As per COL Financial’s data, the PSE drop to 6.7% as of today. The decline was mainly caused by China’s devaluation of the Yuan that may trigger a currency war thus affecting countries that rely on commodity exports.
Now, should a beginner investor be worried about this? It depends. Being worried in stocks boils down to what you really know about stock investing. To provide you with enough confidence, you should really understand why you’d invested on such companies so that when the market drops unexpectedly such as this, you would not get disappointed. If you have basic knowledge on how to determine undervalued stocks, you would not worry about these things.
Here are some good resources on how to pick your own stocks the way I do.
- How to value a stock using EPS, P/E Ratio & EBITDA
- How to check if a company has a durable competitive advantage?
- How to know if a stock is selling for a bargain with just one simple equation?
Here’s a post of mine on how I valuated my first investment.
As a beginner investor, what I did is I studied first. I followed the “aral muna bago invest” mantra because just like any other business venture, you first have to know the ups and downs of running a business. When it comes to stock market investing, you have to know its pro’s and con’s. You have to realize that the stock market isn’t always going up and anything that goes up high usually have to come down at some point. And that’s what’s happening now not just in the Philippine Stock Market, but in the US and China too.
Now if you feel confident enough to do your own stock picking strategies, you can now proceed to become a more sophisticated investor. But to be a sophisticated investor, you will need to study more than what I write in this blog. Most people wouldn’t want to spend their time analyzing stocks the whole day because as we know, normal people like you and me have other things to do like our day jobs and family affairs. But as you know, there are other ways to learn how to be a sophisticated investor. One way is to mimic the stocks that the top UITF’s and mutual fund managers buy.
Ever heard of how fund managers of the top UITF’s and mutual funds do their job? These managers are professionals that spend their entire day analyzing stocks before they decide to buy. But as I said, some of us don’t have the time and motivation to do what they do. So what do we do then?
Simple.
We replicate the portfolio of these top UITF’s and mutual funds.
This is what most investors do and is proven to be effective and efficient in making huge gains. You pick a mutual fund that performs well, copy its strategy, replicate its portfolio and rake in the gains.
Where do you find data on these top performing portfolios to know which stocks to buy?
If you want to see the portfolios of the top performing mutual funds in the Philippines, you may refer to this awesome stock report about the Top Stock Holdings of Top Investment Funds in the Philippines.
Bottom-line is, stock picking requires extensive studying of the fundamentals, technicals and the current market emotions of the stock market. If you want to pick your own stocks, then you should dedicate a portion of your time to study these things. But if you want an easier way to decide on which stocks to buy, then check out this unique report.
Happy investing!