Investing in Philippines: One reason why Pinoys don’t invest in the stock market

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Wednesday, November 30, 2011

One reason why Pinoys don’t invest in the stock market

source: http://pozytek.ngo.pl

There was a survey made about how many Americans invest in the stock market and it was said that it is at 54% and this was the lowest reported number since the financial crisis we are in today (click here to read post in huffingtonpost.com) While that number is considered low in the USA that is already huge in the Philippines. As per PSE's estimates only 1% of the Philippine population invest in the stock market.

No wonder lots of big listed corporations are owned by foreigners because that number.

That is why I came up with the idea why Pinoys don’t invest in the stock market (again this is just my idea if you agree leave a "yeah" in my comment box and if not we are more than willing to read your opinion also in the comment box). With our long history of colonialism, it seems that we develop this mentality of limited resources or scarcity. Since we think this is all that we have, we tend to instead of use such to gain more we hold on it tight and don’t use it well.

Also with that, since we think we are limited every time there is a chance of extra we tend to spend it so that at least we have a taste of the things that we don’t usually have. For example, you are a regular 8-5 employee with a salary of 10,000.00 pesos a month. When you get half of that in your "kinsenas"(salary is usually paid every 15th and 30th of the month) you first make sure to buy your groceries, then pay your rent, then allocate some for your fare and whatever is left is free to spend like watching movies or eating at Max's Restaurant. That is a typical Pinoy employee. But when your employer suddenly announces a bonus of course your mind starts to plan where will you spend that bonus. The typical Pinoy employee will usually plan a Boracay or Baguio trip.

Since we think we are limited we first make sure our daily living is taken cared of thus we buy groceries and the stuff but not save. In addition, when we have a chance to have extra instead of saving it we would love to spend it in your dream getaway.

If you have followed the manga or anime Fullmetal Alchemist, you might have encountered the famous basis of the story: Equivalent Exchange.

I have discussed this topic in my previous post (click here if you haven't read that post). The law of Equivalent Exchange means when you want to get something there should be an equal value, item, or sacrifice that you should give in exchange for such.(Sorry if I use a manga ideology but this is so real in real life). 


Since Pinoys have this mentality of scarcity we are afraid to make an "Exchange" because we know that in order to have something that we don’t have we need to exchange it with something that we already have and that scares as the most.

The stock market is risky specially now but you are not looking at the other side of the story. It is scary for those who bought the stocks at a high price but what if you are on the buying side now. Isn't it you are buying things at a bargain? Yes, the market is still at a bargain and yet you don’t want to part with your savings because you think deserve a getaway in Bora.

Besides the stock market, you have other choices to put those small savings. You can start a mobile  loading service (its mobile because it’s your phone and your business is where you are). Alternatively, probably you can join a onetime bazaar selling some stuff, or maybe you can even setup an online store where you can ship goods within Metro Manila for free (but actually shipping is included in your pricing) and shipping for outside Metro Manila will be at buyer's expense.

Yes I believe that is one of the reason why the simple Juan or Maria are afraid to invest in either stock, small business, or even an online business because they don’t want to lose the small savings that they have but are ready to spend  an extra money to something they have been wishing for.




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7 comments:

Dennis The Menance said...

I cannot see how anyone can leave the purchasing of stocks completly out of your porfolio.

Spiky said...

my teacher bought stocks during arroyo's mid-term, it was really down. now, i think his money grew because of the new leadership. kaching kaching...withdraw withdraw.

nice blog pare. keep it up. :)

http://ohbite.blogspot.com

Rej said...

yeah this is so true just like when you're trying to convince someone to save. there are people after putting a small fraction of their earnings in their piggy bank, they tend to complain "wala ng natira" without even realizing its benefits.

Louis Delos Angeles said...

Salamat Spiky. That is the secret of stock investing: buy when a good company's stock is down and wait till it comes back strong...and as you say :) Ka-ching!

Louis Delos Angeles said...

Sis rej its like GLoc 9 and Sheng Belmonte's song :) but it is true. Pinoys think it is expensive to start a business but they can buy the latest mobile phone :)

Marisse said...

I agree the views of the author. Here are some additional details why Filipinos are not into buying stocks.

1. Lack of education. I mean, in stock market, you have to know to interpret the details of economic statistics. You might say that an investor can hire and economist. YES and NO. Yes, if the investor can afford one. If NO, the investor has to drive his own boat.

2. Fear of not getting a better return of investments (ROI). Most of us always like to have win-win situation but this is not always the case in stock market community.

3. Culture and tradition. This is what we are and we've been for like this for many decades. Women were being portrayed as housewives and only need to be home and do the usual household chores. But study shows, women are critical thinkers and often they are willing to risk than men. Check why we have a lot of women going abroad than men.

4. Crab mentality. Your own business partner might even pull you down because he/she don't like you to prosper.

etc.

Visit http://diversityhuman.com

There might be some topics that would catch your interest.

Investing in Philippines said...

Very well said Marisse! Thanks!

Chitika