Investing is a Marathon

One on one with CFA Society of the Philippines President, April Lynn L. Tan, CFA

“Investing is a Marathon!!!”  That’s the first thing CFA Society of the Philippines, April Tan, CFA told me on the similarities of running and investing as CFA Philippines made its presence felt in the running scene with the highly successful Financial Fitness Run last February 23, 2014.  Financial Fitness Run not only gave the runners a fresh route to conquer but also some lessons that can make runners good investors.

Read about:

• Incoming: Financial Fitness Run

Financial Fitness Run

While most of you know me from my runs and races, I also live in the world of Finance so when I got the invite to meet up with the President of the CFA Society of the Philippines to discuss about the recently concluded Financial Fitness Run, I was excited to match wits with CFA’s Royalty.  It would also be my chance to visit one of my favorite subjects in graduate school which is Investments.  The fields of finance and fitness don’t meet often but there are a lot of similarities between the two.  The Financial Fitness Run was able to capitalise on the popularity of running to send the message that investing can be for anybody and promote awareness on investors rights.

Chartered Financial Analyst (CFA) Society of the Philippines is the local arm of CFA Institute, which is the global association of investment professional that sets standards for professional excellence and credentials. CFA is a title/certification earned after passing a 3 year program.   They promote ethical behavior in the financial markets and also have continuing education program to develop competent Financial Professional.  They also do their share in helping regulators in increasing their financial know-how through scholarship programs for government agencies and Finance Professor.  They promote financial literacy and investor rights both to members and non-members.

April Tan, CFA finished her first half marathon at Financial Fitness Run.

One of the goal of CFA on its 15th year is to capture a bigger audience with emphasis on Broader Mission, Bolder Voice and Bigger Community in an effort to be more relevant to more people.  This was one of the reason according to April that the CFA Society of the Philippines initiated the Financial Fitness Run and was the first to come up with this initiative among CFA member societies in the whole world.  Sometimes, people view the term investing with great technicalities that they avoid it instead of being aware of its benefits.  April Tan recaps the similarities of running and investing.

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• Have a goal – In running we can set a distance goal, or a time goal whether you want to do your first half marathon or finish 10K in an hour.  In investments, that goal can be like raising P1 million in 5 years.
• Have a plan – Going into your first half marathon, you start doing a program that builds your endurance with progressive long runs or if you have a speed goal, you start incorporating speed sets.  In investing, you have to determine how much you are willing to invest and your expected growth rate to meet your goal. You can vary your portfolio based on your risk appetite.
• Discipline / Consistency – Both requires discipline and consistency as you have to keep yourself focused on your training goals while in investing you have to stay away from unnecessary spending that can hamper your investment budget.
• Think long term – There are no short cuts in building endurance and that is also the case for investing, you earn more through time.
• Have mentors –   In running, gettng pointers from more experienced runners help you in achieving your goals and the same goes with investing as you’ll need inputs from finance experts and books to learn about the different investment vehicles.

CFA Society Philippines at Financial Fitness Run

Investing is a Marathon. It takes a process of learning and it takes discipline.  It can be for anybody and you also have to take baby step and invest time to master it.  A common way to invest was to reduce expenses, April gave an example of someone who consistently invested P3,000 monthly and in a span of a few years, the person was able to accumulate already P600,000 and is aiming for her first million.  It’s also important to diversify one’s portfolio as some investment can complement each other.  Among things to avoid, April says to avoid buying penny stocks or those we get just from tips.  We should also learn that we can’t consistently earn a lot but in the long-term, investment do earn a lot. I remember 5 years ago, the Philippine Stock Exchange Index was in the 2,000 level and now, it’s around the 6,300 level.  That’s a really big growth.

Among the highlights of the Financial Fitness Run was the signing ceremony of the upholding CFA Institute Statement of Investors Rights which aims to help retail investors make better decisions.  This calls for more transparency from financial professionals on potential returns of investments, conflict of interest as well as having access to research materials that they can use in making better decisions.

CFA Society of the Philippines was really happy with the positive response for the Financial Fitness Run with thousands of runners taking part in the race under the advocacy of upholding the rights of the investors when availing financial services.  This is a milestone for CFA Society of the Philippines being the first member of the CFA Institute to hold a run event and with the successful turnout, who knows, this may be a regional or even a global event.  Up next for them is the First Philippine Investment Conference happening on May 28, 2014.

It was a really nice conversation with April Tan about CFA, Financial Fitness and Running.  I did learn a lot from her and I hope I’ve been able to impart key parts of her interview through this post.  Have Fun Running and Investing!!!