Economy 8 MIN READ

Building financial confidence in times of crisis

The public debt ratio is reaching the 60% threshold that is considered to be high-risk, but should you be worried?

December 22, 2021By Toto Tansingco, CFA

THE COVID-19 pandemic has been a painful experience for many people. We lost a lot of good people in this pandemic, and many more lost their livelihoods as a result of the lockdowns. For many Filipinos, the idea of investing their money during this crisis, when they could use it for more immediate gains, is nothing but wishful thinking.

But as they say, when there is crisis, there is opportunity. The new world that will emerge from this crisis will be very different from the world that we had when we came into it. The skill sets that will be needed will also be different.

Investment is a process and not a single act. Before you convince yourself to invest during a crisis, you must convince yourself to invest. Investment is a mindset. It is a process of committing your assets now for growth so that you will have bigger assets in the future.

Investment can take many forms: placing in time deposits, buying stocks, investing in bonds. But it can also mean starting a business, buying a house, protecting yourself with insurance, or getting an education. Every time you forego consuming and put your resources to work for future gain, you are investing.

It is never too early or too late to invest. It is also never the wrong time to invest. Once you have the investorsā€™ mindset, your eyes will be opened, and you will see opportunities all around you during a crisis as well as during normal times.

The most precious resource of all is time. If you do not have money to invest right now, use your time to learn and improve yourself. Learn about the stock market, the bond markets, the real estate market, or even the retail market. Learn how to program computers, learn how to sell, learn how to talk in front of large audiences, learn how to run a food business, learn a new language. Just like money, you can either consume time by using it in something that gives you present satisfaction, or you can invest it by using it to learn something new and better yourself. This is part of the investorā€™s mind.

You do not want to start learning about investments only when you do have money to invest. This is a sure way to wipe out your money. Prepare yourself now so that when you do have the money, you know what to do.

There are a few books I would recommend to get you started in your investment journey. The most influential books for Warren Buffet were theĀ Intelligent InvestorĀ by Benjamin Graham andĀ How to Win Friends and Influence PeopleĀ by Dale Carnegie. For a quick understanding about the market, I would recommend watching ā€œHow the Economic Machine Worksā€ by Ray Dalio in YouTube and reading his bookĀ Principles.

Once you have acquired all the necessary knowledge, itā€™s time to diversify your investments. Divide your investment portfolio into two parts, a safe part and the aggressive part. Most people should invest at least part of your portfolio in some aggressive investments. Otherwise, you will never accumulate wealth. Putting all your money in the safest investment is the most certain way to wipe out your wealth. Remember that every year, inflation is eating away our money. Did you know that soft drinks used to cost 25 centavos and the dollar was worth seven pesos?


In general, the younger you are and the more time you have left to invest, the more of your assets you can allocate to the aggressive part of your portfolio. Of course, this is over-simplified and factors such as investment knowledge, personal circumstances, and life goals can change what is safe and what is aggressive. For example, for some people, time deposits are the safe part of their portfolio and stocks are the aggressive part of their investments. For others, stocks are the safe part of their investments while cryptocurrencies are their aggressive part. It really all depends.

Also, try to resist following the herd or unattributed sayings. I was once told that a person should invest 100 minus your age in the aggressive part of his portfolio. In general, following rules of thumb are not the best way to structure your investment portfolio. Do not follow ā€œhot tipsā€ unless you carefully study the investment. When in doubt, donā€™t! If it sounds too good to be true, it is.

It is best to consult investment professionals such as our Investment Distribution Desk or Specialists in Metrobank branches and Metrobank Trust. We follow a strict process to find suitable investments for you, and at the same time help you increase your investment knowledge.

Open your minds to the changes that are happening and do not insist that the world will return to what it was before. Be prepared to do things differently. We have to be comfortable with technology. We have to be able to communicate clearly even if we are not interacting face to face. We have to decipher what will be needed in the new economy and prepare ourselves for it. This is valid for businesses as well as people. You do not want to own the biggest candle making factory when Edison invented the lightbulb. Reinvent yourself and acquire new skill sets. Use the time you have on your hands to improve yourself.

FERNAND ANTONIO A. TANSINGCO, CFA (TOTO) is the senior executive vice-president and treasurer of Metropolitan Bank and Trust Company. He has oversight of the bankā€™s financial markets sector covering treasury, wealth management, private banking, institutional investors, and asset management. He also currently serves as the vice-chairman of the board for AXA Philippines, and advisor to the board of First Metro Investment Corporation, and Metrobank (China) limited.

This opinion article is part of Metrobankā€™s Financial Education campaign series.


This article was first published on BusinessWorld.

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