How did I start in investing?

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source: http://www.debtfreeadventure.com/

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.

source: http://www.shepherdsvoice.com.ph/

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. 

source: http://www.shepherdsvoice.com.ph/

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

What are Mutual Funds?

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I know you noticed I deviated from the stock investing from my last post. Remember this blog is about investing in the Philippines so I am including some alternative investment channels that is available in the Philippines.

First of all lets define mutual fund. In simple terms it is the combined funds of several investor handed over to a fund manager who wisely invest and manage it for a minimum fee and gives back any gains or return to the investors. If this is not so clear let me say it this way,  you join several investors chipping in money and you share in the profits based on your share. Or did I complicate it more?

If you look at the PSE website you can see a link Mutual Funds

Mutual funds are categorized based on the instrument they are invested in. I got this excerpt form ICAP and I believe it says it all.

Different Funds, Different Features

In the Philippines , there are currently four basic types of mutual funds---stock (also called equity), balanced, bond and money market funds.  Bond funds invest primarily in bonds such as treasury notes issued by the Philippine government and commercial papers issued by reputable companies in the Philippines .  Having a full basket of only fixed-income securities, bond funds provide capital preservation while maintaining a conservative stance in terms of asset allocation.   Like bond funds, money market funds also have a conservative stance since they have a full basket of fixed income funds.  The main difference lies in the term of investments of money market fund investments, which is one year or less.  Equity funds invest primarily in shares of stock issued by Philippine corporations.   The dominance of stock issues within the portfolio positions the fund to attain a more aggressive rate of growth.   Balanced funds invest in both shares of stocks and bonds, thereby accessing the growth potential of stocks tempered with the presence of secure fixed-income instruments.   Professional fund managers create value for shareholders by providing superior yields within controlled risk exposures.   Certainly, expective in both security selection and asset allocation go a long way in ensuring better long-term rewards for mutual fund investors.

At present, there are a total of 22 mutual funds in the country.  Six (6) of these are bond funds, five (5) are equity funds, while the remaining ten (10) are balanced funds while one is a money market fund.

 To learn more about mutual funds you can visit this sites:


Investment Company of the Philippines
Mutual Fund Philippines
Pinoy Money Talk
The Mutual Fund Management Company of the Philippines, Inc.
Philippine Stock Exchange