Why You Should Have a Plan in Investing

Here's another investing story to teach and inspire us in growing our money in Philippines stock market.

It's a personal account of Wilms Tumor, one of our investing tips & tricks group member on how he started investing in Philippine Stock Market, his struggles and his lessons. 

In just less than a year in a stock market world, he already has baskets of lessons we can learn from.

Truly experience is our best teacher, whether from our own or from others'. 

Btw, he's an internist and gastroenterologist currently affiliated with De los Santos-STI Medical Center, Megaclinic, and Veterans Memorial Medical Center. So better read this to know if there's something wrong inside you!

Enjoy!

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I have been into time deposits, UITFs before but the return is minimal. Most of the bank employees cannot even answer my questions on how I can maximize profits from my savings, worse some even can’t explain their products such as mutual fund and how it works. I receive a monthly statement of account from BPI including charts for the fund which I could not even understand.

My brother was trading in the stock market for several months before I did after having been encouraged by his officemates. During his day-offs, he would buy and sell but a change of work schedule kept him from monitoring the stock market. After all my training and exams last October, he handed me his copy of the swing trader. The pages and terminologies were strangers to me having been in the healthcare for almost a decade now. Having started analyzing the charts made me asked myself the purpose for buying stocks except for expecting higher profit as compared to the mutual funds & time deposits.

I opened an account with BPI Trade but I also bumped with Citiseconline (COL) which received positive feedbacks with their investment guides/ reports. My first buy was MPI with COL EIP last Dec then BDO with BPI Trade. My first online fund transfer from BPI to COL took 2 days hence I just used COL for its Investment Guide and Breaking News etc. But last week I tried transferring fund from BPI account to COL past midnight and I was surprised that it was credited in the morning. I will be using COL more in the coming days.

Searching the web for ways how I can increase my knowledge in the Philippine stock market, I stumbled upon this group at a time somebody or a group of members bid farewell to this group. I supposed they were the experts and I’m glad Omeng and the group took care of the site. A testament that their effort is sincere in helping each member here. I was fortunate to attend the first seminar last January and from there I learned the basics and the purpose of investing. Each investor or trader is unique. You should have your own goal and your trading plan, your entry and exits; whether you want to do short term trading, or medium to long term investing or a combination of all of these. And your purpose for these, whether for retirement, for buying a house, to fund the education of your children, to buy a car etc. When collecting profit, just be mindful of things that appreciate or depreciate in value so that you’ll get the most out of it.

Invest your time acquiring knowledge as little knowledge is dangerous. Investing in stocks is risky especially if you buy stocks of companies that don’t have good track records or worse are selling their properties to raise funds or companies that don’t even have regular employees (see company disclosures at pse.com.ph or the website of your broker). I regularly visit techfilipino or trader’s logbook website on weekends and read their predictions for the week but of course I don’t buy all the stocks on their watch list as some don’t have fair value by COL. Then after a week I revisit it again to see if the trend occurred. The knowledge I gain I apply on the charts of my stocks. This will somehow make my investing less risky. 

Currently I’m holding BDO, MPI, AGI, PGOLD, SMPH and DNL; as you see all are in the daily TABLE of this site. Recently sold MEG at 25% profit. My problematic stock is CHI, now at 4% loss which I plan to sell anytime this week, a stock with good fundamentals but if investors or traders are not interested (low volume), the price might not go up or just trade sideways. I’m planning to buy the monopolizers like MER once I have more funds while keeping BDO for my long term.

Your worst enemy in the market is yourself especially your emotions, like riding on the euphoria of buying stocks that are in a very steep uptrend only to find out that prices fall the next day. As a value investor, I buy on dips or pullbacks although this may not be evident anymore in this time of bull run. I also buy stocks if the % upside is >15% before the price reaches its fair value or if the SMA is above the candlestick or if the RSI is not yet overbought. Setting a stop loss is very important as this minimizes loss and don’t convert a losing stock into long term investment just like with CAL as what I have read in this site. As a newbie, I prefer not to invest in penny stocks although I’m sometimes tempted by just looking at the gainers (& losers) and their volume at the start of the trading day. These stocks are green today then red tomorrow. Let’s leave it to traders and experts, we are not in the trading floor and we cannot hear their shouts and voices. In the end, it’s your trading plan based on your goals and risk appetite that you should follow. And always be patient, we will also have our millions, albeit slowly but surely.

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Have fun investing (with a clear plan)!

Omeng \_('',)/ 

PS: For beginners, download this full version of Bo Sanchez' pdf ebook - My Maid Invests in the Stock Market... and Why You Should too!
Click here to download for free!