What ANIMAL are you in the stock market?

Below is an excerpt from the book The Turtle Always Wins. It's a tiny book by Bo Sanchez relating a story about four animals pointing to four types of participants you  see in the stock market. It's also his second book tackling the specific subject of investing in stock market, the first being the My Maid Invests in the Stock Market... and Why You Should Too!

Find out what animal best fits you.

***

The Four Animals in the Stock Market

Let me introduce you to the four competitors in the race.

1. Squirrel, the Typical Trader

2. Rabbit, the Trained Trader

3. Sloth, The Typical Investor

4. Turtle, The Trained Investor.

Let's start with Mr. Squirrel.

Squirrel, the Typical Trader

Squirrel represents the newbie who gets into the stock market without understanding what he's getting into. 

Squirrel also represents the old-timer in the stock market like the uncle of Julius. He's never learned his lesson. He earns some and loses some. It's true that this uncle of Julius is a wealthy man. But Julius never asked this important question: Where did his wealth come from? He presumed it came from the stock market.

But that wasn't true. His uncle was a businessman. He earned his money running a big hardware store for the past 25 years. Here's the truth: if he wasn't trading foolishly, he would have been richer.

Squirrel represents the 85 percent of people who get into the stock market - and lose their money.

On Hot Tips and Penny Stocks

Squirrels want excitement.

They look at their stock portfolio every day. Usually, many times a day. They're ecstatic when they see their money go up. And they're depressed when they see their money go down.

Like the squirrel in my story, they have so much energy, these typical traders buy now and sell few days later. Sometimes, they buy and sell within a day.

And like the squirrel that doesn't follow the road, typical traders don't follow the rules. Because trading for them isn't a science but an art. It's all about gut and feeling.

At the end of the day, most traders are really gamblers. Sadly, they're using the stock market as their online casino.

As I mentioned above, 85 percent of people lose money in the stock market. (And that's a fact.) Because most people who get into the stock market are squirrels.

Squirrels also try to take a lot of shortcuts. They want to make a quick buck.

They hear a hot tip from an uncle or an officemate or a friend and buy the stock.

Sometimes, they earn a lot. When that happens, it feels like they're winners in the race.

But that's not really true.

Because growing your money isn't a sprint but a marathon.

At the end of the day, all that they earned in the past, they lose in a couple of bad trades.

Nothing is left.

Some Traders Are Devious

That's not all the bad news.

A few of these traders, like the  squirrel in the story, are devious. They fool other traders. He told the rabbit to sleep and he pretended to sleep, too - only to escape and run.

Some bad traders tell their friends to buy a certain hot stock, just so that the price will go up. Once it's up, they'll sell, leaving the others to hold an empty bag.

Yes devious squirrels may become rich.

But what kind of wealth is that? In the end they lose all their friends.  That doesn't sound very wealthy to me.

Here's the truth.

In the story, the squirrel got lost in the forest and was killed by a bear. Typical traders also get lost in their trading and get killed by a bear market (that's what you call a market that is going down).

And then there is Rabbit...

Rabbit, the Trained Trader

Rabbits are also traders.

But they're trained traders.

Most of them do nothing else but trade. Trading is their full-time job. For them, trading isn't an art but a science. They follow very strict rules.

Like what rules?
Trained traders don't touch penny stocks with a 10-foot pole. They only buy the stocks of giant companies.

Another rule? Trained traders don't put more than five percent of their money in a specific stock. So if it sinks, at least it's only five percent of their money.

Another rule? They never end a trading day with more than 30 percent of their money in the market. They don't like to be surprised. Trained traders are very conservative.

These very strict rules prevent two things: big losses and big gains. Buts that's fine with them.

That doesn't mean rabbits don't do foolish things. Even if they're trained traders, once in a while, some of them break thr rules. After all, they're still human beings. The temptation to gamble is still there - and with all the tools at their fingertips - they occasionally break the rules to earn the fast buck.

Are There Really Trained Traders Out There?

Is it possible to become a very good trader? Like the rabbit who actually finishes second in the race?

Yes. Sightings of these very rare creatures have been reported on planet Earth.

I know of a few of them myself.

For example, my stock market mentor has trained 40 plus highly skilled traders. He cherry-picked them from the best schools. He made them go through rigorous training.

My mentor gave his team of traders a modest goal: To earn 5% a month or 60% a year.

Why such a "small" goal? I mean, if these are great traders, shouldn't they be earning more - like 200 percent a year?

Because they're Rabbits. Not Squirrels. They follow rules - rules that prevent big losses and big gains.

I'm sure you know by now that I discourage anyone to become a trader, especially a Squirrel Trader.

But if some of you really want to enjoy the excitement of trading - to be able to brag about your stock market exploits to your friends - then be sure to be a Rabbit Trader.

Some of my friends have what they call "play money." It's 20 percent of their total money in the stock market. That's what they use to trade. But the 80 percent is what they use for long-term investments, using the Turtle Strategy.

So they're a crossbreed. They're 20 percent Rabbit and 80 percent Turtle.

If you want to do that, go ahead. But I urge you to study about trading seriously. Your play money is still money.

***

In market times like this, many are tempted to be trading.
Just like what's mentioned above, make sure you have the skills and knowledge that will make it work for you.

Have fun investing (or trading with strict rules).

Omeng

PS: January 9 is the deadline of  super early bird discount to our Practical Money Management + How to Win in Philippine Stock Market Seminar! seminar. Learn

• How You can PROTECT your capital in these times
• When You should take PROFITS
• When You should cut your losses
• How to Hunt BARGAIN stocks
• Know the STOCK PICKS for the year
• and a whole lot more! 

Click here for details and bonuses.

PS2: We'll have our free newsletter coming. Hang around for future announcements. :)

PS3: For beginners, start reading this book Bo Sanchez' My Maid Invests in the Stock Market... and Why you should, too!

How to Outsmart Your Debts And Make Your Creditors Love You for Doing It

Below is a guest post about dealing with credit card debts by Joy Collado.
Read on and pick up the trick that applies to you.

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Almost everybody is plagued with bad debts. While it can be overwhelming and stressful to pay a ton of debt, the act of paying them is an honorable act.

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There is a lot of people who would run away from this responsibility. This will not  help you with your financial burden. As a matter of fact, you'll lose your credibility making it hard for other people or institutions to trust you again.

Below are methods on how you can outsmart your debts without being an irresponsible debtor. In fact, creditors will love and trust you for doing this.

First, list down all your debts and take note of their interests.

a. Pay the smallest amount first.

Since it's the smallest, it's the fastest one you can zero out. You can even opt to pay this in full right away if you have the budget. Or you can pay this in big chunks while paying the minimum amounts of the remaining debt.

If your debts are from credit card companies, minimum payments are allowed. If these debts are from personal acquaintances or friends, talk to them and sincerely ask them to allow you to pay in minimum payments for the next couple of months. Tell them you are sorting things out and remind them you are true and firm in your promise to pay. A lot of times, creditors just want an assurance that you won't run away so give them that assurance.

If you do this, be sure to keep your promise.

If you ever fail to pay the agreed minimum amount, don’t shy away and disappear! Talk to your creditors and assure them you are still willing to pay. The last thing you want your creditors to think is you’re running away from your responsibility. 

When you've finally paid the smallest amount, pay the next bigger amount in line. Do this until you've paid everything.

b. Pay the one with the highest interest.

It makes perfect sense if you opt to pay first the one with the highest interest as this will contribute to the bulk of the debt. Pay big chunks of this debt and pay the minimum amounts of your other debts with smaller interest rates . After that, you can opt to pay the next one with the second biggest interest rate until you've paid everything.

c. Distribute your income proportionately among your debts.

For example:

Debt A 10,000     17%

Debt B 20,000     33%

Debt C 30,000     50%

Total   60,000    100%

Suppose you have a budget of Php 10,000 each month to pay your debt. With this example we have the following monthly payments:

Debt A  1,700

Debt B  3,300

Debt C  5,000

With this method all your debt will be zeroed out all at the same time.

A lot of people would argue that Method B is better because you're paying first the amount with the highest interest. While some say the Method C is more efficient because you're not leaving anything behind. 

There is no right or wrong method. Choose the one you are most comfortable with, especially the one you can stick to.

At this point, the most important factor is your willingness to pay and you're making steps to fulfill your promise to pay. Don't get stuck on which method to use or you'll end up messing with Math and with your finances. What matters is taking one step at a time to financial freedom.

Joy Collado, Freelance Writer
www.joybcollado.com

 ***

PS: If you also want to share some lessons about managing finances and growing one's wealth, just reply to this if you want to guest post. Don't just contain that wisdom in yourself. Let the world benefit from it.

PS2: Deadline of Early Bird Discount to our Know when to buy and sell seminar na this July 28.
Click here for more details.

If you want to know how to use  and maximize the charts and technical guides reports you see on your brokers,  Bloomberg, ANC, and other news channels to make wise investment decisions, you need to learn technical analysis.

Learn how to recognize chart patterns and signals to buy and sell stocks and know how apply it in your trading decisions and make profit in a volatile market.

 Reserve your seat now by sending an email to pinoyinvesting@gmail.com.
Click here for details and bonuses! 

PS3: For beginners, start reading this book Bo Sanchez' My Maid Invests in the Stock Market... and Why you should, too! Isang upuan lang yan kaya go na.

Dream big  then start small.
Dapat talaga start small para pag nagfail (which is usual for beginners) e fail small ka lang. But you learn BIG.

Email mo ko dito pag may tanong ka pa pano magstart.

Tapos if you've been reading my blog for some time, help me help you better.

I'd  need your inputs to come up with new posts/tutorials (whatever) that you think will be helpful for you. Do me a favor by answering this quick survey - one question lang and you're done.
 

Let's all make our part in making a better Pilipinas.
That's essentially the message of our dear president in his SONA yesterday.

Support support din pag may time.

What Kind of Future Do You Want?

Below is an excerpt from Bo's book Choose to be wealthy.
May this story remind us that we have the power to create the life we want.

Let's all use that power.
May the force be with you!
Enjoy the end of this week!

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***

“Bo, we’re torn between loving my mother and loving my kids.”

My friend Pam was talking about her aging mother and her two daughters.

Her mother was 63 years old and very sickly. Since her father died, Pam’s mother has been living with her for the last two years.

“Bo, we’re not rich. But last month, we spent more than P12,000 for my mother’s medicines. Again! I wish my two brothers and other sister take care of her, too,” she

said, her voice trembling. “My husband doesn’t complain but I’m sure he doesn’t like it. We have two daughters and we sometimes can’t buy them things for school because of Mom.

Yesterday, my daughter asked me again if I could buy her a computer — but I told her, ‘Sorry, we can’t,’” she paused to breathe, fighting back her tears, “‘because grandma needs our money.’”

“Have you asked your brothers and sister to help out?” I asked.

“We fight about it a lot. Over the phone. Emails. I tell them to let our mother stay in their homes. That it’s their turn. But they tell me they can’t afford it, too.”

“I see.”

“Bo, the sad thing is that Mom feels it. She knows wedon’t like her at home.”

“Why do you say that?”

“I just know. Perhaps she overheard us fighting. Sometimes, she talks about dying so that we won’t be burdened anymore.”

 What If We Can Go Back in Time?

What if this 63-year-old grandmother read this book when she was in her 20s, 30s 40s? The situation would have been totally different.

Dramatically different.

Because she and her husband could have saved 20 percent of their income every month and invested it in the stock market, mutual funds and other investments.

By age 63, she would have had P10 million.

She’d be living comfortably in her own simple house.

She’d be paying for her own medicines and doctor’s fees.

With her own money, she’d have hired a full-time caregiver and house help.

Every weekend, her children and grandchildren would visit. The grandkids would love going there because there’s always delicious food prepared for them.

During those visits, her four children would “fight” for grandma to stay in their home. “Mommy, you always  stay with my sister,” the younger one would say, “ Why don’t you also stay at my house?”

Once a year, grandma pays for a big family vacation for all her children and grandkids. Last year, they went to Vigan. This year, they’ll be going to Batanes.

Thanks to grandma, everyone looks forward to this big break.

Now I ask you: What kind of future do you want?

 ***

Have fun investing (and creating the future we want)!
Omeng

PS: You asked for it, you got it!

As some have requested, we're extending the Super Early Bird discount to our Technical Analysis seminar until Sunday July 21.
After that, price will shoot up from 1997 to 2497. This seminar aims to teach you how to forecast stock price based on charts formed from historical prices.
If you want to know how to use  and maximize the charts and technical guides reports you see on your brokers,  Bloomberg, ANC, and other news channels to make wise investment decisions, you need to learn technical analysis.

Click here for details and bonuses.
Few seat left so reserve your seat now.

How to know when to sell your stocks

So when should one consider selling their shares in the stock market?

 

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During the last seminar we had, below are some points shared by the speaker Aya Laraya about selling:

1. Do not sell out of boredom.

2. Sell when you reach your target - That's why you need to have a plan for every buy you make,

3. Never use long term investing as a security blanket. 

I think this is the most common scenario we see. When they see their losses are already big, they cannot accept that they just made a mistake so what's supposedly a trade suddenly becomes an investment. They pat themselves and say "Long-term naman e".

I was actually once like that. Simply put, don't be a convertible shareholder.

So for those who are still mustering the courage of selling your stocks at a loss, Aya stressed out the

possible reasons why to do so:

1. If a company consistently underperforms.

2. If there is a fundamental change in the company/industry

In the end, he gave below thoughts to ponder on:

1. Know what you want to accomplish

2. Ask your broker, get information

3. Don't rely on tips  -make your own decisions

4. Long term does not mean not monitoring

 

Finally, here's an insightful article by John Mangun about the importance of Knowing when to walk away.

For him,

It is not the “picking” that makes money; it is the selling at the right time to take profits, or perhaps more important, to protect your capital. Selling is the hardest decision an investor must make.

Do you agree?

For those who have been selling, what are your triggers to do so?
Please share them below!

Have fun investing (and knowing when to sell)!
Omeng

PS: TODAY is the last day of super early bird payment for our next seminar - Know When to Buy & Sell Using Technical Analysis. Click here for details and bonuses! After today, price shoots up from 1997 to 2497.

If you want to know how to use  and maximize the charts and technical guides reports you see on your brokers,  Bloomberg, ANC, and other news channels to make wise investment decisions, you need to learn technical analysis.

Learn how to recognize chart patterns and signals to buy and sell stocks and know how apply it in your trading decisions and make profit in a volatile market.

 Reserve your seat now by sending an email to pinoyinvesting@gmail.com.
Click here for details and bonuses!

Philippine Stock Market Updates

Just some quick market updates for you:

If you're following COL's model portfolio:
COLing the Shots: The Philippines will not be found naked report (July 10 issue) has updated its composition into below:

Click here for the full report.

Truly Rich Club guestimates that there will be 6 More Months Of Sideways Movement. Here's an update from Bo:

I’ve told you this before, but I have to say it again.

Because some TRC members are getting impatient.  One young woman told me yesterday, “Bo, I’m losing so much money in the Stock Market! When will it start going up?  When?  When?  WHEEEEEEEN?”  (By “losing”, she meant “paper loss” because she’s a good girl; She said she’s following our strategy by not selling but buying during times like these.  But emotionally, it can really be tough.)

Let me remind you our best guess: We have possibly 6 more months of sideways movement.  That means 6 months of up, down, up, down roller coaster ride that won’t go anywhere.  Which is the BEST NEWS in the world next to free ice cream on a hot summer day.

Can you imagine?  6 months of buying cheap stocks?

Yipeeeyabadabadoooooooo!

By next year, the bull will return.  And you’ll see all the money youinvested in these next 6 months rise up to the moon.

That's good news for those accumulating for more. Just stick to SAM and forget the useless noise around.

If you're more into trading though, I just checked the latest Technical Guide from COL Financial and found out that most of their recommendation is now  SELL INTO STRENGTH.

Click here to see the full report.

So what to follow?

Ask yourself: What' was your goal? What was your plan?

Have fun investing (while it's still fun),
Omeng

PS: Deadline na tomorrow for your super early bird registration to our Technical Analysis Seminar.

Click here for details.

Get exclusive access too to to our Mastery Group as bonus plus 1 year FREE email consultation and 6 months complimentary stock analysis from the speaker Mr. Ricky So.

After tomorrow, price will shoot up from 1997 to 2497.
Email pinoyinvesting@gmail.com for reservation.

PS2: For beginners asking how to start investing, begin by reading this book Bo Sanchez' My Maid Invests in the Stock Market... and Why you should, too!
Isang upuan lang yan kaya go na. 

Why that book?

I myself started with that tiny book.
It talks not just about investing kasi, but introduces you to concepts of personal finance management as a whole.

Talking about emergency fund which is a requirement before you should ever buy your first stock.

Click here to download.

If you're done with that, read this instead to help you convert your lessons into actions.

How to make stocks a source of your wealth

Below is a helpful post by Ricky So from his blog rickysogood.com.

It's a good article tackling the most common questions and concerns about starting investing.
It's also a good starting point if you've been thinking of inviting your friends and relatives into the stock market.  As you know, some of these people may actually just have to be presented with some sound guidance before they can give their first shot.

Read on and grab some ideas into making more fellow Filipinos become smart investors.
Let's all take our part!

Have fun investing (for a better Philippines)!
Omeng

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***

Stock Investing - A Source of Wealth

When I talk about getting wealthy or achieving financial freedom, a lot of people will be interested, all ears are on me. However, if I start talking about stocks, I seldom see a receptive face. It is natural to be receptive to the topic of getting wealthy or building wealth, this is our life long pursuit anyway. While there are so many ways of getting wealthy, one effective way to grow wealth is thru stock investing.

But, the fact about stock investing is that very few Filipinos appreciate it. Despite the stellar rally of the stock market in 2009 until 2012, very few opened an account with a stock broker. Out of more than 90 million Filipinos? Why is this so? Perhaps there are a lot of reservations against it. Unfortunately, not everyone know that one identified source of wealth creation is thru stock investing.

Below are some of the reservations I encounter about stock investing:

• “I don’t know anything about stocks.”,
• “It is so complicated?”,
• “It is so risky.”,
• “I don’t have so much money to invest.”, etc.

You want to learn stock investing? It is easy to learn if you want to, there are free and paid seminars to attend and there is an available literature about it. Especially, in this day and age of computers, accessing information is very easy. There is a primer available at the PSE website, www.pse.com.ph. Also, simply ask around.

Complicated? Not really. Buying stocks is like buying anything of value, a commodity, a shampoo, food product or even a property. It requires some evaluation of sort before buying. Isn’t it that you look at price of the goods you will buy, then, look at the ingredients and nutritional facts before actually paying for it? That to me is called evaluation or analysis. Apply the same into stock investing.

Risky? This depends on how you look at it. I haven’t seen an investment that has no risk! If there is such, it is most likely a scam. An investment without risk that promises good returns is a scam. The so called risk aversion of many has put themselves into being victimized by such schemes. However, there are some people who still look for these types of schemes. If you are pessimistic, you will see the risk as a negative. But, if you are optimistic, you will see the return of the risk you are dealing with. Remember, most wealthy people took the risks and are optimistic in what they do.

Lack of Money? Stock investing can start with as small as Php5,000.00 contrary to the popular belief that it requires huge capital. Moreover, the said amount can buy shares of 3 to 4 companies listed in the Philippine Stock Exchange (PSE) or the local stock market.

The real concept is getting into stock is like getting into a business. We know for a fact that another source of wealth is getting into business. But, this business of stock investing is like “partnering” with the existing businesses. Some of which, you currently patronize. Say, Jollibee, how much do you think you have spent dining with them? You patronize their products and services, most birthday parties are held in their premises. So, you are actually contributing to the profitability of Jollibee by patronage. You can see that their business is viable and will last a long time and conquer new territories. I bet you want to own a Jollibee franchise. You can, by simply buying Jollibee stocks, and you become a part-owner, they call it a stockholder. In 2002, Jollibee shares traded at about 15 pesos. Today, it is trading at about 100 pesos. An almost 500% gain over 10 years isn’t bad. Notwithstanding, the cash dividends they declared annually.

Don’t go out right now and buy Jollibee shares. This is only an illustration and a sample to prove my point that stock investing is a viable wealth building idea. Remember, learn it first.
We Filipinos are trained to be employees and at the latter part of our career or during the mid-point when we have earned a substantial amount , we shift to business. I say, being an employee isn’t bad, but, being into business while being employed is a much better idea. How? One way is by simply investing in stocks while building a career. Learning this only upon retirement is a risky situation.

Stock investing is another source of wealth. Its beauty lies in its simplicity and complexity. So simple because you buy and sell paper or financial assets called common or preferred shares. Simple because, you need not monitor it closely unlike having your own business, as a matter of fact, somebody else is managing the business for you. You can monitor it anywhere thru online trading platforms of some stockbrokers. You can start with a small amount. You can build it up over time by investing regularly. On the other hand, its complexity provides challenge and when learned, it becomes a lifetime edge and a skill that is widely valued.

As a closing, perhaps, you will say, stock investing is not for me. Maybe……… but, this I will say, “Kapag ayaw, maraming dahilan; Kapag gusto, may paraan.” Becoming wealthy is a choice and rarely a chance. To me, I have chosen stock investing as THE option.

***

PS: Start growing your wealth by attending our next seminar - Practical Personal Finance + How to Win in Stock Market.
Click here for more details.

Super-early bird fee ends this January 9 2014 na.

 

Limited seats only so  reserve your seat now.

Get more details and bonuses here.

PS2: For beginners, start reading this book Bo Sanchez' My Maid Invests in the Stock Market... and Why you should, too! Isang upuan lang yan kaya go na.

Dream big  then start small.

Email mo ko dito pag may tanong ka pa.