3. Investing in stocks instead of in companies

Investing is not gambling and shouldn’t be treated as a hit-or-miss proposition potential. Analyze the fundamentals of the company and industry, not day-to-day shifts in stock price.

4. Buying High

The fundamental principle of investing is buy low and sell high. Others at risk for “buying high” are those who follow investment fads, buying the “popular” stocks of the day. Typically, these investments become fashionable for brief periods, leading many to invest at the height of a cycle or trend—just in time to ride it downward.

5. Selling Low

The flip side of the buy-high-sell-low mistake can be just as costly. Keep in mind that not every investment will increase in value and that even professional investors have difficulty beating the S&P 500 index in a given year. Always have a stop-loss order on a stock. It’s far better to take the loss and redeploy the assets toward a more promising investment.

6. Churning your investments

Too-frequent trading cuts into investment returns more than anything else. A study by two professors at the University of California at Davis examined the stock portfolios. The study found that, without transaction costs, these investors received a 17.7% annualized return, which was 0.6% per year better than the stock market itself. But, after transaction costs were included, investors’ returns dropped to 15.3% per year, or 1.8% per year below the market. Again, the solution is a long-term buy-and-hold strategy, rather than an active trading approach.

7. Acting on “tips” and “soundbites”.

Listening to the media for their sole source of investment thinking rather than pursuing a professional relationship with an advisor is a far too common investor mistake. While breaking news and “insider tips” may seem like a promising way to give your portfolio a quick boost, always remember you are investing against professionals who have access to teams of research analysts.

8. Paying too much in fees and commissions

Incredibly, investors are often hard-pressed to cite specifics on the fee structure employed by their investment service provider, including management fees and transactions costs. Investors should, as a precondition to opening an account, make sure they are fully informed as to the associated expenses that accompany every potential investment decision.

9. Decision-making by tax avoidance

While individuals should be aware of the tax implications of their actions, the first objective should always be to make the fundamentally sound investment decision. Some investors, rather than pay a large capital gains tax, will allow the value of shares in a well-performing stock to grow so large it accounts for an inordinate percentage of their overall portfolio.

10. Unrealistic expectations

It is important to take a long-term view of investing and not allow external factors cloud actions and cause you to make a sudden and significant change in strategy. Comparing the performance of your portfolio with relevant benchmark indexes can help an individual develop realistic expectations.

11. Neglect

Individuals often fail to begin an investment program simply because they lack basic knowledge of where or how to start. Likewise, periods of inactivity are frequently the result of discouragement over previous investment losses or negative growth in the equities markets.

12. Not knowing your real tolerance for risk

Keep in mind that there is no such thing as risk-free investing. Determining your appetite for risk involves measuring the potential impact of a real dollar loss of assets on both your portfolio and your psyche. In general, individuals planning for long-term goals should be willing to assume more risk in exchange for the possibility of greater rewards. However, don’t wait until a sudden or near-term drop in the value of your assets to conduct an evaluation of your level of tolerance for risk.

This year, FFR is going to give out plaques to all of its half-marathoners. This is another first in Metro Manila race. Aside from plaque, half-marathoners will also receive a dri-fit finisher shirt. All 5k and 10k finishers will receive finisher medals and the top 50 finishers (25 male, 25 female) of each category will get a finisher shirt.

Gun start will be at 4:30am for 21k, 5:30am for 10k, and 5:45am for 5k. Interested runners can register with any of registration partners namely 100 Miles CafĂ©, A Runner’s Circle, Juego, Yonex and Li-ning. These registration sites are located in major shopping malls and business districts within Metro Manila. Race kits can be claimed upon registration. Online registration is also available at Goorahna.

Financial Fitness Run is powered by RG Events and supported by COL Financial, Inc. and Seaoil Philippines, Inc. Media partners are ANC, BusinessWorld, Malaya Business Insight, Wazzup Pilipinas, Enjoy & Invest,, Aktivshow, Light Network and Pinoy Fitness. Hydration partner is 100 plus. Official race clock will be provided by Soleus Philippines.

To learn more about the Financial Fitness Run, please visit Like the Financial Fitness Run facebook page to get the most recent updates, visit

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