Ekl 51514 edward lee

COL FINANCIAL GROUP, INC.

2014 CHAIRMAN’S NOTESEDWARD K. LEEFounder & Chairman

INCOME- INVESTMENTS

The Formula for Financial Literacy

EXPENSES

Phase 1Does it work?

The 3 Phases of Investing

Phase 2How doesit work?

Phase 3Why can’t I

make it work?

RESOURCE: “Trading’s Biggest Secret” by Russ Horn

90% VALIDATION

7% SYSTEM

Phase 1: Does it work?

3% MIND


NASDAQ Tech Bubble

Global Financial Crisis through the housing bubble

The Great Depression “Black Monday”

Oil Crisis

The S&P 500 (1929-2013)

S&P 500 (SPY): 2011 - 2014

2 0 1 4 C H A I R M A N ‘ S N O T E S

Six coup attempts to overthrow then President Cory

Aquino

Asian Financial Crisis erupts

US Housing Bubble pops

PSEI (1987 - 2013)

PHILIPPINE EQUITY MARKETS (PSEI): 1995 - 2014

2 0 1 4 C H A I R M A N ‘ S N O T E S

STOCKS ALWAYS WIN IN THE LONG TERM

Investment in 1992 P1.0M

Range of Interest Rate 14.1% to 2.7%

Investment Value in 2012 P3.2M

Compounded Rate of Return 5.9%

EDWARD K. LEE / Founder & Chairman

Investing in Time Deposits vs. Stocks


BDOPrice/Share

P16.69

BDOPrice/Share

P72.80(as of 12/31/12)






BPIPrice/Share

P4.31

BPIPrice/Share

P95.00(as of 12/31/12)






Makati CBD per sqm in 1992 P70,000

Investment Value In 2012 P4.28M

Compounded Rate of Return

7.2%

Makati CBD per sqm in 2012

P300,000


Investing in Property vs. Stocks


Investing in Property vs. Stocks


ALIPrice/Share

P2.95

ALIPrice/Share

P26.45(as of 12/31/2012)

Investment ValueIn 2012 P10.79M


90% SYSTEM

5% MIND

Phase 2: How does it work?

5% VALIDATION


“ ”There is no correlat ion betweenthe success of a company’s operat ions and the success

of i ts stock in the short term.. .

“ G O L D E N R U L E S ”P E T E R LY N C H

“ ”... In the long term, howeverthere is a 100% correlation.

Earnings, earnings, earnings.

INVEST FOR PROFIT

CONTROL

The COL Easy Investment Program is among the services we offer that makes the peso cost averaging method easy to apply.

PESO COST AVERAGING

Investing a fixed amount of money

Into your favorite stocks

At regular intervals

Over a period of time


COL Makes Investing Easy & Simple

6

5

4

3

Peso Cost Averaging is a personal wealth-building strategy that involves investing a fixed amount of money at regular intervals

over a long period

Designed to reduce market risk by stretching out the purchase of stocks over time, buying more when prices are low and buying less when it is

high, effectively keeping your average cost down

PESO COST AVERAGING

1 2 3 4 5 6 7 8 9Month

Ave Cost per Share

You get to buy more

shares when prices are low, less

when prices are high…!

0 2 4 6 8 10 120.0

2.0

4.0

6.0

8.0

10.0

12.0

YEARS

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 420.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5How long will it take to make $1 Million

In millionsAnnual rate of return: 8.4%

Ending balance$2,879,369

$1,439,685

Annual contribution of $10,000

Annual contribution of $5,000

COMPOUNDING – THE 8TH WONDER OF THE WORLD

Thanks to the power of compounding, a 25-year-old investor needs to put away only $5,000 each year, earning an 8.40% average annual return, to have $1.4 million saved by age 65. And if he invested $10,000 a year, his money will grow to $2.9 million at retirement.

THE M IRACLE OF COMPOUNDING

Reinvesting dividends has been important, even over two long periods when stocks achieved virtually no appreciation: the 25 years from 1930 to 1955 and the 20 years from 1965 to 1985

60% PSYCHOLOGY

30% VALIDATION

Phase 3: Why can’t I make it work?

10% SYSTEM


Dow Jones Industrial Average (INDU) – All Data

MARKET VOLATIL ITY EX ISTS

- 41% - 50%

Philippine Composite Index (PSEi) – 2012-2014

MARKET VOLATIL ITY EX ISTS

- 25%- 20% - 14%

“You should, at minimum, expect stocks to fall at least 10% once a year, 20% once

every few years, 30% or more once or twice a decade, and 50% or more once or twice

during your lifetime.

”MOTLEY FOOL

2 0 1 4 C H A I R M A N ‘ S N O T E S

“Market crashes are NEEDED

to have HIGHER returns.

”2 0 1 4 C H A I R M A N ‘ S N O T E S

THE EMOTIONAL CYCLE OF INVESTING

OPTIMISTIC

ELATED

NERVOUS

FRIGHTENED

OPTIMISTIC

LOWEST EXPECTEDRETURN

HIGHEST EXPECTEDRETURN

HOW CAN I MAKE IT WORK?

THE REAL QUESTION SHOULD BE:

HOW CAN I MAKE IT WORK?

Understand the Basic Laws of Money:- Pay yourself first. (Save 20-30% monthly)- Invest only in businesses you understand and be

a part owner. (ex. AC, SM, JGS, AP)- Reinvest your dividends to benefit from the

power of compounding.

THE INDEPENDENT INVESTOR:How fees e rode pe r fo rmance .

$500,000.00

400

300

200

100

Based on $100,000 with a 6.5% Annual Return

10 Years 20 Years30 Years

1% FEE -

2%

3%

“You don’t have to be brilliant,only a little bit wiser than the other guys, on average, for a

long, long time.

”CHARLIE MUNGER

2 0 1 4 C H A I R M A N ‘ S N O T E S

Average Cost:Php 66.46

Total Investment:Php 81,749.60

Net Gain w/ Dividends:Php 38,173.80

THE STORY OF GILDO – OUR FAMILY DR IVER












Total Equity Value – Php 240,720.00Accumulated Contributions – Php 130,000.00


PSEI CAGR (May 2011 - Feb 2014) = 13.83% / yearEquivalent Annual Return for Gildo’s EIP = 47.64% / year


COL FINANCIAL GROUP, INC.

Thank you.EDWARD K. LEEFounder & Chairman

Business

Ekl 51514 edward lee