You Cannot and Shouldn’t Be a Stock Investor If —

You Cannot and Shouldn’t Be a Stock Investor If —

Yeah, you fancy yourself to be a successful stock investor. You can no longer bear your excitement as you open an online stock investment account and see those ticker figures while your entire portfolio turns green.

I know. Wait, and wait! Are you really sure and decided about getting into this ‘high-risk’ investment? 

If not, then perhaps you could give yourself a few more minutes skimming this article, ‘You Shouldn’t Be a Stock Investor If…,’ for it identifies the attributes and practices unbecoming of a good stock investor.

Coffee break, please! I have recently observed the downtrend in Metro Pacific Investments (MPI) stock price that plunged yesterday to PHP4.61 (below its current book value). Last year, I sold off all my MPI shares, and two days ago, I bought a board lot at PHP4.87 again. 

I should have waited for the plunge, but it was okay. Anyway, Metro Pacific Investments, Corporation is a multi-billion Philippine stock market player engaged in real estate and infrastructure projects with investments in water utilities, toll operations, power distribution, hospital operations, rail, logistics, and others. 

Phew! I expect a profit in a matter of months as soon as the local stock market recovers.

Going back, here are the four signs you shouldn’t and cannot be a good stock investor. 

Go slow with the items, and feel free to share this article with your friends and colleagues by clicking the Facebook and Twitter icons below.

[1] You still don’t know how the stock market works. Many Filipinos get into money-making ventures and schemes without understanding how they work. As a result, they fall prey to various scams and loss-making investments. 

The Philippine Stock Market is not a scam, but when you get into it without knowing what stocks are and how they are traded, you will soon lose all your investment capital and never give it a second try.

As a beginning stock investor, you should have learned the basics of stock market investment, including but not limited to the different types of traded stocks, reasons behind stock price fluctuations, earning profits from stock appreciations and dividends, stock trading fees, brokers’ commissions, and other stock market terms [Read also, Investing in the Philippine Stock Market Made Easy].

[2] You’re expecting to make millions overnight. Don’t be foolish. Unless you already have millions to invest or trade in the Philippine Stock Market or have been investing for quite a long time, you can make more or maybe your first million in the next few months. 

However, if you’ve just had your account since last week with PHP5,000.00, then you indeed sound too ambitious to make your first million. Come on, no stock rallies to its thousand percent position even within a week, a month, or years, maybe. Lo, it takes time!

I have been a stock investor for two years and a few days, and my colleagues think I get richer day after day. 

The truth is, I haven’t earned a big fortune from my stock investment yet, except for the decent stock dividends. I have just accumulated reasonable capital in my portfolio across years of regular saving and peso-cost averaging.

It’s a big LOL. So a colleague once glanced at my COL Financial account and innocently commented, “Wow, ang laki na ng pera mo! Oo nga, ang bilis nga daw yumaman d’yan. Turuan mo nga din ako para ganyan na din ang 5K ko sa loob ng isang taon.” 

She thought I had the figures gained from just a 5K capital [Read also, How You Can Make Millions in the Philippine Stock Market.

[3] You’re incredibly impulsive and impatient. Suppose you want to be a good stock investor. In that case, you should be cautious and patient – cautious, in a way that you buy and sell your stocks based not on the unsolicited tips and recommendations but on your wisest and most informed decisions; and patient, that you’re emotionally capacitated to withstand the stress brought by extreme market volatility and wait till all reds turn green over time. 

Stock investment is high-risk but highly profitable in the long term.

In most cases, when investors experience a paper loss of 20-30% of a stock’s acquisition value, they become highly impatient and sell off their shares at a loss. Yes, they overthink the paper loss. 

In the first place, however, if stocks are bought at the right time after research and analyses, they should not easily fall 10% below the purchase price. So, don’t get impulsive buying stocks.

Sell-off decisions are also based on the belief that such a loss may be recovered from other more performing stocks. Going through an unfortunate cycle of ‘cutting loss and moving on’ may lead to a significant or possible loss of the entire investment capital. 

Other stock investment articles also worth reading:

[4] You don’t have long-term perspectives. Stock market fluctuations are directly influenced by supply and demand as driven by many other factors such as company earnings and performance, general economic factors, government regulations, and even petty unverifiable rumors related to corporate management – all of which may pose long-term and short-term effects.

As a stock investor, you should not lose your long-term perspective despite the triggering market dips and corrections. 

Having a long-term perspective in stock investment means you are taking advantage of current market dips by acquiring more shares of promising blue-chip stocks at bargain prices while waiting for their rebounds.

Read also:

9 Reasons You Shouldn’t Be Afraid of the Stock Market. This short article sheds light on the common fears and stigmas surrounding stock investing and highlights the advantages that most stock traders and investors enjoy.

How to Invest in Stocks [5-Step Guide for Filipino Beginners]. This article provides a helpful guide on how to start investing in stocks, from learning the basics of stocks to buying the first stocks and rebalancing portfolios.

How to Open an Online Stock Trading Account in the Philippines. This article provides a comprehensive guide on opening an online stock trading account with the country’s top, famous, or probably the best trading platforms.

10 Websites Where You Can Learn Stock Investing [Philippines]. This article provides a list of selected websites and blogs worth reading, offering practical discussions and articles about the basics of stock investing.

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