Learnings From The Stock Market

Learnings From The Stock Market. In this post, I share everything I've learned so far about trading in the philippine stock market
One of the best ways to learn is to share. Sounds odd right? But it's true.

Every time you tell someone what you know, they hear it once. But maybe it's the tenth time you've heard it yourself, reinforcing the idea in you even more.

And different people have different perspectives. Meaning everyone you share knowledge with will have different questions. So maybe they get their questions answered. But for you, it's additional perspective you may not have had before, thus creating a more comprehensive picture in your mind.

I think that makes a lot of sense. So I thought it would be a good idea to share everything I've learned so far about trading in the stock market.

Things I Learned To Avoid When Investing In Stocks
Things I Learned To Avoid When Investing In Stocks

There are a lot of things you need to avoid. They sound simple but it's easy to skip them and think we'll still be ok. The most basic is having an emergency fund before investing.

Sometimes, we're too eager to invest and earn, we can forget that we can lose money as well. But of course it's only a paper loss unless we redeem. But then, without an emergency fund, that's exactly what would happen.

And even if an emergency doesn't pop up, that emergency fund is going to give you peace of mind. You'll be less anxious when your investment is in the red - which it will be at some point since the stock market is cyclical.

7 Things I Learned From the Philippine Stock Market
7 Things I Learned From the Stock Market

But the best thing I've learned is that there really are different types of investors. Some are more suited to be passive, others feel the need to actively trade. Some like small quick returns, while others have the patience to go long-term for bigger rewards.

Any one of those could be the correct strategy for you. As long as you take the time to get to know yourself as an investor and follow a strategy that's right for you. If you don't follow a strategy that's right for you, you could end up making irrational moves.

The Power of Waiting
The Power of Waiting

Whatever your strategy is though, it's important to remember that being right is better than being first. The market isn't a race.

There's no need to get in at the very bottom or sell at the very top of a trend. If you don't know what's happening, don't give in to knee jerk reactions or the latest "update" from facebook or a forum. It's not that they're wrong, it's just that no one can be 100% right all the time.

Confirm what you know and then act.

But the most surprising thing I've discovered is that success in the stock market doesn't depend entirely on picking the right stocks. In fact that might be just half the battle. It's equally important to have cash.
What I Learned From A Bear Run

But the most surprising thing I've discovered is that success in the stock market doesn't depend entirely on picking the right stocks. In fact that might be just half the battle. It's equally important to have cash.

You know who I think was really happy during the last bear run? The ones who had a big chunk of their fund in cash, just waiting for the right opportunity.

Besides, there will always be another bear run or bear market. While cost averaging will ease the pain, the best defense is cash in your account. If you have it, that correction is not only painless it can actually feel exciting - like window shopping for that perfect Christmas gift and getting it on sale.


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photo credit: Jun Acullador via photopin cc

10 comments:

  1. The power of waiting is so right! Time is our friend when you are an investor. I saw my 120 percent gain just for waiting and sold it. Now, Im seeing 130% gain! Time really does make magic

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  2. How to join? How much is the investment?

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  3. Hi Eris, try reading this post: http://www.personalfinanceapprentice.com/2012/11/how-to-start-investing-in-philippine.html

    Then if you have other questions, please feel free to ask me.

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  4. Hi Carlos, thanks for sharing your stock market learnings. They're very enlightening. Nagbaback-read nga ako ngayon ng blog mo para mas madaming mapulot na kaalaman mula sayo. Salamat!

    P.S. I'm a newbie stock market investor (COL Financial) and so I keep reading and reading about how the stock market really works. :)

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    Replies
    1. Hi Edelweiza,

      Thanks for the kind words! :)

      Ako dn hanggang ngayon basa basa pa dn. Gotta keep learning to keep earning hehe

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  5. Hi. i want to know where to start, how to start, and where to start. i am really interested in stocks. thanks!

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    1. Hi Lee,

      You do seem really excited. At the end of the post, I've given all the links you'd need to know how and where to start. happy investing!

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