The best financial advice – BusinessMirror

There were many victims of the nearly two-year long Covid lockdowns. The proverbial “Poster Boy” in the Philippines might be Mr. Dennis Ang Uy, whose financial and business “empire” was thwarted by the nation’s economy coming to a grinding standstill.
Many—more than many—people turned to home-based businesses from food to handicrafts to provide for family income when their traditional businesses were not available. I spoke once before about a family down the road that owned a professional cleaning company that turned to direct farm-to-consumer produce supply. I have noticed dozens of homemade food companies that have now made the transition from delivery to brick-and-mortar restaurants. It is impressive what people can do when pushed to the wall bringing life to “necessity is the mother of invention.”
I might be able to write a piece titled “What happened to all the ‘Investment Gurus’?” about those that made their living telling other people how to prosper, when they suddenly found themselves without a paying audience. Trips to visit overseas workers were not possible and their benefactors are less willing to fund those sorties even now. I also used to make my income directly advising investing clients but that ended several years before Covid.
The problem is that the investing public is capricious and demanding. The public expects the guru to be right all the time. Therefore, what we saw was “Guru Shifting” from one investment asset to another.
The local stock exchange became the pariah that no one wanted to touch and for good reason as the market fairly much collapsed in 2020. Since then, the Philippine Composite Index has made the round trip back to March 2020 levels. The ‘PSE Guru’ became the ‘Crypto Guru’ and times were good for a while. But from April 2021, the S&P CME Bitcoin Futures Index has declined from 441 to the current 132, down 70 percent. Cash crypto buyers/holders did better depending on the entry price. The ‘New York Stock Exchange Gurus’ have fared better recently with the decline in PHP/USD exchange rate even as the Dow has also made a round turn like the PSE.
The ‘Financial Literacy gurus’ never go out of style—nor should they—although they too saw their customer base sort of evaporate.
But if the past two years were difficult for investments, it was also a hard time for traditional and previously sound financial advice.
Saving money and buying all different kinds of insurance always makes sense until it does not. “You only have to start saving a little money each month to guarantee an easy retirement” is one of those pieces of advice. But you should learn early that life is a casino where our future is tenuous at best. Realize that—as Bruce Wilds, American businessman and individual investor says it—“Much of our personal circumstances and lives revolve around money and the number of options it gives us when we possess it, which you can lose in a blink of an eye if things go against you.”
You and your family’s financial well being is not going to be found sitting on your couch and following a nice and neat set of “literacy” rules. Many, too many, Filipinos saw their life-savings almost if not totally wiped out during the lockdowns. And they were forced to break my only “financial literacy” rule. Never borrow money to “buy things” because when—not if—the famine comes you will be forced to borrow money to survive.
Borrow P70,000 to buy an iPhone 14? It makes more sense to borrow P70,000 and spend it all on ChickenJoy and put it in your freezer.
What’s the best financial advice I can give you? Simple. Pray for good weather through Christmas. We cannot afford a major typhoon or worse, two typhoons, for the rest of the year. Food prices skyrocketed last month, and it was not due to the recent typhoon, at least not yet.
With good weather, prices will still go up. With bad weather, we are in trouble.
E-mail me at [email protected] Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis provided by AAA Southeast Equities Inc.
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