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Losing money in stocks


By: Marvin Germo | October 20, 2017

“Hi Mr. Germo! I am a new fan from Toronto, Canada! I love your Facebook Live videos as it’s really fun and educational at the same time! You make stock trading and investing very interesting! I even recommended you to my relatives in London to attend your seminar there next year! I really hope they do, because what you do for Filipinos is just amazing. If I had known you earlier I could have avoided being in my current predicament. 

To give you a background, I started investing more than a year ago but I bought all the wrong stocks. I bought CHP and FGEN as my friends told me they were a sure bet. Then I bought DD and DNL blindly, all because people told me they were good companies and have no where to go but up. I also bought now because it was being hyped up back then.The only good stock that I have is SMPH and I just bought it when I saw it in your Mythical Five of Stocks post in your website.

The market is up but I am losing money! What should I do? Were there any warning signals before CHP, DD, DNL, NOW and FGEN dropped that I may have overlooked so I could have protected myself from this loss? I know I bought the wrong stocks without studying but what should I do now?

I know you are a busy man but I do hope that you could see this message and I do appreciate if you can give me your advise.”

Lorraine G.
Toronto, Canada

Catch me in my live training events! (quick plug)

The heart of why I do this seminars is I want to build a generation of Filipinos with the right foundation in stock investing.  I want to bring smart investing to every Filipino around the world! If you would like to know more on how you could time the market checkout the trainings below.

Stock Smarts Qatar —  February 5 – 10, 2019
Make Money, Grow Money (Manila) – February 13, 2019
Stock Smarts Manila —  March 9, 10, 16, 17 & 23, 2019
Stock Smarts Cebu —  April 6 & 7, 2019
Investing Insights Japan – April 13, 2019
Stock Smarts Singapore —  May 11 & 12, 2019
Stock Smarts Iloilo – July 6 & 7, 2019
Stock Smarts Cagayan De Oro – July 20 & 21, 2019
Stock Smarts Hong Kong – August 11, 2019
Stock Smarts Taiwan – November 2, 2019

My Answer:

Hi Lorraine! Thank you so much for your message! I am glad that this is reaching more and more Filipinos in Canada as that is the intent of my videos and blog posts that we bring investing to every Filipino out there! I really want Filipinos to be financially free and live their lives at their own terms!

I know the feeling of experiencing losses in the market and it is never easy. But I believe that every great trader and investor at one point or another has experienced  a loss. I hope this blog answers most of your questions and it also helps other people who are in the same boat as you.

1. Stock Selection: CHP, FGEN, NOW, DD, DNL

All of the stocks that you bought are all in downtrends. What I normally teach all our clients in our technical analysis classes is to avoid stocks that are in downtrends no matter how cheap they look, no matter how much hyped up they are or no matter what positive news they see. As long as the trend is down, stay away from them first as there is a larger opportunity for those stocks to drop even more.

What you can do moving forward is to study the trend and only come in and buy stocks that are reversing from a downtrend to an uptrend. This will save you a lot of time, energy and money. It will also protect you from the stress brought about by the grind of watching your stock drop.

2. What should you do with your current stocks?

Go back to your trading and investing plan. If you are in it as an investor, I would suggest that you revisit the fundamentals of the stock. Go back to its profitability, growth, debt, valuations and everything that will help you determine if the stock is good or not. Let me give you an example, if you are an investor, CHP should be sold, as its earnings have declined so much and there really isn’t any positive trigger that would cause you to buy the stock. If you are thinking of having an exposure to construction and Build. Build. Build. There are other cement stocks like EAGLE and HLCM that you may choose form.

If you are a trader, you should sell your stock each time the technicals would trigger sell signals. This would be each time the stock breaks down from specific support points or if the stock tries to rally and fails to breakout from the resistance. I would suggest that you define those points so that you would not rely on emotion when you see the stocks move further in the next few weeks or months.

3. It’s not the end

Don’t quit. Don’t surrender. Nothing of significance will ever be achieved if you quit every time a stumbling block like this will occur. Use this as an opportunity to grow and learn from your mistakes. Your mistakes should not define who you are. There will be more opportunities to grow, learn and eventually profit from the market. You have to remember that the market just moves in cycles and there will come a point again where stocks that are at its highs will drop and new buy signals again will emerge.

That’s why its very important to keep on practicing your tools of technical and fundamental analysis because it is the repeated use of this tools that will develop your skill and your experience and it is what will carry you to profitability in the future. Also never stop putting in money in the market. I know a lot of people are hesitant when they see their stocks drop but don’t be scared! Your goal is to build a nest egg of cash and a portfolio that will earn for you when you choose to stop working! That will only happen when your portfolio would grow by putting money in it and by buying the right stocks at the right time.

I hope this post would help you. Remember you are your greatest asset, never stop educating yourself. Never stop making yourself grow. I hope to hear from you again Lorraine and I hope to get a good report in the future of how you have turned your portfolio around. You can do it! I believe i you!

I’m excited to share my 5th book overall and the 4th book in the Stock Smarts series, Stock Smarts: Breaking the Resistance – How to time your traders perfectly. The heart of this book is to teach you strategic ways on how to come in and buy and sell stocks in a way where you come as the market is headed up and come out as the market is headed down. The book is now out and exclusive via Marvin Germo Book Orders.
For more details and to order my other books: Marvin Germo Book Orders
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