Investing in Philippines: How did I start in investing?

SEARCH INVESTING IN PHILIPPINES

Sunday, September 5, 2010

How did I start in investing?


I have forgotten that I have been babbling about stock investing and online stock investing for sometime now without sharing how did I start about investing.

Let me share with you a long story of my financial freedom quest and the reason behind it.

My consciousness about the importance of money really started when I was in college. When I was young money was not a problem since it is not my duty to worry about it. Also being and studying in the seminary has taken that away even if I know my mom and dad worry about the tuition(yes some seminaries are not free so if you can donate or sponsor a seminarian please do so). The moment I entered college I learned how money really affects each and every one's life. Studying in Manila is not cheap, living there alone is not cheap.

I enrolled in Philippine School of Business Administration-Q.C. My Alma Mater is primarily focus in the area of Accountancy and Management so I ended up taking B.S. Accountancy. As a newbie in Manila at the same time newbie in accounting I am always fascinated about the course I took. Accountancy is not about how to get rich, it is more of how to analyze the business transaction. If you are also an accounting graduate like me I believe you can do Fundamental Analysis which in our accounting language is Financial Ratio Analysis(the subject you hated besides Accounting 7, Management Accounting, Law, and Tax ). 

I know my story is kinda deviating so here is the reason why I got myself to investing.

I read a book written by Eugenio Sanchez Jr. aka Bo Sanchez. The title of the book was "Simplify and live a Good Life". I have read his magazine, Kerygma, and Thank God, His Boss! but in all his works this one greatly influenced me. With my background as a seminarian and the thoughts Bo wrote in this book it made me think why are so many people are tired everyday. They work and work for no reason. They work hard to pay the house they never really enjoyed because 3/4 of the day they are not in it. Money shouldn't be the problem. One must know how to make money work for them so that one wont go to the trouble waking up even though you really don't want to but because you have a house to pay and expenses to pay you drag yourself out of your bed to go to work. I am not implying that going to work is bad, we need to earn a living but most of us are buried in debt that makes our lives miserable.

At the same time at school, we have this subject Corporate Accounting. My professor and dean of the school, Dr. Raul Addatu, would always tell us to buy stocks of SMC(San Miguel Corp.) and wait till it goes up. Yes I learn about stock, stock rights, stock dividend, and so many things about stocks but never about stock investment and stock trading. Dr. Addatu always tells us that in his MBA class, in order for a candidate to be granted the MBA title one must buy a stock and have a profit at the end of the program. That scared me because I was planning to take my MBA but until now I haven't.

So after all those experience I started looking for answers that bothers my mind. I searched publications about investments. I got a primer from a local paper discussing stock investment and my mind started to swirl when I learned that stock brokers require a minimum of 100,000.00 pesos to open an account. Online stock brokers are not yet around at that time. But it did not stop me from dreaming to own stocks of some famous company the likes of PLDT, SMC, and Ayala.

When I was working in my last employer before working here in Guam I already set my goal to be an investor. I have been setting aside money for it. The very first investment I made was at a mutual fund. I just have to make that first move to keep myself going into that direction. It was just a small and right now I don't know how it is already but hoping to check it after five years to avoid charges of early withdrawal of funds. 

While working here in Guam I always check the websites about stock market like PSE, DOW, Bloomberg, CNBC and TV shows like CNBC watching the World Wide Exchange, Managing Asia hosted by Christine Tan, and other programs. I waited nearly two years until I opened my brokerage account. 

In Bo Sanchez's book 8 Secrets of the Truly Rich he mentioned about Citiseconline. So checked them out and even emailed them on how would I open an account even though I was outside the Philippines. And so last November 2009 while on vacation I opened my account with them placing my initial deposit of 25,000.00 pesos. To tell you the truth I was thinking twice and I was a bit jittery about it. Even though I have read a lot about it and even played the online stock trading game it still makes me think how will I do it.

I have eyed on stock of JFC(Jollibee Food Corp.) and have been placing buy order from January 2010 to early March.  It was only in March that I have my first buy transaction. Then SMPH(SM Prime Holdings). I have been holding this two until it made a profit in around April or May and released it. From their on I started bold buy and sell transactions. It came to the point that I was holding 18 stocks and most of them are at the negative. But it didn't bother me. The years of learning and understanding stock market trading finally sink in to me. 

Also I have joined a forum and started this blog to share what I learned about stock investing. It may be scary because it is your hard earned money that is on the line but knowing how to play it and having knowledge about it makes it easy. And so I will re-iterate my and my friends advice when doing stock trading:

1. Only invest free cash
2. When your portfolio is negative you have not yet loss anything
    unless you sell it
3. Buy low, sell high. Lower your average cost per share and take 
    profits when prices is near your target price 
4. Prepare for market correction. Always have available cash for 
    bargain buying
5. Read, research, and learn. 
6. Don't be afraid to ask, you are an investor
7. Always be humble and share your knowledge to others
8. Trade at your own risk. 

How about you how did you start your stock investment? Share your story here in the comments

9 comments:

Jeff said...

Interesting story. For me, the first book that influenced me is the old time classic "Richest Man in Babylon". Since then, while working, I saved money to buy mutual funds. All extra money goes to my freelance business. Being frugal for 7 years. Never bought anything I don't need. I still have a 3210 cellphone. I am now trading in forex and looking to get into stocks. Hopefully.

Louis said...

Thanks for your thoughts Jeff, may I ask how did you venture in forex?

Jeff said...

me and my friend love to invest in risky market. we tried forex and got addicted. you can visit my forex journal if you're interested in forex as well http://forexphilippines.org/

Anonymous said...

I also start investing because of Bo Sanchez. Btw, I really like your blog, I hope you have a summary of articles per month so I can read previous articles without clicking the older post:)

Louis said...

Thank you very much! I will try to activate that feature in my blog. Again thank you for the appreciation

pounds88 said...

My mother has a share in SMC. Her oldest brother gave it to her when she was still single.She married at the age of 27 . She used to tell in the late 80's she regulaly received dividends from san miguel worth_______.


Now im 41 yo and have 2 kids. i googled on how to gain financial freedom. I came to stock investing. Last Jan., 2011 i opened an account at FMS. My mother is now 70 yo and still a shareholder of SMC.

Rej said...

Hi kuya Louis. I attended Citiseconline seminar last Thursday. It was an overview about stock investing.

Just want to ask what are the differences between COL-EIP and COL Traders? In my own understanding sa EIP listed ung mga companies where is "best" to invest in on the other hand sa Traders listed lahat and it's all up to you where to invest in. Tama ba? Hehe! Please expand. Hehe!

Thanks.

Anonymous said...

can i invest or buy a stock even though i am working abroad???

Investing in Philippines said...

Hi there Anonymous :)

Definitely you can invest in the Philippine Stock Market even if you are somewhere else except Philippines. As long as you have an online broker that is participating in the PSE and that you have access to internet you can do invest in the Philippine Stock Exchange.

If there is a Metrobank or BPI in your current location inquire on how you can open a account with their affiliate online stock broker. For BPI its BPITrade and for Metrobank its First Metro Securities Brokerage, usually you can fill the papers online and submit those through the branches which will forward it to the Philippines.

Chitika