I started investing September last year. But even before I decided to start, I have read a lot of books on investing. I would scour for books in National Book Store or download company materials from the PSE website to learn more of investing strategies and of course, the companies I wanted to invest in.
The tension in Greece and the global financial crisis was on top of everyone's mind that time. By October and November, all the stocks were down. There were even fears that there was a bearish sentiment. I had to endure around 10% loss on my portfolio. The good thing was I still have emergency cash to add to my investments. It helped because I could buy more stocks, only much cheaper this time. I used the additional funds mostly buying more stocks from the ones I already held. In Ctisec/COL financial terms, I simple used peso-cost averaging.
Two particular stocks caught my attention - EEI and PGOLD. EEI Construction was priced at around 3.30. It was November, and the government has not yet laid out a clear plan on its Public-Private-Partnership, a move seen by many to largely benefit construction companies. Looking at EEI's financials, their numbers looked solid. Their revenues were coming from different projects with clients including SM, DMCI, Ayala, RCBC, Globe - almost all of the big names which are currently constructing large buildings and new offices. You only have to go in Bonifacio Global City and check out how many ongoing constructions are being done by EEI simultaneuously. My gut tells me the stock will soon double. I decided against it. Now the stocks is priced somewhere at P8.80. I was still lucky I caught it around P6.50.
Puregold, on the other hand, was not getting the attention it deserved. The company which was touted to directly compete with SM's Hypermarket were being snubbed early on. After its initial public offering at P12, it fell somewhere at P11.40 in days. A bailout plan was released for Greece, and the stocks market was alive again. I bought PGOLD when it went back to P12. I sold it weeks later at P15, only to buy it back again at P18. I eventually sold it again when it reached P24. Now the stock is trading at around P29-P30. I plan to buy again when it pulls back to P26-P27 range.
There were three main lessons I learned from these events.
One, always have an emergency fund. The market may be well and good today, but you will never know when the next bearish market comes. For those who are new in stocks market, this is perhaps the most important advice you should take. You may not think that the stocks market will eventually have its down period, but believe me it will happen. Nobody knows when exactly, so the best way is to allot some money that can help augment your investments when the market is down.
Two, Learn to trust the numbers. I've spent countless nights looking at company financials analyzing which for me was the best investment. EEI was right in front of me and I let it slip by! When you invest in stocks, do not look which companies are popular because more often than not, they are already well invested in. Look for the ones with strong fundamentals and the stocks price will soon go up.
Three, as the old adage goes, patience is a virtue. Imagine if I only held on to my PGOLD stocks when I first bought it at P12. My profit wold have been almost three times! Also, trading costs no matter how small it is, still reduces your profit. The reason why I still plan to buy PGOLD is I believe it hasn't yet reached its peak, and this time I plan to hold it until their performance slows down.
I could give more lessons I have learned this past year, but none sticks with me more than these three. I could have posted larger profits if only I knew all of this, but I got something far more valuable than large gains - I learned.
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