Invest in stocks – Suze Orman

MANILA, Philippines - Amid low interest rates regime, investing in stocks and so-called exchange trade funds (ETFs) would be a wise choice, according to financial guru Suze Orman.

“I still believe that the place to be is in stocks, or exchange trade funds which you don’t have yet here that pay high dividends because interest rates are so low,” Orman said, in a press briefing.

She said the peso cost averaging (PCA) is also one venue for investment. PCA is a strategy that long-term investors use to invest in the stock market. It involves investing a fixed amount of money at regular intervals over a long period of time or about 10 to 20 years.

“I am also a fan of index funds rather than managed mutual funds,” Orman stressed.

“If people are investing especially when you are not educated in investing, I think it is far better off to go Philippine Stock Exchange (PSE) funds that are index funds and just put a certain amount of pesos in it every single month no matter what it does up or down. I think in the long-run you would probably outperform managed funds,” she added.

It is also important, she said, for investors to learn about fees and commissions.

The financial expert also underscored the need for the government to put more efforts on promoting financial literacy.

“What would be wonderful is to get government’s blessing on (financial literacy) programs that could be made available to everybody. That nobody would benefit. It would be sponsored by just one bank, it would be something really for the entire country to do. So we’ll see where it goes, see if they’re apt for that,” she said.

She said she would gladly help push for financial literacy among Filipinos.

“What should be done is to educate the people on how to invest but with an unbiased source. That the source has nothing to gain by telling them how to do it. That is why I would really like to be that person. I am honored enough to be so,” she said.

Asked what the Filipinos should do to be able to get a share in an improving economic growth, Orman said, “the goal simply is to have pesos, to have savings, so you feel safe.”

“So stop using the fact that you are not making money out of your money as an excuse for you not saving, eventually one day interest rates will go back up, one day you have interest again on savings accounts. But if you have saved certain amount of money, you have something to put in mutual funds, you can make even more money if you do peso cost averaging,” she said.

Orman has been called “a force in the world of personal finance” and a one-woman finance advice powerhouse” by USA Today.

She is also a two-time Emmy Award-winning television host, New York Times mega bestselling author, magazine and online columnist, writer/producer, and one of the top motivational speakers in the world today.