Investors have mixed reactions on what was happening on the market nowadays, The PSEi broke the 6,000 level today which closes at 5,971.05 with -3.41% decline from t’s close on Friday. Many believes that the next support will be at 5,800. Questions like “Should I cut Lost?”, Should I transfer my position?, should I close down my computer?, Should I sell “Company x” stock or not? , This are just common questions you can see in any forum about investment.
The market was down for almost 1 month and it all started last May 22 upon Ben Bernanke announcement for possible tapering of the QE.
As an investor we need to have goals and plan in every investment that we make. We need to understand that stock market is not meant to be for short term. In time like this if you buy stocks, you could get more stock with same value of your money last month. Peso Cost Averaging is a great methodology in investing.
Nobody knows when the market will rebounce, there might be some technicians that are telling things but nobody knows what investors will be thinking tomorrow or on the next few days or even months.
If you think that you cannot handle your lost, then make a cut lost. If you are for long term, then the market correction that we are experiencing today would not mean anything 10 years from now.
The best thing to do in time like this is to increase our cash flow so that we can have something to invest. Diversified your asset so you will not be much affected by the volatility of the market.
Bear in mind that we gain from stocks not only from price appreciation but also from dividends.
Here some reminders before joining stock market or equity funds:
- Equity Funds and Stock Market is not for Short Term but it is for Long Term
- You need to be insured prior to Investing
- You need to have Emergency Fund before investing
- You need to be bad debt free before investing
- Money invested in stocks and equity should not be withdrawn within 5 years of your investment.
- Do Peso Cost Averaging
- Equity and Stocks is a High Risk Investment but with a probability of High Gain
My YTD was reduced to +3.82%, but at least I am still on the gain side for this year.