The long wait is finally over! On July 15, 2019, Monday, the Philippine Stock Exchange index (PSEi) finally entered the bullish market. PSEi closed at 8,365 and we’ve seen nothing but positive sentiment floods the market which led it to go up by 2.7% higher than the record last Friday, July 12. It’s also the time when all counters are green including financials (3.4%), all shares (2%), and holding firms (3.3%). As we’ve seen it, the movement of the market is looking good and a lot of the large-cap stocks moved up in value. Now, this leaves every investor with the question, what’s the best move to do now? Should I buy, sell, or hold my stocks?
Catch me in my live training events! (quick plug)
The heart of why I do these 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 about how you could time the market check out the trainings below.
The rules never change—the market can go up and it can go down. If you plan to trade or invest in the market, you must never listen to your emotions. I have encountered people through the years lose their chance to earn more money when the market is up. It’s either they give in to the fear of holding their stocks so they sell early thinking that they might lose what they have already earned. Or, they show too much optimism that they buy even when the market is high and the price is expensive.
Your selling and buying decision as an investor should be based on how good the company is and how the promising its prospects are in the coming days, months, or years. If nothing has changed and the status of the company you are investing in remains the same, then why should you sell your stocks? Remember to stick to the stock as long as its fundamental story holds. Don’t sell yet if the company is still good and valuable.
One of the traders’ goals is to continuously follow the trend as long as it holds. If you are a trader and you sell too early, there’s a tendency that you will lose your potential to earn more. You must not chase the peak as this will affect your strategy as a trader. Worse, you can’t build up your strategy at all if you keep on aiming for the peak. Keep in mind that the stock market is not about chasing jackpots but rather creating sound strategies that will allow you to be profitable repeatedly.
If you are an investor doing peso cost averaging, ignore the movements and stick to your strategy to add money regularly. Don’t fall into the trap of trying to avoid buying now because the price is relatively higher. If your goal is to invest using Peso Cost Averaging, stick to that and don’t time the market. Different rules exist for every technique in the stock market. For Peso Cost Averaging, it requires that you follow your program and just add to it as often as you can so you get to accumulate stocks for the long term.
The best way to lose your money? It’s comparing your gains and losses with other traders and investors. Once you start comparing, you lose the sight of following your own program. As an investor or trader, you must understand that every person deals with the stock market differently. You must fine-tune your trading plan based on technical and fundamental analysis in accordance with your timeline, risk tolerances, and ability to monitor the market. Losing money now doesn’t define who you truly are. Rather, it’s a sign for you to study more and bounce back.