Personal Development, Finance and Investing For Filipinos
An investment in knowledge always pays the best interest. Financial Education is your best investment.
An investor without investment objectives is like a traveler without a destination.
An investor's worst enemy is not the stock market but his own emotions. To be successful investor, you have to be emotionally neutral to winning and losing. Winning and losing are just part of the game. The PSE Market Education Department has conducted a free webinar yesterday about "10 Habbits of Happy Investors." The resource speaker was Mr. Mark Ilao, Business Development Manager, COL Financial Group, Inc. Here's the excerpt from the webinar.
Habit 1: Invest Consistently
When a 25 year olds today reach 60.
High Paying Job ≠ Financial Security
Someone with a higher paying job is not necessarily better off!
How Much Should I Set Aside?
Remember the 50|20|30 Rule
Invest at least 20% of what you earn!
Tips On How To Stay Disciplined
When getting a bonus or pay increase
Differentiate between needs and wants
Buy what you want, only when you have set aside enough for your investments.
Habit 2: Avoid Timing The Market
When the market corrects, investors usually sell their positions with intention of buying back when the market recovers.
Danger of Trying to Time the Market (1994 - 2013, S&P500)
Danger of Trying to Time the Market (1996 - 2016, PSEi)
Habit 3: Avoid Being Emotional
Average Stock Fund Return Vs. Average Stock Fund Investor Return (1994 - 2013)
Habit 4: Accept Volatility
There are so many reasons why stocks can go down in value. We can choose to react positively or negatively.
Normal human behavior
The happy investor's behavior.
Be fearful when others are greedy. Be greedy when others are fearful.
When there is blood on the street, I am buying.
Habit 6: Do Your Homework
Sustainable share price drivers.
Where are profits headed?
What is being reflected in the price?
An example, ALI (Ayala Land, Inc.)
Another example, CEB (Cebu Pacific)
Do your homework!
Danger of buying Penny Stocks
Case Study: CAL (CALATA Corporation)
Habit 7: Be Cost Conscious
Active trading is very costly.
Total Transaction Cost (Buy and Sell) = 1.09%!
Beware of high cost financial products!
Examples of Fees:
Value of Php 100,000 invested today yielding 10% p.a
Habit 8: Diversify
Diversification helps manage risks!
Basic types of diversification
Habit 9: Think Long Term
The importance of Time Horizon
The Turtle Investor beats the Rabbit Investor by a wide margin!
Risk of losses diminishes in the long run.
Maximum and Minimum Nominal Holding Period Returns (PSEi, 87 - 16)
Habit 10: Review Your Portfolio
Example of an annual review check list:
Disclaimer: This excerpt from the webinar presentation is for educational and information purposes only. This should not be construed as a professional, financial, or investment advice, or recommendations from the PSE.
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ABOUT THE BLOGGER
Hi, I'm Ralph Gregore Masalihit!
An RFP Graduate (Registered Financial Planner Institue - Philippines).
A Personal Finance Advocate. An I.T. by Profession. An Investor. A Business Minded. An Introvert. A Photography Enthusiast. A Travel and Personal Finance Blogger (Lakbay Diwa and Kuripot Pinoy).
Currently, I'm working my way toward time and financial freedom.