Philippine Finance | Finance Diversity
One of the most often asked question when a person want to increase their wealth and is ready to invest something, is what finance instruments make good investments. The straight forward answer that it depends on what you have and what you need. how much you are willing to invest in, how much loss you can afford to incur just in case your investments fail to earn, how often you wish to generate returns or your return on investments (ROI), how long you want to keep your investments weather you can only afford to invest them in the shortest possible time or a few months to years, how you react to uncertainties in the market and how much access you have to information that you would need to monitor and manage your finance investments.
Investment masters may impress you with their secret methods about finance investing and will even publish a book on how its done, but the truth is, it's all a question of how much money you have and how much risk are you willing to take for your finance. Few realize that this premise is based on the most basic principle in finance, diversity makes a market. Diversity breeds different finance instruments with different features to cater to the different needs of a diverse finance investors.
Finance diversity have a lot to do with investment options. A regular employee and an executive have different finance investment options and how much of their money they can diversify. Their income can easily dictate how aggressive an investor they can be, the type of finance instruments they consider in their portfolio and the returns that they can reasonably expect. An average employee with little savings tend to invest in more traditional finance instruments like time deposits or a savings account. They tend to shy away from more sophisticated finance instruments like commercial papers or the stock market due to the potential risk of loosing their principle money.
If financial institutions describe you as a high net worth individual, you are in the highest pedestal of Filipino society. You have lots of savings and a high income allows you to have a high saving rate. This gives you the luxury of having a significant available invest able funds and a strong flow of new money coming in. Returns at par with Treasury bill rates like time deposits are too passive passive for these type of investors. They would invest in riskier finance instruments that offer higher returns and are ready in possibility of loosing their principle investment.