What should you do when the market is up? | Marvin Germo
Stock Market Up

What should you do when the market is up?

By: Marvin Germo | May 10, 2017

After the PSEi broke out of 7,400 on the first week of April 2017 we’ve seen nothing but positive sentiment flood the market which led it to go up by 7.3% (as of this writing). With that we’ve seen the market in general, along with a lot of the large cap stocks move up in value. This leaves a lot of investors with the question, what should I do with my stocks now? Should I buy, sell or hold?

October 2017 Update

As of this writing the PSEi has broke past 7,700 and 8,100 breaking past those strong resistances now making the market more bullish than where we were last April 2017.

Finally! What we have all been waiting for the market has hit our first target! I mentioned this over and over in previous FB Live sessions that the breakout of 8,100 will cause our market to go even higher. 8,100 is now the new support that will protect the market from falling. Now, let’s watch 8,500, if the market stays above that level, 8,800 is now in sight!

Stock Market Up

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.

Up market, down market. The rules never change, you must not listen to your emotions if you plan to trade and invest in the market. I have seen people over and over through the years lose the potential to earn money when markets go up as they either give in to fear and they sell too early thinking that they may lose what they have earned or on the other side of the spectrum, they give in to so much optimism and they buy even when the market is high and expensive.

If you are an investor, your buying and selling decisions should be dictated by how good the company is and how rosy its prospects to grow are in the future. If none of that has changed why should you sell your stock? Remember if you are an investor, your goal is to stick to the stock as long as its fundamental story holds. As of this time, nothing has changed, the fundamentals are still there and the only thing that has changed is that the stock price is relatively higher. So why sell your stock if you are an investor,when the value of the company is still good and its value has not changed?

On the flipside, if you have cash and are planning to buy a stock of a good company but the valuations dictate that it is already expensive. It would be better for you to wait for the stock to correct a bit before you start to come in. You have to remember it is not just about buying a good stock but rather buying a good stock at a good price.

3. Traders follow the trend

If you are a trader, your goal is to stick to this uptrend and hold on to the stock as long as the trend holds. Do not sell too early as you may lose the potential to earn more. Do not chase the peak because you can’t build a proper strategy that way. The stock market is not about chasing jackpots but rather creating sound strategies that will allow you to be profitable repeatedly. What’s amazing about following the trend though is that the charts can give you confirmation when the trend is over and that’s when you start selling and taking profits. You should also consider that there is a resistance at 8,100, you may expect sellers to dominate that price range and each time the market draws near that point and you may see it start to correct. To add context to it, the PSEI already hit 8,000 intraday and then it retraced down during the day. So you have to get it that as the market fails to break 8,100, a correction downward is possible which could bring the market back to the new support at around 7,700.

October 2017 Update

As mentioned above, the 8,100 range has been broke, with that the 8,500 target still stands. What used to be the resistance at 8,100 is now what is protecting us from falling. The support will stand until proven otherwise.

October 17, 2017 Update

Watch, 8,500, if you are a quick trader and 8,500 does not hold. You may now take profits already as a retracement to 8,300 to as low as 8,100 is possible. As mentioned above, if the market stays above 8,500 range, 8,800 is now in play.

4. For Peso Cost Averaging Investors

If you are doing Peso Cost Averaging, just ignore this movement and stick to your plan to add money regularly. Don’t get 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. There are a different set of rules for every technique in the market and 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.

5. Never compare with other investors

This is the best way for you to lose money. When you start comparing your gains or losses with other traders you start to lose sight on following your own personal strategy. You have to understand that there is no one fit strategy in the stock market and you must fine tune your trading plan based on technical and fundamental analysis in accordance to your timeline, risk tolerances, and ability to monitor the market. If you are losing money right now, don’t let this define who you are. Study, bounce back, fail forward and use this as an opportunity to be better in your trades moving forward.

I really desire to see a new generation of Filipinos who are financially free and are using the stock market to reach their goals of financial freedom.

Enjoy this video!

 

New Book and other books on Investing, Business and Finance.

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. More updates soon on the release date!
For more details and to order my other books: Marvin Germo Book Orders
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