June 25, 2012- The Best Unkept Secrets in Making Money in the Markets

Okay,  last Saturday, our team went to explain the stock markets to people who have never invested a single stock in their life.  In short, people entirely new with zero knowledge in the markets.  So we came up with lots of slides to explain the markets to peeps.

I cannot copy paste the entire slideshow (coz it’s proprietary – owned by company, not me).  Nevertheless, I can share the basic concepts here.

(If you want the complete copy – just message me via facelesstrader@gmail.com and I’ll share. thanks.  We’ve put in lots of cute pictures especially for newbies and promise– we don’t talk about technicals because we assume ZERO knowledge.  The talk went great.  Feedback from the people who listened to us said, they understood it well, so for my clients, I can just simply explain the entire presentations to you if you want to.) 

For me — the following will have to be my favorite best lines in explaining how to make money in the markets (the stress free way).

1.) For as low as Php5,000, any Filipino or foreigner can easily invest with the country’s top fund manager in the Philippines.  http://www.philequity.net

For more information, call the phone number in the website.  Email me or just simply make a comment, and I’ll try to help design a solution based on your personal needs.

The main difference between a mutual fund and a unit investment trust fund (UITF) is that mutual funds’ maximum exposure in a stock is 10% of the fund, versus UITF’s 20% allocation per stock. Also, they have different governing bodies.  The first is SEC, the second is the BSP (Bangko Sentral ng Pilipinas).    You also need to check for the fee differences because they vary.  Nevertheless, Philequity fund has provided the Php1.00 invested since 1993 to Php25.00 so far for 2012.  That’s 20 years of SUPERB investing, I must say.  While historical performance is not a guarantee of the future, just know that it’s been done for 20 years and that’s magnificently not just luck.

2.) Peso Cost Averaging – while heavily known by most people – is still not as used by many.

– Remember this – Time in the markets is generally more important than market timing.

Most people hone their technicals, and fundamentals but sometimes you’ve come so far with those two but forget discipline.  The timeless value of Peso cost averaging is discipline.  Crucial factors of Peso cost averaging is amount, time and company.  Peso cost averaging works in stagnant and rising markets (which we are experiencing now), but NOT in perennial declining markets.  Know the difference.  If you think you are good with timing the markets, then so be it.  However, what I’ve realized is… market timing alone is so difficult that 1% of the population can only rely on consistency in complete market timing.  Spend time with your kids, choose the companies with good earnings and good business models, allot a set amount of disposable income for investment and just do peso cost averaging (or find a broker who’ll assist you somehow).

I believe COL Financials’ EIP program talks heavily about this.  Mr. Bo Sanchez wrote a book “The Turtle Beats the Hare” or something alluding to the merits of long haul investing.  I suggest people read the book.

Also, Mr. Aya Laraya of Pesos and Sense TV has been talking about this, but I don’t know if people actually listen.

Anyway, the people who did Peso cost averaging for BPI and JFC for the past 10 and 9.5 years (allotting 5000 pesos a week) grew their invested capital by 269% and 232% respectively after reinvesting all the cash divs and stock divs in the same investments.  (You can ask the excel file from me if you want to know how I computed it.  Message me lang.  I dont know how to attach excel file here)  Apple Stock was superb for the last decade. 5000 bucks invested in Apple returned from 2.5 M to 52M end of 10 years.

It doesn’t take a genius to make money in the markets, it just simply takes discipline and time.  Forget about the people fooling you into quick riches, and just stick to having a trading account, an investing account (via peso cost averaging).

Let these pictures help instill the importance of long haul investing:

3.) Last thing to note, don’t let people tempt you in buying “race car” stocks.  Just like the normal people driving cars, leave the speculative stocks to professionals.  You’ll end up crashing and burning especially if you don’t know what you’re doing.  Don’t listen to people buying stocks that go up 200% within 5 days.  Stop minding them.  If you think they’re all noise, completely ignore them.  Far more money is lost chasing conceptual dream stocks rather than the “turtles” that eventually just make so much money for you over the long run.  You don’t have to make money in these stocks.  You can buy a little if you wanted to before, but make sure you had a position size.  Never mind hindsight.  That’s the thing, it’s all just hindsight.

Listen to the people who’ve been making money year in year out.  They all said the same thing – Discipline.  Finding your investment style.  Peso cost averaging – stress free- for most people.

For “advanced” market peeps, you can all just simply modify peso cost averaging.  Trust me, I sold my favorite stock because of macro concerns and saw it go uppity uppity up.  Peso cost averaging eliminates the fear of missing out.  Once you find the companies you want to do long haul investing, stick to the plan.  Thanks.

*****

I said above are the best unkept secrets because they never were meant to be secrets.  They’re always out in the open, but people for some reason refuse to listen and simply listen to tips, most often from unscrupulous quick scam artists even.

If you want to do cost averaging, invest in mutual funds or ask someone about it,

 

– Faceless Trader

 

Advertisements

About Abc

Abcdefghijklmnopqrstuvwxyz
This entry was posted in A Little Common Cents Corner. Bookmark the permalink.

18 Responses to June 25, 2012- The Best Unkept Secrets in Making Money in the Markets

  1. shoyu says:

    maybe 😀

    hi FT .. morning! 😉

    Like

  2. Odette says:

    “Far more money is lost chasing conceptual dream stocks rather than the “turtles” that eventually just make so much money for you over the long run.” — It’s so true that it hurts 😦

    Like

  3. Glen Pado says:

    thanks for sharing..

    Like

  4. marvin says:

    Hi FT! This is one of your best posts. Thanks for your guidance!

    Like

    • im even better as your broker/financial adviser. Trust me on that. 😀 Open an account with me here at the place I work for 😀 Consider.

      Like

      • May online din samin 🙂 And 0.25% comms rin. I like both. hehe. I have both COL Financial and Wealth (of cors, support where I work in haha.) 🙂 Best of both worlds. Mutual funds din namin try mo. Magaling ung fund manager hehe. Pero just to be fair, magaling din ung Sunlife na mutual fund ah. Magaling din naman ung mga BPI,FAMI pero kasi marami silang mga basura stocks sa uitf nila kaya minsan mahirap with BPI,FAMI – u have to really look at the holdings. Some are very volatile- pero kapag mataas risk appetite mo – edi happy ka haha. daming PXP ng BPI. haha. 😀 FAMI ata puro mga DIZ NI ORE ata ung mga pinasok ni Mr. fund manager . i wont name them hehe. alam mo na un. Pero ang dami rin kasi nilang pera kaya they can put basura stocks in their portfolios. dami na kasi sila mga bluechips.

        Like

  5. MM says:

    I have small funds to invest. Can I open a mutual fund account with Philequity? Thank you

    Like

  6. Pingback: August 27, 2012- Revelations + Updates on September 1 Seminar:D « Faceless Trader

  7. marie says:

    Thanks. Very helpful tips to me since I’m looking to invest in MF Phil Equity Fund.Maybe you can share a bit kung pano mo ginagawa yung peso cost averaging.Gusto ko kasing pagaralan. By the way my auntie invested in phil equity fund so far so good. Thanks again.

    Like

    • peso cost averaging is simply buying a company’s stock on a set amount (example 50K pesos every month) at X price as long as you believe that the TP of the company is still more than 20% higher than X.

      Like

  8. jay ar de guzman says:

    Magtatanong lang.. balak kong bumili ng car pero gusto ko cash.. pwede kaya na mag alot ako ng 20,000 per month just for 2 YEARS in investing sa PCA?? Will i be able to have a near million?or even half million is okay. Thanks.

    Like

    • so 480K gross invested ka if ever, I think provided you can get around 10-20% per annum which is very realistic, your 20K per month, after 2 years can realistically be around 700K pesos after 2 years. (480K can be between 600-700K)

      Like

  9. RP says:

    Hi ma’am! Would you recommend investing in philequity’s new dividend equity fund over the old equity fund? Thanks! 🙂

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s