I'm Leigh, a student studying somewhere in Metro Manila. Being a student (post-grad for that matter), I've been exposed to the pressure (I self asserted) of trying to become less a financial burden to my parents, 'cause seriously it sucks to feel that I should have been working in the first place. I felt that I betrayed them for having to continue my education; still, I know this investment in knowledge would be worthwhile in the long run.
Ever since I was young, saving money was my hobby. I hid excess (wasn't really "excess" though) money from my school allowances in places that I would most likely remember - behind picture frames, inside drawers, etc. It actually worked! When the tough times came (we had nothing to eat), I was the hero. Wuhoo! And this I'm really proud of.
Look, I'm not the kid who grew up to a wealthy family so I know how it feels not being able to eat three times a day in the past; I know how hard my parents had to work. And so I yearned to try to minimize my expenses in the best way I can. I love my parents, I really do. They're my everything.
So, from that day on, I knew I had to do something. All those money I've kept for years up until college, I counted the cash, deposited in a bank account, and happily (after trying to figure out how it works) engaged into investing. I also used a portion of my savings to pursue my dream hobby since high school - photography hehe - which took me 7 (yes seven!!) crazily long years to reach a decision that "I've got to buy this now!" hehe.
Last August of 2014, I joined the stock market via COL Financial. I thought that the ways the Philippine stock market and its listed companies are run were easy to comprehend, but no, I had to learn it the other way.
What did I learn from investing in the PH stock market? What mistakes did a young student like me commit?
1. The PH stock market is complex and (oftentimes) unpredictable. It's like a pool of people coming from different backgrounds - with one goal, to enrich their cash reserves. So, always study and learn the fundamentals - be it the companies, or how the stock prices move, or when there would possibly be big sell-offs.
When I say it's complex, one really has to check the company he/she will pour his money into. At that time, I was naive; I visited Bloomberg and Business Week sites to see the stock info of companies I'm excited to really get my hands on.
I thought that a higher future P/E ratio was terrific; I was terribly wrong. I didn't study and research well the meanings and basics of company financial ratios. I bought some House stocks at that time and thought that it was priced fairly. But no, I was wrong; I suffered losses but didn't cut loss until the stock's price reached one that gave me quite a good gain.
I was really scared and stressed at that time because I knew I was losing money and I feared that I might not be able to get it back.
2. What you invest shouldn't be all that you got.
Never ever invest all your savings in the stock market, 'cause the mood of the market changes from time to time. For a student like me, I can't monitor everything as I have classes daily.
Keep in mind that the money you will invest must be the excesses when you've had at least six months worth of emergency funding in your bank account. It means that even if you lose 100% of your stocks' prices, or even if the companies you have invested into go bankrupt, you should have enough withdraw-able money (in the bank) to survive any emergency; else, saan ka po pupulutin?
3. Don't base how you invest purely in emotions. Know the company well. Or else, you will be stressed big time. :))
You know that feeling that you wanted to join this company because it's really exciting to become a part of it, or you believe in it, because it's got good media coverage? What happens then if a scandal breaks out? Just as good things (huge profits) do happen, bad (and worse, really worse haha) things also do. And these could be shockers!
Would you like to invest in a competitive industry? Would you like to invest in just one of the company's products? What about the others? Do you believe in THE product and the OTHER products? Do you believe that it will earn a lot next year?
It's more than just beliefs and emotions. It's more of, are you willing to take the risks (say its rivals merge, or a corruption issue reveals itself)? Are you willing to lose money? Because I'm telling you, investing in the stock market is kind of stressful haha. So, don't visit it regularly (unless you're a regular trader hehe).
4. Know your limits. Know when to stop being greedy. Know your time frame. Be contented with what you get.
I've got 30% stock price (for one company) increase in my portfolio, just within the last two months I have invested in it. However, I also have big losses in other companies.
Of mistakes and lucky hits :)
You should know when to cut losses. You should know when to say I think this is enough for me already (bearing in mind that it's possible you could lose all your gains in just one day). Know when to stop.
You just cannot predict when the stock market will crash. But you know when your target price point is reached or when your time frame is already covered, right? :))
5. Invest in yourself. Educate yourself everyday.
For a student like me, I always make it up to a point to learn more about how the investment and stock market world works.
Join discussion groups online like The Global Filipino Investors and Investing in the Philippines Stock Market - Tips and Tricks. Ask advice (on the basics/intermediates) from mentors. But don't ask for stock recommendations (or if you do, plan well and carefully check the pros and cons), because seriously, it's your responsibility, it's your money, and it's your financial life we're talking about. :)
P.S. I've got a lot to say pa po, pero I have to do something pa. I'll post Part 2 some time! :D Hope you guys learned a lot; I'm open to being corrected, just comment your criticisms and suggestions below. I'm proud of what I am now - a learning four-month-old 11-month-old stock investment newbie. Hehe. Thanks for reading po!
P.P.S. Hope you enjoyed reading this short post. If it won't be a hassle for you, I'd like to invite you to my humble page Spotlight Philippines and see the things I talk about in this blog. :)
P.P.P.S. If you're interested in reading more life-based money stories, here are some of them:
- 5 Awesome Tips to Help your Parents in your Finances
- 5 steps that may help students (actually anyone) become rich (Part 1)
- 5 steps that may help students (actually anyone) become rich (Part 2)
