Hope is back

News from the world's biggest economies suggest that they are on the way to a rebound. It seems the recession is over.

The Philippines felt the impact of the global financial crisis in October 2008 as exports decreased, manufacturing production dropped, the stock index declined and car sales weakened.

“Indicators on manufacturing, such as the value and volume of production index and capacity utilization rate, started to improve by February 2009,” Virola said.

NSCB data showed that the value of manufacturing output as of May reached 129.9 points based on 2000 figures after dipping to an eight-month low of 103.5 points in January.

Similarly, the volume of manufacturing output inched up to 75.1 points in May after falling to 60.3 points four months earlier.

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It seems the country recovered earlier than anticipated.

Professionals in family businesses

By Farida R. Pangan, Ma. Regina M. Hechanova, Edna P. Franco, Ricardo H. Mercado, Carmelo V. Lopez

Professionalizing is almost inevitable for many family businesses. As a family business grows, many founders realize they cannot do everything by themselves and need help.

Professionalizing in family firms may occur by developing family members, growing people from within, or bringing in outside professionals. Although there is a preference for keeping leadership within the family, it appears that bringing in non-family members is a requirement for family businesses that wish to ensure long-term sustainability.

Ateneo Center for Organization Research and Development carried out a study to compare the work attitudes of non-family professionals in family and non-family-run business.

A total of 206 professionals from family and non-family-run businesses participated in the study. The results of the survey revealed that workers in family-run businesses are more satisfied with their careers and more committed to their organizations compared to employees in non-family businesses.

Managing professionals

Growth and entry of management discipline are vital elements in the long-term sustainability of any organization. However, one outcome of growth and the installation of management discipline is an increasing sense of becoming impersonal.

The challenge for family businesses then is to keep the culture personal even as they professionalize. At the same time, the challenge for non-family businesses is to cultivate a familial culture amid management discipline and formal structures. How can organizations do this?

Communicate desired culture. An organization’s culture is typically established by the actions of its founders. Leaders can sustain a culture by constantly communicating and enacting their vision of the future.

Role-modeling. Culture tends to be implicit. Many times, newcomers learn it from actions of others. It is therefore important that leaders and key people propagate this culture by being role models. Showing genuine care for the well-being of organization members sends a strong message that this is important to the company.

Preserve rituals and history. Because culture is intangible, it usually lives in the memories of its founders and employees. One way of propagating culture is by celebrating milestones, observing important rituals, and sharing stories.

Provide venues for interaction. As organizations grow, it becomes increasingly difficult to maintain a sense of family if only because there are fewer opportunities for everyone to get to know each other. Company activities are important in building a sense of community.

Challenge

Get people who will fit in. Another approach to sustaining culture is by selecting individuals whose values are aligned with the organization.

Reinforce culturally consistent behavior. It is important to reward behaviors consistent with the desired culture. If teamwork is an organization value, employees and managers should be measured and rewarded for their ability to demonstrate this. Also, paternalistic cultures tend to provide benefits that see to the welfare not only of the employees but their families as well.

The results suggest there is something about the culture of family businesses that resonate well with workers, leading to job satisfaction. This poses a challenge to both family and non-family firms to keep a sense of family intact even as the organization professionalizes.

(Pangan is an MA Industrial/Organization Psychology graduate of the Ateneo de Manila University. Hechanova, Franco, Mercado and Lopez are faculty members of the Ateneo de Manila University. This article is an abridged version of a study featured in the Ateneo CORD’s book, Leading Philippine Organizations in a Changing World [Ateneo de Manila University Press, 2008]. For feedback, please email ateneocord@admu.edu.ph)

Source: Inquirer.net

Some of the Best Mutual Funds For 2009

Maintaining a solid investment portfolio can be hard work. One alternative to the difficult work of stock selection is to invest in mutual funds. With thousands of mutual funds to choose from, how can you tell which ones are the best?

That's why I have compiled a list of the 7 Best Mutual Funds for 2009. After researching the performance, stability, and income of hundreds of top-rated funds, I found the best mutual funds to invest in for 2009 and beyond.

Income-Dividends

One part of my selection process was to find mutual funds with cash flow, either through dividends or bond interest payments (in the form of dividends for mutual funds). This factor is becoming ever more important during a time when stocks continue to decline. Through dividends you can know that you will have an income of the yield percentage.

Future Trends

Another selection criteria was to find mutual funds that are going to perform well for years to come. As you will see, I have included a mutual fund that invests in stocks of alternative energy or "green" companies. The whole environmentally-friendly, green movement is just getting started and will be a boon to the economy for the next 10-20 years. One aspect that is somewhat more of a near-term strategy is the gold focused fund because of the predicted rise in the price of gold over the next year or two.

Long-Term Performance

The last and most important selection criteria was the long-term performance of the mutual fund. Any one stock or mutual fund can perform well over one or two years by luck, but it takes true skill to manage a portfolio that has good returns over a ten year period. A major failure of many investors that buy mutual funds is that they chase the fund that is currently performing the best or just recently had its best year. If the mutual fund is having an unbelievably great year, then either stay away from it because it's too late or sell it if you own it.

The 7 Best Mutual Funds for 2009:

1. American Century High-Yield Fund (AHYVX)

- With the current state of the economy, your best bet for making money is finding an investment with a stated income (i.e. dividends, bond interest payments). American Century's High Yield Fund has a dividend yield of 9.38%, which is much larger than most high yielding mutual funds or stocks.

2. The New Alternatives Fund (NALFX)

- this is the perfect mutual fund for times when people and companies are looking for environmentally-friendly ways of doing things. This mutual fund invests in companies that focus on renewable energy sources, as well as companies that are concerned with energy conservation and environmental protection. Over the next decade green and alternative energy stocks will most likely sky-rocket with gaining popularity and necessity.

3. Franklin Utilities Fund (FKUTX)

- A utilities fund is also a great way to get a flow of decent income during a time of poor stock performance. This mutual fund has a dividend yield of 4% and a 10-year annualized return of 5.17%, which is very impressive. Utility companies are a solid investment for having a stream of dividend income.

4. ING Corporate Leaders Trust Fund (LEXCX)

- Although its 10-year annualized return has been hurt by the recent stock market downturn putting it at 3.67% (which is better than all but two main value strategy mutual funds), ING's fund has performed 10% better than the S&P 500 over the past year. It also has a dividend yield of 2.46%.

5. Franklin Gold and Precious Metals (FKRCX)

- This mutual fund has been a top performer over the past decade with a 10-year annualized return of 14.42% and a current dividend yield of 8.34%. This mutual fund has performed amazingly, and it will continue to perform with gold becoming more of a flight-to-safety investment for investors.

6. Vanguard Energy Fund (VGENX)

- although the commodities boom of earlier this year has faded, oil prices will come back. It is only a matter of time. Vanguard's Energy Fund has had a 10-year annualized return of 14.81%, which is better than most mutual funds of any kind. It is positioned to perform well over the next few years.

7. Municipal Bond Fund (of your choice)

- municipal bond rates have gone up in recent months and continue to be a great source of extra income. For example, some bonds in Florida are paying 6% a year in interest. Remember with municipal bonds that interest payments are tax-exempt; just make sure you pick a bond that is within your state (otherwise interest payments become taxable). How does a tax-free income of 5% or 6% on your investment sound for 2009- with the U.S. still in recession?

What you should NOT do in times of recession

Or even in times of plenty...whatever that means.

1. Becoming a Cosigner or guarantor. Cosigning a loan can be a very risky thing to do even in flush economic times. After all, if the individual taking the loan doesn't make the scheduled payments, the cosigner could made to pay them. It happened to me once, and I will do it again.

2. Getting Into an Adjustable-Rate Mortgage. Some individuals may choose to take out an adjustable rate mortgage (ARM). In some cases, this move might make sense. After all, as long as interest rates are low, the monthly payment will be low as well. But in times of difficult economic conditions interest rates could go sky high and this could affect your financial planning and situation. Think about it... hard.

3. Getting New Debts. Taking on new debt (such as a car loan, home loan or similar obligation) may not be a problem in good times if the individual makes enough money to cover the monthly payments and still has extra funds to live on and to save for retirement. However, what happens if the individual's livelihood is adversely affected in the midst of the economic turmoil? What happens if the borrower is laid off?

4. Taking Your Job for Granted. During an economic slowdown, it's important to understand that corporations, even large ones, may be under financial pressure. This is really a no brainer...so take care of your job.

5. Taking Risks With Investments. Business owners should always be thinking about the future. They should always be thinking about new and exciting ways to grow their businesses. However, an economic slowdown may not be the best time to make risky bets.

6. Not cutting back on anything and many things. In short, do not be wasteful.

How to make your money work for you

The concept of working usually puts us in the service of our money, meaning that we have to work for it, and that is fine with me and most of the people around the world.

However, within this work-money equation we often allow one of the players to be lazy and unproductive: our money.

Indeed, after we work so hard to earn our money, we usually go ahead and spend it all or we simply park it at a near zero interest bank account.

We do that because -as I used to in the past- we tend to think that it is of no use to be investing money if all we have is a few bucks in our pocket, and nothing can so far from reality.

The trick to make money investing thus putting your money to work -and work hard for you- is not to have $100,000 to spare in fancy investments, no, the trick is to start as soon as you can with a little amount of money and an investment option that ensures a high return.

You see, when you invest, even if it is a little amount of $400, and you start getting high monthly returns on that investment, your money will become like cannibal feeding on itself to grow exponentially into a larger and more capable animal.

This is what is called the compounding effect, which will allow your small investment to become a small fortune sooner than you think. For instance, let us imagine that you manage to achieve 20% monthly return on your $400 investment, well, in 12 months you would have $2,972.03, in 24 months you would have $26,498.95 and in 36 months you would have 236,267.29.

And even if it is less than that, I think you still get the picture. All you need to get your money to work for you and achieve true and sustainable wealth, is commitment to set aside a little amount of money to invest, some time and a reliable investing tool to help your investment perform according to your expectations.

Indeed, not only will you need a small amount of money and some time to let it grow, you will need to have a solid investing toolbox to help you manage your risk and be profitable from day one. Nowadays it is technology providing the edge to both amateur and professional investors, so placing yourself ahead of the pack is key to successfully managing your investment for a consistent growth.

The vanishing load now over...

Thanks...largely to Sen. Juan Ponce Enrile.

If there is one thing, he has done, that is important to me and to many people is that: the vanishing load is now over by July 19.

I used to load my smart cellphone with P30, I used only maybe 10 sms..and when I tried sending again after a day or two..the load is gone, psstt....it is money gone...without me using it!!! The telcos claim is...it expired! WTF!

The good news is:

So now the National Telecommunications Commission (NTC) is tripling the shelf life of prepaid cellphone load. Effective July 19, prepaid load will have the following shelf life:

P10 to P50 load: 15 days

more than P50 to P100: 30 days

more than P100 to P250: 60 days

more than P250 to P300: 75 days

Text spam or unsolicited promo texts will also be banned, and this will take effect on July 23.

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Hurray Senator Enrile....the people loves you, lol!

Despite Crisis Investments in the Philippines surge 154%

The BSP on Friday reported a surge in foreign direct investments in April, saying that, even with an economic crisis in full swing, the country somehow managed to regain the confidence of foreign investors.

According to the BSP, net inflows of FDIs amounted to $601 million in April, up 154 percent from only $236 million in the same month last year.

Gross FDI inflows during the month, it said, amounted to $639 million while gross outflows reached only $38 million.

One of the biggest sources of FDI inflows in April was the equity infusion of Japanese firm Kirin Holdings Corp. into beverage giant San Miguel Brewery. Kirin’s interests in San Miguel went up to 48.3 percent after it acquired an additional 5.05-percent stake in the company for P6.89 billion ($143 million).

The country’s performance in attracting FDIs in April brought total net inflows in the first four months of the year to $648 million, up 29 percent from $502 million in the same period a year ago.

“The rebound in FDI flows, given the difficult global economic conditions, reflected foreign investors’ confidence in the country’s macroeconomic fundamentals,” the central bank said in a statement.

But.....but.....the big but is:

Exports continued to decline in May, with earnings sliding by 27 percent to $3.087 billion from $4.225 billion in the same month last year.

Merchandise exports registered the eighth straight month of decline in May, although the rate for the month was better than the -32.5-percent year-on-year contraction seen in April.

The National Statistics Office said in its latest report on exports that the value increased on a month-on-month basis by 10.1 percent from the $2.803 billion seen in April.

In the first five months of 2009, cumulative earnings declined by 34.5 percent to $13.814 billion from $21.096 billion in the same period a year ago.

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So what's your take on this info? Signs of recovery or what?