Signs of the Hard Times

Hello blog and blog readers, it's been a long while since I last posted a blog entry. Been quite busy doing some assignments that I hardly have time (and brain juice) to think of anything to write about.

The stock market has been sucky year to date, as with most - if not all - investments, namely UITFs, mutual funds, variable life insurance. The question everyone is asking is, where can I place my money now?

The answer eludes me as well.

I haven't gone offshore nor lived far from these here shores, but I know that in other countries, they have a diverse array of available investment products in the market. As compared to ours, they probably have higher yielding bank savings deposits, et. al.

Think about our local ones, our bank savings nets us less than 1% per annum. This is a far cry from the inflation rate of the country, which is threatening to go even higher. Apart from the fact that they have (really) gross interest rates, they also have really gross service. The level of service in our banks today is measured by how big your assets are with the bank.

I tend to think that in the Philippines, there are only two major types of investments -

CAPUTI - Capital Protected. Unprotected from Inflation (or better known as KAPUT, because your money goes kaput when inflation is taken into account)

IPITCU - Inflation Protected But Capital Unprotected (or for people who have money invested in stocks, UITFs, "Ipit ako ngayon", a euphemism for "I can't liquidate my investments", or sometimes, a euphemism also for "I wish I were dead right now")

In these difficult times, a friend of mine said that you should put your money in hard assets like property and jewelry (fake ones need not be accounted for). I agree, but with a caveat.

These won't fluctuate as much, however, the problem is during these times, you also want to stay liquid. But if you have extra cash and you have nowhere to put it into, maybe it's time you tried eyeing those two hard assets.

In the absence of economic data, investors such as you should open your eyes. As I put it myself, everyone should be an observant economist. As well, it also means that in the absence of data, it should be observations of hard reality.

Take a trip to Divisoria, the first thing that you will notice is the lack of traffic. In the long history of Divisoria, there has never been a time where traffic was scarce. We could attribute it to the summer season (i.e. students, one of the major drivers of the Philippine economy), when students have headed back to their home province.

But that's just one viewpoint. Most of the people who shop and buy stuff in Divisoria are people from the lower classes. These are the people hit hardest by the rising oil and rice prices.

Yes, the high cost of rice importation has put the "P" to the "rice".

Even the usual traffic along Lawton to City Hall has dwindled.

What else must you check out?

Check out the parking space at the local mall. See if it's full of cars, or full of open spaces.

This June will be the most critical point in time, at least for me. When the school starts, try to see if business starts to pick up. If not, then hold on to your butts (and cash), 2008 will not be as auspicious as the number 8 should be.