The Stock Market is Going Down....Again

I just learned today that the Dow Jones fell by 394 points at closing last Sept 9, 2016. Most of the time, the DOW serves as a barometer on how the Asian markets will perform, specifically the Philippine market which is represented by the PSEi.

The PSEi already closed out on a losing note last Sept 9, 2016 by 85 points. And with the Dow losing out big time, I won't be surprised that the PSEi will follow suit especially that majority are foreign investors. I wish that the time will come that Filipino investors would dominate the Philippine Stock Exchange.

I mentioned in my previous that I have rejoined the Truly Rich Club. One of the main objective of the club is to teach financial education to Filipinos. The club would like to emphasize that investing in the stock market is not only for the rich. Anyone can do it as long as we obtain proper financial education and guidance.

The club has a shortlist of recommended stocks that the members could buy on a regular basis. That is regardless if the market is up or down. It doesn't really matter. The club members celebrate when the market is down since we can buy shares of great companies at cheaper prices. We are being taught to buy on a regular or monthly basis so we can ride the volatility of the market. We are also being trained to act as Investors and not as Traders.

The role of the club now is crucial as some investors, especially the newbies tends to get carried away by their emotions. We are being reminded of the famous mantra by Warren Buffett that "We must be  fearful when the others are greedy, and greedy when the others are fearful". Long term investors buy when there are a lot of selling going on and are on standby when stocks are getting overbought.

I used to be carried away by emotions when it comes to investments, but now, with the proper guidance and education, I know for sure that I won't be on the wrong side of the fence ever again and I won't miss out on greater opportunities.

The Stock Market is Still Going Down.... What to do Next?

For several weeks now, I saw the Philippine Stock Market on a downward spiral. Though there were a few trading days when I see the market make a rebound, I see it as an opportunity for bargain hunters to buy shares of great companies at a much cheaper price. After bargain hunting, shares plummet once again on the following days.

Others view the current downtrend in the Philippine Stock Market as political. However, based on the global news, it seems to boil down to global economy. The impending increase in the federal tax rates is being anticipated with bated breath.

To long term investors, crisis like this is a great opportunities to accumulate shares since the prices are cheap. This is the time to be greedy since a lot has been so fearful. Fearful because some entered the market when it is going up. For those who waited on the sideline when the market is up, I imagine that they are now like kids buying candies of different variants from candy store. There are lots of cheap companies left and right.

One piece of advice though my friends, always make sure that you buy shares of great companies only. You must invest your hard money on companies which will be around for the next 10, 20 years. Do not put in your hard earned money on penny stocks. Later on, you will become penniless.

Invest wisely. We invest because we think about the future. Live in the present but always plan for the future.

Have a nice day!!! :)

How to become a Saver from being a Spender

Once upon a time I was a Spender. I have yet to receive my salary but it is already consumed because of things that I wanted to buy. The sad thing about is, I bought items with the use of credit. I was not only a spender, I was also a debt magnet.

It crossed my mind that my financial life is going nowhere. I have no investments. I have no savings. Until one day, I decided to change my mindset. Instead of being a spender, I now wanted really bad to be a Saver. I was able to buy books on proper financial management and lifestyle simplification. I needed mentors, and it came in the form of books, audio books, internet articles, etc.

I was never the same after that. I've learned about the prosperity formula. I've never known, that for us to be able to prosper, we must follow the prosperity formula, which was the formula used by rich people.  And that it:

Income - Savings = Expenses

We must live on what was left after we deduct our savings from on our income. Before I used the poverty formula:

Income - Expenses = Savings

The problem about this formula is, most of the time, there was no savings at all. And there were times that instead of zero, it becomes negative, forcing us to incur debt.

It is recommended that we save at least 20% of our income and put it into something which would earn us interest.

Now, I am using the prosperity formula to help me boost my financial life so I can be financially free when the time comes that I already need to retire. I am excited when payday is already around the corner since I know that I can once again transfer funds from my payroll account to my savings account. Saving nowadays became more convenient because of online banking. With a few touch, we can easily transfer funds from one account to another.

But we should not just stop with just saving our hard earned money in the bank. We also need to grow our money exponentially. We cannot just rely on the 0.5% annual interest that our money earns from the bank. We need to beat inflation. And that can only with the use of investments. More on this.

Have a nice time. :)

Proper Use of Credit Cards

When it comes to paying purchases, there's no question that credit card is the most convenient mode of payment since we don't need to bring too much cash in our wallets.

But after using "plastic money", what do we normally do once we get home? Do we pay the credit card company immediately? Or we wait for the billing statement and pay only the minimum and we allow the bank to charge us interest?

I am not trying to make myself clean when it comes to these kind of things because I was once hooked by the credit card mania.  After using the card senselessly, I just waited for the statement and just pay for the minimum amount. There came a time when I no longer know how to pay for it. I got into several loans just to pay for the credit card.  Talking about financial ignorance. I simply did not live within my means. Salary is being spent out even before receiving it. And that it due to the improper use of credit cards.

So after painstakingly developing the discipline, one by one I first paid credits with the highest interest rate.  Cut off cards, with "hidden charges".

Please don't get me wrong, credit card is not evil. It is actually a tool which if used properly may also bring in peace of mind. Personally, credit cards must only be used in emergency situations when we have no immediate available funds. It should not be used to fund our lifestyle.

Right now, I only maintain one credit card and sometimes use it for items such as grocery, clothing, medicines, car maintenance, etc. But I make sure that when I get home, I pay all of it via online banking.  Though there were times that I'm not capable of paying 100%, I make sure that I pay at least 90%. So by that, I maintain my credit at a minimum level.

So think twice if we are a planning to use the credit card. It would be much better if we save for something we wanted to buy. Do not buy on impulse. We might realize later that we don't need that item we wanted to purchase especially if it is a want instead of a need.

One of the use of an Emergency Fund

This will serve as a prelude on my future post regarding Emergency Fund.  I just can't help but to immediately share my experience of how important having an emergency fund really is.

We normally leave the house to go to work around 7AM and we would normally use the car. But to my surprise, the car just wouldn't start. Twice, I tried to start the engine but to no avail. My initial reaction is to pop the hood and checked the battery terminals if it is loose. I disconnected the terminals and put it back in. Tried to crank the engine and it still won't start. The first thing I thought is, the battery is done. However, I didn't experience a hard starting the last couple of days. The only thing I remember is that it had a little jerk when I started it the day before.

Left with no choice, I told my wife to just call tricycle so she can go out of the subdivision. For me, I called on the Motolite hotline and requested for an immediate battery delivery. This time I ordered the Motolite Gold. The previous one was an Enduro.

Fortunately, I had an available cash which really came in handy in situations like this. This is the result of the discipline that I've developed through the years when it comes to money management (more of that in future posts :)). I was thinking of using my credit card but there were time that I'm already afraid of using it due to several incidences of double charging, which is sometimes one of the problems of using credit cards, even if I am going to pay it online afterwards.

Fast forward. The Motolite personnel arrived as scheduled. Tested the old battery and it really needs to be replaced.  Installed the new one an I was able to start the car.  After several testing, I paid the guy and gave him an additional tip for a good service. The good thing about this is I paid in cash without feeling hard about the whole thing.  Even if the battery cost around P5500.00.  That is because I have available funds intended for things like car maintenance.

With this experience, I really would want to encourage everyone to create an emergency fund regardless how much one is earning. It doesn't matter how much we earn. It on how much we save that matters.

My Mutual Fund Investing Experience...so far

I started out my mutual fund investing sometime 2008.  And I admit I started out on the wrong foot. Why? Because I have no idea what mutual fund is all about.  As in zero knowledge. I'm not even keen of doing investment during that time (everything's different now though.. :)).

It so happen that a former boss invited me to a seminar regarding investments. That's the first time I've heard of mutual fund. I was expecting something about stocks and I was introduced to this. You can imagine how confused I am during that time.  Talking about financial ignorance :(. So I shelled out P5000.00, opened an account from the top mutual fund company, and bought shares at P10.7/share and I am now in the world of investments.

I've made foolish mistakes after that transaction and would rather forget everything about it :). There were lessons learned after that.

Fast forward, I am now again an active mutual fund investor. I decided to invest in Philequity as a personal choice, based on its track record. Initially, there was a little inconvenience when it comes to mutual fund transactions, everything is done manually. Filling out forms, going to the bank to deposit funds, scanning the deposit slip and investment form, etc. For a guy who has a regular day job, I don't enjoy such activities.

Fortunately, one of the top online stockbrokers in the Philippines, COL Financial Inc., introduced the COL Fund Source.

                        

                        

A COL Fund Source is like a fund supermarket where investors can simply select every financial instruments which suits their investment appetite.  And the best thing about this is, everything is done online.  Just what I'm wishing for. :) With just a simple click everyone can now have a mutual fund account.  But you have to open an online account at COL to enjoy these benefits. :)

One of the good thing about mutual fund investing is that in a volatile market, you are somehow protected from big losses because of diversification.  A mutual fund is the best way to do diversification on a minimal cost since the fund manager allocates the funds to different industry sector.  And your investment can buy shares up to the last centavo as compared to individual stocks which has a board lot. I'll have a separate sharing regarding my personal direct stocks investment on future posts. :)

So there, as of this time, despite of the recent consolidation or correction, my fund is still doing good. It's still in the green. Reason is I was able to purchase shares when it was still cheaper last April of May 2016. My personal strategy is to buy additional shares during market dips.

Hope you can get something positive out of this sharing.  If you have clarifications, please feel free to comment.

Thanks a lot for viewing and have a nice day. :) :) :)

Why Reading Books Turned out to be a Passion

I am not that fond of reading books. I read stuff such as articles from various sources but not an entire book. I'm not even keen on shelling out money just to buy books. Books tends to collect dust after it has served its purpose.

Something "magical" (yes, I consider it magic :) ) happened along the way which changed my perception on the importance of reading books. A former boss introduced me to a book written by a famous lay preacher. The book was entitled "8 Secrets of the Truly Rich". And it was written by Bro. Bo Sanchez. That book started it all. That book opened my eyes on all the mistakes that I have done when it comes to financial matters. It made me realize that I was financially ignorant.

Several books in my possession

After that, I discovered Bro. Bo's other books on how we can simplify the way we live; that happiness can really be found by living a simple life even if we can afford the comfort and convenience brought by the modern age. I have been living a simple life since then. I have bigger dreams of course. But I have taught myself to set aside those dreams if it would mean complicating my life. I became contented with what I have right now. A simple house, a simple car and most of all a happy and loving family. Simple things makes me happy, which I think is the most important.

That's one of the influences I obtained from reading books, it keeps my feet planted on the ground.

Aside from books on finance, I now read books which gives me inspiration. Something that I really need to keep me pumped up. Especially during times when I feel that things aren't going according to plan. It made me realize that even if things went the other way, there are better things somewhere. I just have to look for the open doors and knock on the doors of opportunities because I believe that every human being were created with equal opportunities. We only need to have the guts to grab it. And once we got it, we just need to nurture it.

See what reading books have done to me, it taught me how to think in a very positive way. I am currently teaching myself to be happy all the time. I believe that a happy person has a happy disposition. A happy disposition results to better decisions. Better decisions result to a bright future.

So common friends, grab a book and be a happy and inspired person.

Have a nice day!!! :)