Untitled Document
Untitled Document
 
 
 
 
  RSA MARKET / FUNDS UPDATE AND OUTLOOK FOR 2010
 
 
The performance of global markets upholds what we said before. This new bull market will be an opportunity of a lifetime. In fact, many stocks have gone up 400 percent to 500 percent during this period. One of the reasons why markets have rebounded strongly is because they came from the worst level of market confidence, not actual dismal operational performance. Because of this, the recent recovery has been strong and swift.

Now that the holidays are over, it is time to get back in the game and take a look at what lies ahead in the year 2010. The year of the Tiger.

Local stocks rebounded with the PSE Index gaining 64% to 3,099.19. And despite the combination of the various tragedies, calamities and atrocities that have taken place in the Philippines last 2009, most Filipinos approach the New Year with a sigh of relief and with a more optimistic mindset.

We in RSA believe that 2010, will definitely be an even better year for equities. Elections are near and historically right after upon a smooth transition stocks gain 30% at the very least in the following 3 to 5 months. Given the quality of the leading candidate, it can be surmised that the market can be more buoyant for the 2nd half.

Although, nobody really knows exactly as to when typhoons will return, how much rainfall it may bring and what fate lies ahead for giants like AIG and other huge international financial institutions that are still in precarious situations. Similarly, there is also no telling when market corrections will come, how deep they will be and how long they will take.

That is why we have always advocated peso cost averaging, diversification of assets and proper allocation. Holding the right amount of equities lets you participate in their high returns in case the damage from the calamities or the correction in the market are not that bad. At the same time, having the proper emergency fund or cash and fixed income allocation will protect you in case the damage from the calamities or normal market corrections are worse than expected or the market pulls back substantially.

Moreover, our local mutual funds ended 2009 with a bang. Because these are “actively managed investments” they were great beneficiaries of market recoveries as well.
 
MUTUAL FUNDS ACTUAL PERFORMANCES
 
MUTUAL FUND 2008 2009 AVERAGE SINCE INCEPTION OF FUND
Philequity Fund -35.38% 64.99% 21.12%
Philequity PSE Index -35.06% 59.17% 21.08%
Philequity Peso Bond 3.19% 6.58% 8.31%
Philequity Dollar Bond 0.48% 12.39% 7.00%
Philam Bond Fund 2.03% 5.52% 8.44%
Philam Dollar Bond -7.36% 17.76% 5.89%
Philam Fund -32.51% 36.91% 11.28%
Philam Strategic Growth Fund -38.31% 47.41% 12.68%
GSIS Fund -31.57% 36.76% 8.46%
Philam Managed Income Fund 1.55% 1.77% 1.09%
AIG Global Bond Fund 1.74% 4.64% 3.19%
First Metro Equity Fund -26.48% 53.11% 26.61%
First Metro Balanced -3.68% 45.36% 14.66%
First Metro Fixed-Income 2.14% 5.32% 6.51%
 
New Year is also a time when we are game for resolutions. Why not include a good investment program on your list? Mutual funds are great vehicles for busy people, those without investment experience, and even for individuals with limited capital. You might just be surprised and delighted to find out how much this resolution can go a long way.
 
For more information, please feel free to contact us at telephone numbers: 894-1811 or 812-1995. You may also visit our websites: www.rampveradvisors.com or www.rampver.com.
 
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