Investing in BDO Equity Fund in Layman’s Term [Part III]

Hey guys,

It’s been a while since my last post on my BDO Equity Fund investment. Let me continue my story to what the current status of my investment is.

When I last discussed about BDO Equity Fund, I mentioned that I have decided to re-invest the money I withdrew from my initial BDO Equity fund investment, which was PHP 11,263.049, last March 5, 2012. The NAVPU at that time was PHP 292.97. Divide the capital [PHP 11,263.049] by its NAVPU [PHP 292.97] and you’ve got 38.44 units.

It was around the first week of June last year (June 2013) that I realized that the NAVPU has already reached PHP 404.52. What a huge increase in its value from when I first acquired my units, hmmm. Then came my greedy and frustrated billionaire instinct – I have available cash and I can see that BDO Equity Fund is performing really well, so I decided to invest a little bit more. To put into figures, I added PHP 100,000.00 in my investment. It’s a risk for me but I was thinking of long term benefits anyway and my money was sleeping in the bank so what the heck. :P

So I went to BDO on 17th June, 2013 to add PHP100,000.00 more on top of my current investment which was already around PHP15,113.00 (from PHP 10,000.00 as described in my first post). Current NAVPU that time was PHP 393.1725, so I got 254.34 more units on top of the current 38.44 units I have from my existing investment. To sum it all up, I already have 292.78 units valued at PHP 115,113.00 by 17th July, 2013.

They gave me another Confirmation of Participation (COP – a certificate presented to you as your proof that you have an investment with the bank) since I didn’t bother combining it to my old investment just to have it all in one COP (For me, it will be more complicated that way having to withdraw funds and reinvesting and signing more papers – I’d rather stick with having two COPs).

Thinking in the short term

Little did I know that the current NAVPU on 17th June was the beginning of the decline in its value. I wasn’t able to foresee that it’s value on the first week of June (around PHP 404.52) was already at its peak before declining in value Both the NAVPU and my emotions were riding an extreme roller coaster ride. From then on, it reached its lowest value (based on current information), which is PHP 351.46. This is a heart stopping figure for me who just invested a considerable amount of my life savings at a much higher value. There was even a time that I avoided monitoring the NAVPU on fears that I may impulsively withdraw due to fears of it losing more value. Anyway, that’s me looking at the short term. I chose to stick with my initial strategy: my investment is long term, and I do not plan on withdrawing until my retirement.

For me, long term is champion in this case 

I chose to stick with my initial ‘long term’ strategy, and I think I am now back in the game. As I write this, NAVPU is already at PHP385.33, and I am optimistic that its increase in value is on it for the long run. See below for the most recent charts from http://www.bloomberg.com/quote/EPCIBEQ:PM

bloomberg

What are the things that I learned from this experience?

  • Do not be greedy. Most people try to dip in when earnings are high only to find out that the time they immersed themselves is the time when the value of the investment is already at its peak. Sometimes, it is best to go against the flow.
  • Never let your emotions decide. If I allowed this to happen, I might have already withdrawn all my funds at a much lower rate in fears that my investment would gradually lose value. Always make an informed decision.

I hope y’all learn from my experiences and I hope I inspire you to stop doing nothing and start commanding your financial future.

Let me know if I can help you in anyway. :)

Update (02/14/2015): I have published this article, “When Should You Invest in an Equity Fund?”, to address one of the most ‘in demand’ questions my viewers have. Enjoy and happy investing!

Best,

FRUSTRATEDBILLIONAIRE

***Above explanation is for illustration purposes only. Please note that I do not endorse investing in these funds as this will now be based on you, the decision-maker, to determine if investing in these funds will be in your best interest. Please also read through the BDO site for more relevant and accurate information regarding its products and services.

FrustratedBillionaire