Smart Pinoy Investor Academy

How to Invest Online in Philippine Mutual Funds

Last updated on May 16th, 2020

How to Invest in Philippine Mutual Funds Online (for Beginners)

If you’re a Pinoy beginner who wants to invest in mutual funds in the Philippines, this tutorial will help you do that.

Investing in Philippine mutual funds has never been this easy with the advent of online stock brokerage platforms. This development allows you to invest in Philippine mutual funds directly right on your computer or mobile phone screen.

(If you want a quick guide for beginners how to start direct investing in the Philippine stock market instead, you can download your free ebook here.)

Unlike before where you’d normally go through an individual agent to buy mutual funds, two of the most popular online stock brokerage companies in the Philippines are now offering mutual fund investments too together with their primary stock brokerage business.

These two online Philippine brokers are COL Financial’s Fund Source and First Metro Securities’ FundSmart.

Advantages of investing in Philippine Mutual Funds

A Philippine mutual fund is an investment company registered with the Securities and Exchange Commission (SEC), which pools money from many investors allowing them to create a bigger fund under a common objective agreed by the investors. This fund is then invested in specific types of securities to achieve its stated objective. Economy of size makes this pooled fund as a whole “more powerful” than the initially isolated individual funds in achieving a common goal understanding the risks involved.

With the different possible goals for the fund,  four main types of mutual fund are offered:

  • Money Market Funds invest purely in short-term debt instruments (one year or less).
  • Bond Funds invest in “bonds” which are really long-term debt instruments offered by governments or corporations.
  • Balanced Funds invest in a mix of shares of stock and bonds.
  • Stock / Equity Funds invest primarily in shares of stock.

Investing in a Mutual Fund (under Balanced or Equity types) therefore is an easy alternative way to invest in the Philippine stock market which requires a lot less time and monitoring on your part.

Little time because you just basically “give your money” as your investment and let the fund manager do the job of judging where to invest it and the needed subsequent monitoring. Compare this with direct stocks investing where you yourself do all the analysis (stocks selection) and trades (buy and sell) needed, something that would obviously demand more time from you.

Another good thing about Philippine mutual funds is you can start investing in it with as low as Php 5,000 only. There’s no required regular addition (or top-ups) but I’d personally recommend that you add regularly and really use it as your giant piggy bank for your long-term goals (at least five years).

Another advantage of a mutual fund over direct stock investing is the diversification it offers. If you’re buying stocks on your own, your 5k initial capital can only buy at most two stocks. But when you buy a mutual fund, you’re actually effectively buying a basket of stocks and other safer securities like government/corporate bonds. Diversification is one common investment strategy in managing the risk for any investment.

Risks in Mutual Fund in Philippines

One downside of a mutual fund over stocks is the additional fees involved in mutual fund investing, such as management and front-end fees. Look at these costs as your “payment” for joining in the mutual fund and riding on the expertise of its fund managers.  The good thing about online mutual fund platforms like COL Financial & FirstMetroSec is they are waiving (as of now) the normally charged front-end fees which means savings for you.

When it comes to possible returns on and of investment, with the very structure of the mutual fund, it’s easy to see that the main risk of losing money lies in the skills of its fund manager in handling the fund. A good way to judge this is to look at the consistency of the fund performance at least in the last five years. (Read >> Which is a better investment: Stock Market or Mutual Fund?)

Minimum Holding Period in Philippine Mutual Funds

There’s also typically a minimum holding period for your Philippine mutual fund investment, some with as short as 90-days. You can always cash out your investment earlier than this but you’ll be charged an early redemption fee.

Other details about the mutual fund, such as its performance and portfolio mix can be easily found as part of the resources page of your online broker, like shown below.

Investing in Philippine mutual funds online performance

How much you can earn investing in Philippine Mutual Funds

In terms of potential returns, mutual fund is ideal to be part of your mid- to long-term portfolio, typically with at least five years time horizon.

You can see below a representative historical performance of equity-type mutual funds in different holding periods, 1 YR, 3 YR, and 5 YR, as of December 15, 2016. It’s important to note though that just like in stocks investing, the returns of mutual funds are never guaranteed as this heavily depends on current market conditions.

Comparison Philippine Mutual Fund Performance Table

You can watch this video giving you guidance on how to find the best performing mutual fund in the Philippines.

How to buy Philippine mutual funds online

As I mentioned, you can buy mutual funds yourself via online brokers COL Financial and First Metro Securities.

Buying Philippine Mutual Funds in COL Fund Source

COL Financial offers mutual fund through its online platform COL Fund Source.
This platform becomes available to you right after opening an account with them.
You can choose from 20+ of mutual funds offered by the top 6 mutual fund companies in the Philippines and buy(invest in) them with ZERO front-end fees.

With COL Fund Source, you can:

  • Access 26 Mutual Funds offered by the country’s top 6 Mutual Fund Houses
  • Invest in Mutual Funds with only PHP 5,000 to start
  • Invest in Mutual Funds without paying for the Front-End Fees
  • Automate your Mutual Fund purchases for regular investing, and
  • Monitor your investments anytime and anywhere

If you already have a COL Financial account, you can readily buy your first mutual fund.
To explore and start using COL Fund Source, log in to your COL Financial Account and just click on the Mutual Funds tab.

COL Fund Source

You can also watch below video tutorial on how to buy/sell mutual fund shares in the Philippines with COL Financial Fund Source.

Buying Philippine Mutual Funds in First Metro Securities – FundSmart

Another online broker offering mutual fund is First Metro Securities under the Metrobank Group. It’s practically the same as COL Fund Source, offering mutual funds from top six mutual fund houses and also has no front-end sales charges.First Metro Securities FundSmart tutorial

Mutual fund with First Metro Securities

If you already have an account in trading broker First Metro Securities, then you can also consider buying mutual funds online as part of your diversification.

Below is a sample portfolio holding mutual fund PSFG (PHILAM Strategic Growth Fund) managed by mutual fund company Philam Asset Management, Inc. I just bought this yesterday (April 28 2017) so you will see a tiny loss, but I expect this to give returns after some time which I will update here. 🙂

UPDATE: Below is its performance as of September 19 2017 (after less than five months).

UPDATE: Below is its performance as of October 19, 2017 (after less than six months).

 

performance mutual fund investment Philippines online

This day, I also redeemed my investments (converted to cash).
That is, my money has earned around 10% profit after less than six months (not bad!).

actual performance mutual fund investment online

Final Comments on Mutual Funds Investing

As a final note, while mutual fund is an excellent choice for passive investors who simply want to have greater returns than what banks can offer, it’s important to remember the importance of goal setting and risk assessment in every investment you’ll take.

Fortunately, and in line with government regulations, online brokers offering mutual funds normally have its risk assessment questionnaire that will help you decide which type of mutual fund is best for you based on your answers to the questions.

Additionally, before you invest, ask yourself the purpose of each of your investment This way, it will be easier for you to manage your investment (and your emotions) knowing its original intended purpose. Many newbies fall to the trap of losing this mindset when they start seeing losses even if it’s not yet done within their investing time frame. As with stocks, you’d need to allow your mutual investments to grow over time to achieve optimal returns for your goals.

Hope this helped you in your search of where to invest your hard-earned money.

If you’ve got more questions, you can send them to me through my contact page.

Have fun investing,
oMeng

P.S If you want to learn more about another type of pooled-fund investment for passive investors, you can watch the video below discussing UITF (Unit Investment Trust Fund) available in the Philippines.)

Fees, Risk-Reward and Strategies – Investing in Philippine Stock Market

“I’m planning to put 30k this week…”

This is one of the comments I received in one of my YouTube video.

Nagtatanong sya san daw ba OK i-invest ito.

You see, the problem with our stock market now is it’s easier now for anyone to join the bandwagon of investors.

It’s not necessarily bad for our country…
It’s actually very good.

But when these people have extra cash in their hand but were not given enough guidance & proper foundation, they have this DANGEROUS tendency to dive-in deep down the market without their needed “oxygen”.

Una, they will earn a little.. and earn a little more..
They think they “got it” na.
Soon they become confident and go ALL-IN ..
and that’s where the disaster happens!

WIPE-OUT portfolio.

Good bye hard-earned savings/retirement funds. 🙁

So to help upcoming newbies,
I created a new learning video summarizing core investing lessons every investor, newbie or not, have to know.

From cash management to risk-reward assessment up to portfolio management.

This is really just the tip of the iceberg from my 10 years of investing in our stock market.  Very basic yet practical.

Access the video here.

And use the lessons in your investing lifetime.

Have fun investing,
Omeng

PS.
If you have other questions about investing and personal finance, just let me know.

Which is a better investment: Stock Market or Mutual Fund?

Last updated on May 15th, 2020

When it comes to investing in the Philippine stock market this 2019, which is better: Stock Market or Mutual Fund?

There are two ways of investing in the Philippine stock market.

The first is being a direct investor.
The second one is being an indirect investor.

Each one has its own advantages and disadvantages.
Depending on your personal circumstances and desired control, one may be more fitting for you than the other.

How to become a direct investor in Philippine Stock Market

An easy way to become a direct investor in the Philippine stock market is by opening your own trading account in a legitimate stock brokerage firm in the Philippines. By opening a trading account, you get easy and convenient access to buy and sell stocks in Philippine Stock Exchange (PSE).

The good thing is that these brokers paved the way to opening an online trading account by practically anyone, even OFWs abroad, and monitor the day to day performance of their investment anytime through the internet. (It’s just like Facebook but unlike seeing real-time updates about your friends in your news feed, in your trading account, you see real-time updates and fluctuation of the value your stocks investment on your computer or smartphone screen).

You can read a review of some of the popular online stockbrokers in the Philippines here.

Opening a trading account is the very first step you need to do to participate in the stock market directly. Once you’re done opening a trading account in any of these brokers, and added enough funds, then you can start buying shares of companies you like.

In this case, you’re all on your own.

This is what I mean by being a direct investor – you and you alone have all the control when to do all your transactions.

If you don’t do anything, your money will just be sitting in your account without any potential to earn.

If you decide to buy a stock, then you are free to do so thereby risking your money hoping for a favorable return.

If you decide to sell a stock, you can also do that anytime.

In fact, you can sell stock minutes or hours after you bought them (assuming, of course, you know what you’re doing).

At the end of each day, how much you earn or lose is entirely dependent on every decision you managed to play and execute.

From here, it is easy to see the two primary demands from a direct investor in the Philippine stock market – TIME to study and execute trades and SKILLS to come up with the best trading decisions.

Now let’s turn to become an indirect investor.

How to become an indirect investor in the Philippines Stock Market

The easiest way to become an indirect investor in the Philippine stock market is to invest in a mutual fund.

A mutual fund is an investment company that pools money from individuals (or institutions) and invests this pooled fund in financial securities – including bonds and stocks. Mutual fund companies in the Philippines are regulated by the Securities and Exchange Commission (SEC).

I call this option being an “indirect investor” because what you only need to do is to invest your money to a mutual fund company and let its assigned dedicated fund manager do all the necessary work to grow this money (or at least prevent it from losing) during the time period you’re invested.

What you can control when you invest in a mutual fund

Because you’re just placing your money in a pooled fund, you can only have control on two things with respect to the possible returns you can get in the future.

First is in choosing which type of mutual fund you will buy – which dictates where the fund is primarily investing in – equity, bond, balanced or money market (this is in the sequence of decreasing investor’s risk tolerance or aggressiveness).

Second is on the timing when to buy or sell more shares of it.
That is, you can have the option to buy more shares (or top-up) anytime or sell it back to the mutual fund company subject to its conditions.

However, you don’t have any direct control which exact stock the fund will buy or well, and when exactly they will do these trades. That is the job of the fund’s dedicated manager.

Also, since the mutual fund has fund managers and other operational expenses as a company, management fees are charged to your investments and top-ups which can decrease your potential returns.

In contrast, to direct investing, the mutual fund also usually has a minimum holding period, during which an early redemption fee is charged should you redeem(sell) your shares earlier than this holding period. (This is usually at least 30 to 90 days).

Below shows a general details overview of an actual mutual fund namely Philequity fund (an equity type of mutual fund).

mutual-fund-in-philippine-stock-market

Mutual funds generally perform pretty well in the long run.
You can also check here a comparison of the historical performance of various mutual funds in the Philippines. (Note that a fund’s past performance does not guarantee its future’s performance).

You can have both stocks and mutual fund

Personally, I have both investments in direct stock market and mutual fund.

I have a trading account in MakeTrade brokerage company, which enables me to perform my transactions all on my own. (I live in Metro Manila so I just requested them to pick up the accomplished application forms and other requirements from my office.)

MakeTrade as a broker provides lots of information, studies, and recommendations to its clients, but at the end of the day, only I, as a direct investor, can make the decision when to actually hit the buy or sell buttons in my account screen. If I find out that I made losing trade later, I can only blame myself and nobody else.

Also, I have direct control over how many times I will buy/sell, and when to do it. In fact, I can buy some shares of a company, and sell it after a few days, or even within the day (if ever I want too.)

An example is shown below where I bought shares of PLDT and sold it only five days after earning a little profit.

maketrade-how-to-invest-in-philippine-stock-market-for-beginners

The beauty of directing investing

This freedom to be on your own can be one of the beauties in direct investing.
If you know you can control something, your performance will then largely depend on you.

If you take the time to study, practice, and improve your trading skills over time, then your earnings will follow. Ultimately, you can become a one-man team, at the comfort of your home, who is able to perform better than professional fund managers.

This, of course, is easier said than done.
But I’ve seen people who were so passionate that they decided to do trading full-time.

Certainly, you can do both – investing directly in the stock market and in a mutual fund at the same time.

And just like a stocks portfolio, you can also monitor the performance of your mutual fund investment online.

COL Financial actually now offers mutual funds via COL Fund Source, in addition to its main stock brokerage business.

col-fund-source-mutual-fund-in-philippine-stock-market-2

COL Fund Source showing 9+% gain in my Philequity mutual fund

First Metro Securities’ FundSmart online stockbroker also now has its platform for mutual funds.

Forst Metro Securities FundSmart

With this service, you can monitor the performance of your stock and mutual fund investment on a single screen. (Read >> How to Invest in Philippine Mutual Funds Online)

From your review of their returns, you can then compare and do an assessment.
At the end, the decision is all up to you what to do next.

Action Plan:
My recommendation is to open both a stock trading account and a mutual fund account.
If you open an account in FirstMetroSec or COL Financial, you can immediately buy a specific stock or mutual fund with a single platform – no need to contact a third-party agent thus saving you some mutual fund entry fees.

Compare your performance after every some regular period (say every three or six months).
From here you will have an idea if you’re better off yourself directly investing, or you find out plainly clear that the fund manager can do a better job of growing your money for you. Do this regularly to help you decide where most of your money should be invested.

Better yet, you can start buying mutual fund first, invest a bigger share of your fund here, and allot a tiny portion of your fund to direct personal trading. With this small capital, you can then in parallel start your discovery to a  more profitable trading in the Philippine stock market.
(You can check a trading course here in case you want to learn all the basic necessary training and tools for more profitable trading.).

Below is a helpful video tutorial you can use when coming up with your strategy, either in Philippine stocks or mutual funds.

Have fun investing!
Omeng 🙂

COL Financial Tips & Tricks – Investing in Philippine Stock Market Tutorial

COL Financial Tips & Tricks – Investing in Philippine Stock Market Tutorial

Everyone stays at home now given the COVID-19 crisis we all face, but this can also be a perfect time to do better in managing your investments.

I just created a new video tutorial where I shared six practical investing tips & tricks you can do in case you are using COL Financial as your trading account.

These include how you can have easy access to its useful features and place your buy & sell orders in a much quicker way. You’ll also discover how you can avoid yourself being lured by others you meet in online forums, using edited portfolio screenshots.

These tips will be very useful if you are an active trader, but the lessons are equally helpful too for passive investors, especially newbies in the Philippine stock market.

The video is available here.
And I’m happy to see it’s well-received by its viewers. 🙂

WOW! big help to sir! thanks a lot.

“Thanks for this video! I am a new investor, and since we cannot go outside to meet other people, this video is very helpful on my use of col financial website.”

“Bilang newbie po ay malaking tulong po ang information nyo na eto..”

Happy watching & learning!

How to Apply Online for COL Financial Account using your mobile phone ( for OFW too)

How to Apply Online for COL Financial Account using your mobile phone ( for OFW too)

Good news!
If you want to start investing in the Philippine stock market but don’t have your trading account yet, you can now apply for your own COL Financial account ONLINE, even using your mobile phone.

Whereas before one would normally print-out COL Financial application forms and send it to COL business center, the newest online sign-up allows every Filipino to complete the application process all online. Even the submission of requirements can be done online too.

This is a much more convenient option if you are an OFW or your schedule simply doesn’t allow you to go to COL Financial office and business centers to submit the forms and requirements.

What are the requirements in COL Financial Online Application

You can open either an individual account, a joint account or an ITF (in-trust-for) account for your minor child. It’s also possible to create multiple accounts (if you’re the one who wants to separate your long-term investments account from your short-term trades.)

All you needed to prepare are the following requirements:

  • One (1) valid government-issued ID
  • Bank details (optional)
  • If employed or self-employed, SSS/GSIS/CRN and TIN
  • Birth certificate (for minors)

After online submission, you simply have to wait for an email containing your reference/account number which you can use for funding and eventually buying your first ever stock.

You can also watch this short video guide on how to accomplish this online sign-up really quick.
Click here >> How to Apply for COL Financial Account Online using your mobile phone.

Share the news with your family and friends.

Have fun investing,
Omeng

2020 Tips – How to get Pag-IBIG Loyalty Card Plus in 15 minutes

Last updated on March 3rd, 2020

2020 Tips – How to get Pag-IBIG Loyalty Card Plus in 15 minutes

Good news!

In line with the goal of Pag-IBIG in streamlining its offering of services, it has started issuing  its new Pag-IBIG Loyalty Card Plus to all its members.

What is Pag-IBIG Loyalty Card Plus and its benefits

This Pag-IBIG Loyalty Card Pus serves three main purposes.

First, it’s your official Pag-IBIG ID, bearing your name, photo and Pag-IBIG Membership ID (MID) number. This is enough ID card you can use in all your transactions with Pag-IBIG.

Second, it acts as your disbursement/cash card through will all proceeds from Pag-IBIG, such as loans and dividends from its savings program, will go. That means it will be easier for members to receive these funds and withdraw in all bancnet-affiliated ATM’s. These cash cards are released by two banks currently (Feb 2020): AUB and Unionbank. More on this later.

Third, as with the old Pag-IBIG Loyalty card which does not a bank chip in it, it remains to be a reward and discount card. Pag-IBIG has partnered with several establishments, stores, schools, hospitals and more in providing discounts to their products and services to all Pag-IBIG members.

Pag-IBIG Loyalty Card Plus and Online Virtual Pag-IBIG

Another nice thing about Pag-IBIG Loyalty Card Plus is you can use this card to create your account in Virtual Pag-IBIG online website where you can see your Pag-IBIG membership details, contributions, loans and other news and updates related to your membership.

You can even link your new cash card to your Virtual Pag-IBIG account to see all your card’s transactions and available balance in your Pag-IBIG online account. (It’s similar to having access to an online banking account.)

Check this post/video detailing how you can access your Pag-IBIG records online in Virtual Pag-IBIG.

What are the Requirements for Pag-IBIG Loyalty Card Plus

There are two main requirements when availing this card:

  1. You need to be an active Pag-IBIG member. That is, you should have your MID Number. If you don’t have this yet, then do the register to Pag-IBIG first.
  2. You should have an updated contribution to Pag-IBIG. That means you should have at least a one-month contribution in the last six months prior to the date of your application.
  3. You should be in the Philippines since it there has to be physical appearance as it’s necessary that they get your photo and biometrics.
  4. Lastly, prepare Php 125 as card fee and bring two valid ID’s, preferable government-issued ID’s.

Once you have the above requirements, simply go to the nearest Pag-IBIG branch and apply for your new ID.

How to get your Pag-IBIG Loyalty Card Plus

There are five simple steps that will happen during your application.
You will be assisted by a bank personnel here.

  1. Verify your membership ID with Pag-IBIG personnel.
  2. Fill-out Application form.
  3. Have your picture taken and your fingerprints scanned.
  4. Validate the information you provided to be shown on the monitor.
  5. Get your new card together with the PIN Mailer.

Where can I use my Pag-IBIG Loyalty Card Plus

Your new Pag-IBIG Loyalty Card plus are issued by either of two banks – Asia United Bank (AUB) or Unionbank. Important: Make sure you get the card together with the PIN Mailer envelope. The PIN mailer contains the temporary PIN you will use to activate the cash card functionality of your Pag-IBIG Loyalty Card plus. At this point, you will also receive an SMS/text message giving you your Account Number corresponding to your new card.

Make sure to activate first your Pag-IBIG Loyalty Card Plus in an ATM of your card issuer (AUB or Unionbank) before doing withdrawal. Once your card is activated, you can then make withdrawals from any Bancnet-affiliated ATM’s. Most if not all huge banks’ ATM’s are OK with bancnet. There’s also no maintaining balance needed for your new cash card.

As a rewards and discount card, you can check the full list of merchants Pag-IBIG has partnered with in their website.

How long can you get your Pag-IBIG Loyalty Card Plus

When I applied for my Pag-IBIG Loyalty Card Plus, I was able to complete the entire application process in 15 minutes.
This excludes the idle time I had waiting for my turn, so it would be good to come early to the Pag-IBIG branch and avoid waiting in long queues. (Bring a book to entertain yourself or watch videos in my channel 🙂 ).

Monitor your Loyalty Card Plus using Hello Pag-IBIG Mobile app

If your card is issued by AUB, you can also download the Hello Pag-IBIG mobile app powered by AUB, create your account and get access to monitoring and managing the cash card functionality of your loyalty card online.

With the Hello Pag-IBIG app, you can also unlock other features of your loyalty card plus such as bill payments, transfer funds, buy load, and send money just like those offered by online banking and digital wallet apps (GCash, Paymaya). Check this video – Online Virtual Pag-IBIG and Hello, Pag-IBIG Mobile app,  for more details.

Finally, you can also watch this video for more details about Pag-IBIG Loyalty Card Plus.

Got questions about Pag-IBIG Loyalty Card Plus?

Have you got your card yet?
Share your experience and questoins in the comments below.

2020 BEST Performing Mutual Fund in the Philippines

Last updated on January 20th, 2020

Wanna know the best mutual fund in the Philippines this 2020?

If you’re new to investing, one of the best investments you can start on is Mutual Funds.

Mutual Funds allow anyone to benefit from a lots of advantages inherent in pooled investment funds.

But just like anything, not all providers of Mutual Funds in the Philippines, also called mutual fund companies or investment companies, are created equal.

Some definitely are performing better than others.
And as an investor, you’d want to maximize the value of every peso you put into your investment
and make sure you’re invested only in the best ones.

In today’s video lesson, I have summarized the very basics of mutual fund investing as applied in the Philippines and outlined two simple ways how you yourself can find the best Philippine mutual fund out there.

After watching the lesson, you’ll no longer depend on someone else to do the assessment for you, and really discover which is the best performing fund in the Philippines this year.

 

Have fun investing (in the best one!),
Omeng

P.S. More learning videos coming so make sure you subscribe to my channel
and be notified for every new upload.

Top 3 Ways How to Lose Your Money in Philippine Stock Market

Last updated on September 18th, 2019

Everyone enters investing in the Philippine stock market with the goal
of increasing their capital.

Unfortunately, it’s not the experience of many.

In fact, there’s a study that says 85% of market players lose money in the stock market.

So in this video, I shared three ways how you can possibly lose money in the stock market.

By knowing these three areas, you will be able to see where your money goes and in turn, maximize your possible gain in each of your transaction.

I also listed down in the video the fees and commissions involved in each trading transaction that reduce possible earnings you have when investing.

You can watch the video below.

Happy Investing,
~ Omeng

P.S
Subscribe in my YouTube channel for more learning videos.
CLick >>> here <<<.

8 Simple Ways to Multiply Your Income Stream

Last updated on March 11th, 2020

In my years studying ways how to improve one’s financial status, I cannot suggest any other better way of achieving this than that of creating multiple income streams.

I mean suggestions like cutting down on your expenses, looking for better shopping deals and other similar measures, while certainly good, can only help you to some extent.

But soon this approach to one’s financial life will lose its power as we humans certainly will stop having a comfortable life if we keep forcing ourselves to live with smaller and smaller financial capacity.

Investing is just a multiplier of your wealth

I remember a good friend asking me what to do with his extra 50,000 money.
He said he just wanted to invest it in paper assets like stocks knowing that stocks can give better returns than what banks offer.

But when I started to dig down and explain to him the risks that stocks carry in the short term, he started getting confused. He suddenly became half-hearted to go with his plans.

Ultimately, the confusion can be seen to stem from his desire to get bigger return yet not wanting to be exposed to bigger risk. I wish I can share other financial instruments that has this risk-reward relationship, but this is simply not the case.

Instruments like stocks are riskier compared to savings accounts and bank deposits, but this greater risk is what makes stocks a good contender when compared to other instruments in the long run.

In the end, I summarized my point with a single line:

Investments are just multiplier of your income.

Your potential earnings from this will depend on the size of your capital.
Even if you earn 20% a year, one that is already spectacular, if your working capital is only 10,000 pesos, that would only give you 2000 after a year.

Compare that if you had 1M, then a 20% annual ROI would give you 200k after a year.   Now we can start talking about changing the quality of your life. 😀

(If you have a lot of confidence in your prospective investment and wish to increase your capital, you can choose to seek a loan in the Philippines through any trusted bank. Though it comes with its drawbacks, increasing your initial capital through a loan could allow for a bigger payday once your investment pays off in the end.)

Shift your focus

So if you want to drastically change the quality of your financial life in a shorter timeframe, you have to shift your focus from investing wealth to creating wealth.

Especially for starting employees who are just starting out in life, this kind of mindset can really make a huge difference.

Unfortunately, our society has trained most of us to work our whole life only for one income stream – that of Salary. Specifically, it’s called an Earned Income. An active income too – one that exchanges your time for money. But since our time is limited to 24 hours a day, this, in turn, becomes very limited too.

Here’s the good news!

Other income streams are out there waiting for you.

how to invest in philippine stock market create income

Profit income is one that comes from buying and selling.
And with online platform, it’s now easier to do this and reach out to a wider consumer market. Here, you’ll have to learn some life skills like marketing.

Interest income is another income stream from lending money.
Interest payments from lending money to companies, formally called corporate bonds, is an example of this. Other ways of doing this are possible more informally.

For paper assets like stocks, mutual fund and UITF in the Philippines, one can earn cash Dividend income and Capital gains with their potential increase in value.
You can watch the video below giving details about receiving dividends when investing in the Philippine stock market.

Another good income stream is Rental Income from renting a real estate.
Owning a property can also have an attached capital gain.

And with the digital world, you can easily earn Royalty & Internet income from your ideas that can solve other people’s problems or give them some pleasure. My Youtube tutorial videos for example, which help people learn about how to start investing in the Philippine stock market, has started giving me a regular income from Google ads. It may be small now, but the fact that it’s passive is what makes it interesting for me. I don’t have to wake up in the morning, join the traffic rush and please my boss first in the day to earn this. I can sleep all day and money keeps coming the same.

The times have changed and our financial strategies have to adapt to these changing times. When we think about the richest people we have now living the good life, one common quality stands out among all of them – the ability to create giant multiple cash machines.

Our normal education trained us to be functional citizens of our society, which is actually good, but this initial education should only be the start of greater education that this life wants to teach us.

Be open. Explore. Focus on ways of creating multiple income streams… one by one.

Soon, you’ll thank yourself for sticking to this life game.

Have fun investing (and more funds to invest!),
oMeng

PS: Two days left for your discount!
Want to learn to create wealth from the stock market the trader way?
Learn more about Technical Analysis, Market Timing, and Portfolio Management through our Full Trading Course. Click here for more details how to get your access.

How to Invest Online in Philippine UITF (Unit Investment Trust Fund) for beginners

Last updated on July 30th, 2019

How to Invest Online in Philippine UITF (Unit Investment Trust Fund) for beginners

There are two ways to start investing in stocks – direct investing and indirect investing.

Direct investing is when you open your own trading account with a stockbroker company.
I call this direct investing because you do all the activities yourself in this way.

These activities include funding your account, finding which specific stocks to buy/sell (which could demand lots of time of study) and actually executing the buy and sell orders on your computer screen. You totally don’t need anyone, aside from your funded broker account, to make your profits in stock market since you can do all these things at the comfort of your home just with your gadget connected to the internet. (If you want a quick guide for beginners how to start investing in the Philippine stock market, you can download your free ebook here.)

If you want to invest in, say the company that manages and operates the giant SM malls, then you can just log-in to your trading account and buy SMPH stocks  (SMPH is the stock code of SM Prime Holdings) even with your smartphone. You can also always see how your money fluctuates with the movement of the market on your gadget screen.

Direct investing could be overwhelming for a beginner as with any undertaking at the start, but it becomes very easy to do once you get the hang of it. If you are serious in actively managing your investment, this could be the path for you. Since you are the direct investor on this, you also take full responsibility for the possible losses you can incur.

For passive investors…

But there are a lot of people who have no time or interest to study about how stock prices move and really monitor their investments on a weekly (or daily) basis but instead just wish to get better returns than what ordinary bank deposits can offer. These people include full-time employees, OFWs abroad or financially-established people or anyone who has excess money to invest on top of their normal daily needs.

They simply want to “invest their excess money” hoping that after some time,  they get their money back with decent returns.

That’s where indirect investing comes in, which could be divided into two – UITF (Unit Investment Trust Fund) and Mutual Funds. These two operate very similar since they are just variations of the general pooled investment fund from several investors being invested into a predefined types of investments, and actively managed by a professional fund or investment manager.

I call this indirect investing because the people investing don’t have direct control as to what specific securities the investment fund will buy, except on the allocation of investments of the fund they will choose. In other words, you can choose whether your money will be heavily invested in stocks, bonds, or a mix of both (thus we have the Equity, Bonds and Balanced types of these fund), but you CAN’T control that your investment fund buys shares of SMPH, Meralco or Jollibee for example.

UITF in a nutshell

I have shared in a previous post how you can invest in a mutual fund online. Read here>> How to Invest in Philippine Mutual Funds Online.

UITF operates the same as mutual fund investing wise, except that the fund is managed by a bank in UITF, as opposed to a separate investment company managing a mutual fund.

UITF also just pools the funds of investors to create a large fund which in turn is managed by an investment manager.  They are medium- to long-term investments that have historically better earning potential over a long horizon than traditional bank deposits. )I’d recommend giving your money invested in UITF or mutual fund at least five years time horizon).

The greatest advantage UITF (and mutual fund) gives is the professional management of the fund. If the dedicated fund manager is good enough, it could give you better returns that can even beat benchmarks, with you doing nothing. The disadvantage also stems from this fact – UITF has fixed management costs to cover all its expenses, whether the fund performs well or not, thus decreasing your actual earnings.

UITF available in the Philippines

In the Philippines, most major banks offer UITF investments (see member banks below from uitf.com.ph as of May 6 2017).  Individuals can open a UITF account with as low as Php 10,000. This amount already forms part of your initial investment. Once your account is approved, you can add more anytime you want, but this is not a requirement. Still, I suggest that you add regularly and do top-ups remembering that you’re in UITF for the long haul).

UITF also has a minimum holding period, so you will incur a penalty should you decide to redeem your investments earlier than this holding period.

Opening a UITF in the Philippines

Now I’ll share how I was able to open an UITF account in Security Bank. The process should be the same with other banks as UITF is heavily regulated by Bangko Sentral ng Pilipinas (BSP) to protect the investors.  The steps are actually very simple.

Step 1: Fill-up the application form.
You can do this online or in the branch of the bank of your choice.

For Security bank, you can do this online here and clicking the Invest Now button.
You will be guided in answering the application form and once submitted, you will receive in your email a soft copy of your accomplished application forms. Print the forms and bring them to the bank branch nearest to you.

Step 2: Just go to their Account Officers and give the print-outs.
Affix your signature as needed.
Once all is checked and fine, then you will just have to wait for 3-5 days for your account to be approved and created. You will have to go back to the branch at this point to receive your certificate of participation, a proof that you have UITF account with them. This is where the account opening process ends. If the bank has online banking facility, you should be able to see your account in there too .

UITF Philippine Performance Monitoring

If you want to add to your UITF, you can do this through online banking, using the Subscribe facility.

You can also monitor your UITF performance online, so you see exact figures how your investment is performing.

Lastly, you can redeem anytime, that is you encash your investment, which in turn will be deposited directly to your nominated beneficiary account you entered during your application. Just take note of the minimum holding period that applies to your fund to avoid the related penalty.

Below is my actual UITF which I opened with the minimum initial investment of 10,000 pesos at the end of March 2017. As of  May 5 2017, its market value was at 10,599.53 pesos. Pwede na!

With the good performance of the Philippine stock market recently, the market value of my UITF has increased to 11,005.91 as of June 8 2017.  That translates to more than 10% gain in a span of less than three months.

UITF Philippines

Comments on UITF

Overall, UITF is a good place to invest your money in for long-term purposes, (I say, at least seven years), like retirement.

If you want your money back in say less than three years, I won’t really recommend it for you.

But if you’re in it for the long-haul, you can try it and reap the benefits of a disciplined long-term investing. Just start initially with Php10k, and you can add say regularly a month, say 2k, and build your wealth through time. Regular addition of investments (or top-up) is not really a requirement when you invest in UITF, but history has shown that doing Peso Cost Averaging with pooled funds like UITF (and Mutual Funds) can be good in the long run.

For a more comprehensive review and comparison of UITF performances of different Philippine banks, you can visit www.uitf.com.ph.

Just remember that with any other legitimate investment, past performance is not a guarantee of its future performance.

Have fun investing (in UITF’s!),
– oMeng  Tawid:)

P.S.
If you want to learn more about investing online in Philippine mutual fund, you can watch the video tutorial below.

How to Apply for SSS Salary Loan Online (and get it in two weeks)

Last updated on September 17th, 2019

How to Apply for SSS Salary Loan Online (and get it in two weeks)

SSS Online Philippines website now allows any eligible SSS member to apply for an SSS Salary Loan online!

This is a better alternative to the in-branch SSS application provided you already have an active MySSS online Account.

Just for the sake of trying, I tried applying for this benefit online on their website and was surprised to receive the cheque in two-weeks’ time. It was a Php 32000 Salary loan upon my first loan application less 1% processing fee giving me a net cheque amount of 31, 680.
(Please be aware that the initial loan amount could vary, depending on your contribution so far.)

SSS Salary Loan Payment Amortization

The following table shows the payment schedule spread within two years in 24 equal monthly installments. The loan is charged a nominal interest of 10% per annum. For employed member-borrower, the first salary deduction shall start on the second month following the date of the loan.

SSS Salary loan details payment how to apply

SSS Salary loan how to apply payment schedule

SSS Salary Loan  Benefit & Eligibility

Just to reiterate, I did this SSS salary loan application for trying’s sake and don’t really recommend incurring a loan especially if you have poor discipline in payment and money handling. I presently don’t see a need in my life for any loan (praise God!), but this info may be helpful for others who could have valid short-term credit needs.

Another thing to note should you decide to take out a loan: the processing time may vary in your case depending on the type of support that your employer will give in your application. Specifically, your employer needs to certify your application before SSS can proceed with the next steps. Make sure you follow-up your employer (or HR department) for that needed action from their end right after submitting your application just to make sure they are informed.

Your eligibility and the applicable loanable amount will also depend on the number of contributions you have made and other past transactions or obligations you may have had with SSS.

How to apply for an SSS Salary Loan online in the Philippines

There are only three simple steps I did to apply for the loan:

(1) Create a MySSS account online
Go to https://sss.gov.ph and in their homepage, click the button for registration.
This is a one-time registration only and you will need your CRN/SS number and a working email address.

 

(2) Apply for a Salary Loan Benefit
Once your account is active and you have a working SSS online account, then you can try to apply online for SSS Salary loan under E-Services.

SSS Apply for Salary Loan Philippines

Upon following the steps, you will get your transaction number.  At this point, inform your employer of your application after submission.

 

 

 

 

Below is additional info from MySSS website:

A borrower may file the salary loan application at the branch nearest the place of residence or business. A member who is registered at My.SSS can submit the salary loan application online. The salary loan submitted online by an employed member will be directed to the employer’s My.SSS account for certification, hence, the employer should also have an SSS Web account.

 

OFW members may also file their salary loan application at the SSS Foreign Representative Offices in selected countries. In case there is no SSS office in a particular country they may send their application and supporting documents to their relatives here in the Philippines and authorize them to file at the SSS branch. Documents issued in other country should be duly authenticated or certified by the Philippine Consulate Embassy.

 

Note: The employer shall submit an updated Specimen Signature Card (SS Form L-501) to be updated annually to avoid delay in the processing of salary loan applications.
Complete details including eligibility and filing procedures are available here.

This is also a good time for you to explore the site and verify the recorded contribution payments your employers, including the previous ones, have made.

(3) Wait for the cheque from SSS
The waiting begins here assuming there’s nothing that could delay or reject your application.

In my case, it took less than two weeks before my employer sent me a notice that the cheque had come from SSS and is available for pick-up.

That’s just it!

Overall, the process is easy and smooth for a first-time loan.

UPDATE AUG 2 2019:

The My.SSS online account now also has new features for a member to monitor payments for the SSS Salary Loan. Under E-Services >> Inquiry, you can see the status of your existing loan and the payments posted so far.

SSS Salary Loan apply online status

Select Loan Status/Loan Info under Loan menu.

monitoring how to apply SSS Salary loan online Philippines

Clicking the Salary Loan lets you see your Statement of Account & Loan Payment Details.
In my case, more than two years have passed which means I’ve fully paid my first ever salary loan.

Statement of Account & Loan Payment Details

I checked once more the option to apply for a new loan, and I see my allowable loan amount has increased to 34,000 (from the previous 32,000).

SSS Salary loan amount increase

If you have more questions, you can write it in the comments below or contact SSS directly via email (member_relations@sss.gov.ph) or thru their Facebook page.

– Omeng Tawid 🙂

Four Investing Tips for Beginners in Philippine Stock Market

Last updated on September 9th, 2019

Do you want to start investing properly in the Philippine stock market even as a beginner?
Investing in the Philippine stock market is easy.
However, whether one will be profitable is a different yet more important question.
(If you want a quick guide for beginners how to start investing in the Philippine stock market, you can download your free ebook here.)

In fact, this is a common challenge, especially for newbies.
With no enough experience and limited knowledge, they may have incorrect assumptions that could lead to losses when starting this venture.

This is what happened in one OFW who shared his realization.

And I have seen this happened to more people simply because of failing to do enough study before diving in.

How to avoid losing big when starting in the Philippine stock market?

You can watch the video tutorials below sharing some quick lessons and strategies for beginners in the Philippine stock market.

But in this post, let me share three simple tips you can readily apply as a newbie:
(If you want a quick guide  for beginners how to start investing in the Philippine stock market, you can download your free ebook here.)

(1) Start small and grow through time.

Starting small allows you to limit your possible losses while you’re not yet used to investing.
There are as many ways to earn from your trades as there is to lose money, so
this simple principle minimizes the damage you can incur in case you make a wrong move.

The stock market will always be there, so never rush your learning curve.

(2)Consider investing first in Mutual Fund.

The good thing about online stockbrokers now in the Philippines is they also allow their clients to invest not just in stocks but also in Philippine Mutual Funds. You can watch below video tutorial on how to invest in Philippine mutual funds for beginners.

Shortly, Mutual Fund investment companies pool money from several investors and invest this pooled fund in an instrument in accordance with its design (with respect to its goals, risk tolerance, etc). Because of the variation of the purpose and investing time horizon of investors,  an investment company usually has several types of mutual fund offering, all of which are managed by a seasoned Fund Manager. And among these types is the Equity Type which is a mutual fund heavily invested in a basket of equities or stocks. It is this basket of stocks that also gives you the mutual fund benefit of “instant diversification”. Diversification is one form of minimizing risks in investing.

In short,  if you want to have the feel of investing in stocks but want to minimize the risks that come from limited knowledge as a newbie, an Equity type mutual fund is a good alternative to start with.

In  COL Financial and FirstMetroSec, you can buy a mutual fund from the biggest vendors just like buying stocks. Through time, you will see that your investment in a mutual fund will also fluctuate, same as what would happen should you decide to buy individual Philippine stocks. The advantage here is you ride on the experience of the fund manager in terms of getting the best returns for your money. This is a much safer bet as compared to counting on yourself as someone totally new who may be making buying decisions based on whatever “tip” you see in around. You can learn more about online investing in Philippine mutual funds here.

(3) Slowly experiment with giant companies.

Once you have enough feel after investing in a mutual fund, you can then choose to invest directly in specific stocks. On this, I’d suggest that you choose blue-chips, or those stocks comprising the Philippine Stock Exchange index. This ensures that you’re investing in the biggest companies we have, and therefore exposed to less fluctuations compared to penny stocks.

Another option is choosing Stock Picks of your brokers in their long-term sample portfolio.
Below is a sample from COL Financial (pls don’t rely on the stocks list in the image since it’s already outdated).

Philippine stockbroker COL Financial Stock Picks

While brokers’ recommendations is never a guarantee that you will gain right away, you can at least be sure that there are some studies made in coming up with their stock picks.  Just make sure that you’re looking at their long-term recommendations (usually six months-1 year) and not on their short-term guides which are designed for traders.

Still another option is to bet on the index with Exchange-Traded Fund (ETF).
You do this very similar to buying specific stocks using stock code FMETF.
This ETF mirrors the whole PSE index and therefore follows the trend of the PSEi with very tiny different. Remember that our PSE index is composed of 30 representative companies from several industries so when you buy an index, you’re effectively buying a basket of stocks already, which is already a form of diversification.

Index-investing is actually a good way for people who just believe the market and our country as a whole will rise without the need to handpick and do the stock-picking analysis yourself.

ETF or Exchange-traded fund in Philippine stock market

Do a mix and match

Of course, you can do a mix and match of these. You can invest most of your money in a mutual fund or index fund, and invest a small portion in a specific high-conviction stock you personally screen. After some period, say from six months to three years, you can see which is much better for you: mutual fund investing, index investing, or doing your own thing.

(4) Trade with your play money.

The three tips above pertain to long-term investing.

But if you really want to gain real experience in the heat of active trading, you can do so with play money. By play money, I mean money you can really afford to lose. This mindset allows you to separate your emotions from your money which is a very common challenge of new traders.  At this point, just remember that proper trading follows exact rules, violating which means you’re entering into gambling. This means, at the least, setting up your own rules – the entry and exit points – before you even go into your first trade.

Doing the above approach will certainly lead you to some lessons and open you up to possible mistakes and hopefully improvements. And that is the best thing about the stock market: with continuous experience and humility to start small, and the humility to grow through time learning from mistakes, one can become better and better, rewarding you until your old age. Does that sound good to you? 🙂

Have fun investing,

oMeng 🙂

BDO Nomura Review – How to Invest Online in Philippine Stock Market

Last updated on February 20th, 2020

BDO Nomura Review – How to Open a Trading Account Online in Philippine Stock Market

If you are a Filipino anywhere in the world who has an online BDO account, and want to start investing in the Philippine stock market, then you are just a few clicks away from buying your first stock.

(If you want a quick guide for beginners how to start investing in the Philippine stock market, you can download your free ebook here.)

This is after BDO Nomura Securities Inc. opened its doors to small retail investors, allowing the opening of  Philippine stock market trading account all online.

About BDO Nomura PSE Broker

BDO Nomura is a result of joint venture of the Philippine’s largest bank BDO Unibank Inc and Japan’s Nomura Holdings Inc.  The deal has renamed PCIB Securities, a securities dealer and broker with a seat in the Philippine Stock Exchange, to BDO Nomura Securities Inc. PCIB Securities was one of the subsidiaries acquired by BDO years ago when it merged with Equitable PCI Bank resulting to its rising as the country’s largest bank then.

According to BDO, the following are three reasons why it’s good to start buying / selling stocks through their brokerage arm BDO Nomura:

1. You can apply, fund your account and trade all online – no need to go to the branch!

2. There is no minimum investment amount to start with and no maintaining balance required in your account

3. You get the latest market news and research, delivered, daily, weekly and monthly; useful for any type of investors – from beginners and experts.

How to Open a Trading Account in Philippine Stock Market with BDO Nomura

Opening a trading account is very easy as long as you already have an online BDO banking account.

The fact that you already have an active BDO banking account made it possible for you to open a trading account all online without the need for personal appearance.

That means no hassle for you in printing and submission of physical application forms which are very common challenges for Pinoys based abroad or those living in the provinces far from central cities. All you need to have is access to the internet and an active online BDO banking account.

Again, the steps below assume that you already have an online BDO banking account. This is important since you will be using your online BDO banking user ID when logging in to BDO Nomura trading platform. If you don’t have this yet, then do this preliminary step first.

Step by step Account Application in BDO Nomura

For those who already have an online BDO account, then just follow these few steps:

STEP 1: Go to BDO Nomura websitehttps://www.bdo.com.ph/bdonomura and click in the upper right-hand corner the Online Trading > Enroll Now.

how to invest in philippine stock market for beginners with BDO nomura (0)

STEP 2: Log-in using your BDO Online Banking User ID and password.

how to invest in philippine stock market for beginners with BDO nomura (1)

STEP 3: Enter the one-time password (OTP) you received via SMS on your mobile phone.

how to invest in philippine stock market for beginners with BDO nomura (2)

STEP 4: You will be able to read the Instruction and Consent form. Just tick the “I have read fully understand…” box.

how to invest in philippine stock market for beginners with BDO nomura (3)

STEP 5: Click on I Agree in the Terms and Conditions in the next screen.

how to invest in philippine stock market for beginners with BDO nomura (4)

STEP 6: You will then need to fill out the Investor Profile and Suitability form.
Just provide all the answer needed and click Next.

how to invest in philippine stock market for beginners with BDO nomura (5)

STEP 7: Re-type the displayed CAPTCHA code, then click Submit.
Review the details provided in the next screen and click Confirm.

how to invest in philippine stock market for beginners with BDO nomura (6)

 

AND YOU’RE DONE!

how to invest in philippine stock market for beginners with BDO nomura (7)

Just wait for the approval of your application which will be sent to your email.

In my case, I was able to receive the approval email the day after I submitted my online application, so it’s really quick. This email contains your Customer Code Number which is your unique client code, with the attached copy of your Letter of Instruction and Consent, Terms and Conditions, Investor Profile and Suitability Test (which you completed during your application)

how to invest in philippine stock market for beginners with BDO nomura (8)

 

Another email will be sent to you the next working day indicating your Control Code.  This control code is an additional security check you use when buying or selling stocks.

The email may appear a little weird because first, it has a subject PSETRADEX | FORGOT PIN which confusingly has no mention of its connection to your BDO Nomura application in any way. (Just bear with this 🙂 )

how to invest in philippine stock market for beginners with BDO nomura (81)

 

Once you receive this email containing your control code, you can log-in back again and you will be prompted to change your control code in your first log-on.
bdo-nomura-broker-how-to-invest-in-philippine-stock-market

Once your account is all set, you can now proceed to the next stage of stocks investing which is funding your trading account to buy your first stock.

Update – Feb 14 2020

You can watch this video highlighting the latest developments about BDO Nomura this 2020 with regards to funding and buying/selling stocks.

 

How to Do Funding of your BDO Nomura Account

You can do funding of your BDO Nomura trading account through your BDO Nomura Settlement Account.

To see your assigned BDO Nomura Settlement Account Number, login to www.bdo.com.ph/bdonomura using your BDO Online Banking user id and password.

Go to the Deposit/Funding Menu and your assigned Settlement Account Number is already displayed in the “Transfer to” field (see below illustration). You may already fund your Settlement Account through this facility should you wish to add trading buying power.

Once your trading account has enough funds, you are then ready to buy your first stock! Yahoooo!

BDO Nomura Trading Platform

Currently, BDO Nomura uses what is called as PSETradex Explore.
It’s a web-based trading terminal that allows its users easy access to a wide array of market and stock information and quick trading actions. Some of its features include Watch list, stock info and charts, portfolio monitoring and tracker records.

Navigating through the platform may be overwhelming at first so just bear with the learning curve phase. 🙂

Below is a sample actual transaction for buying 110 shares of Metrobank (stock code MBT).

how-to-invest-in-philippine-stock-market-for-beginners

 

And just like other stockbrokers, you will also be receiving via email a confirmation notice of every matched buy or sell order you made, with the breakdown of expenses.
For breakdown of fees and commissions, you can read this post: Costs of Trading in Philippine Stock Exchange.

how-to-invest-in-philippine-stock-market-for-beginners-2

how-to-invest-in-philippine-stock-market-for-beginners-4

BDO Nomura Stock Portfolio

Once you have bought your first stock, you can then see your stock portfolio on the homepage each time you log-in, as shown below.

To see the actual gain or loss, you need to click Trade to go to the trading platform where you make your buy/sell order. For my first stock transaction above,  my 110 shares of MBT as of 04-11-2017 has gone up by 1.47% which is equivalent to unrealized gain of 137 pesos (still better than banks’ returns) :).

BDO Nomura Statement of Account

BDO Nomura also sends Monthly Statement of Account as an attachment via email to give you a summary of your account and stock holdings every end of the month. It’s a good habit to save this as part of your record-keeping.

BDO Nomura Statement of Account

Selling your stocks will go through a process similar to when you buy it.
This selling is necessary to convert your stocks to cash which in turn you can withdraw.

That’s it!

I guess the best thing about this BDO Nomura tie-up with BDO is the cashless transactions you can make if you already have BDO account. Their researches though still have a lot to improve compared to other online brokers but I believe it will soon catch-up in its services with time.

In case you have other questions, you can send it to their support team using their contact page or maybe check first their FAQ’s.

If you have more general starter’s questions, you can also send me an email via my contact form here.

Have fun investing,
Omeng

P.S. If you want explore also investing in pooled funds, like Mutual Fund and UITF, available in the Philippines, you can check the blogposts below.

How much can you earn investing in Philippine Stock Market?

Last updated on May 1st, 2020

Investing in the stock market primarily offers its investors two ways to earn money.

These two are called (1) Capital Appreciation and (2) Dividends.

Thus asking how much you’re gonna earn will depend on how good you are in maximizing these two means of making your money work hard for you.

Let’s tackle the first one.

Capital appreciation, as the term suggest, means that your investment capital has appreciated or gone up due to the increase in price per share of your stocks.

There are two things to remember when it comes to capital appreciation.

First, capital appreciation in stock market is never guaranteed.
An investor should not expect that his investment in the stock market will surely appreciate after some time, even after a long time actually. There is simply no such thing!

Ultimately, the price behavior of any stock, whether it will go up or down, will depend on the prevailing supply and demand of the stock each trading day.

Second, capital appreciation can also turn to capital loss. This could happen when investors lose confidence in the future of the company which translates to investors selling their shares ultimately pulling its stock price down. This is the main risk involved in stocks investing.

Unlike capital appreciation, dividends as a way of earning from the stock market is easier to managed. Briefly, giving dividends is one way for the company to actually share a part of its earnings with its shareholders. This could be in the form of cash or additional stocks, credited directly to the account balance (if cash dividend) or stock portfolio (if stock dividend) of the investor.

One thing to note about dividends is this is also not guaranteed.
Whether a company will give dividends or not will depend on the decision of its board of directors usually done on an annual basis. There could also be rare instances when a company cancels its dividend payout already announced.

An Actual Example

Let’s see how this translates to an actual example.

Cebu Air Inc (stock code CEB), the company operator of the leading brand in low-cost air travel in the Philippines, is a company that is enlisted in the Philippine Stock Exchange. That means its shares can be bought through our own Philippine stock market. (If you’re flying with Cebu Pacific Air Buses, you can probably get part of your airfare by buying shares of this company and making a profit out of it).

Let’s talk first in terms of dividends.
Luckily, CEB is one of those companies that give out dividends.
Its board of directors has declared the following dividends in the year 2016.

how to invest in philippine stock market for beginners 3 dividends

 

Since I had shares of CEB as of record date, I was part of the list of its shareholders eligible to receive this dividend (total of P2.00/share).

This is already clean money for me!

Below is the dividend notification sent to my email.

how to invest in philippine stock market for beginners 4

So far so good for dividends!

If you want to learn more about dividends and how to earn it, you can follow this blog post.

Now let’s examine how it fares when it comes to capital appreciation.

For the purpose of illustration, we’ll check its price history in the same period of the previous year, starting from August 19, 2015, when its price was at 90.30 pesos per share.

Imagine you’re investing at this point, your 10k capital could buy (10,000/90.30) = 110 shares including all fees and commissions.

But what happened in the next six months could be the total opposite of what you’d expect as its investor.

how to invest in philippine stock market for beginners

Instead of making capital appreciation, it turned out to be a case of capital loss, with its price slowly sliding down to 82.55 after six longs months of waiting. Certainly not good if you need your money back for some reason – you’d be selling at 8+% loss.

2016-08-15_4-21-31

What happened after another six months, up to today, Aug 15 2016, is, however, a totally different story.

After struggling to reach its original price, gaining a little momentum in mid-May of 2016, and consolidating at around 95-100 pesos level from June to July, it finally had its breakout end of July and reached new highs in the last 52 weeks.

how to invest in philippine stock market for beginners after

So imagine you didn’t sell when you had 8+% loss, and instead hold your investments, then you’d have earned a nice 32% (plus the Php 2/share cash dividend!) That’s certainly way bigger than what the banks could offer!

2016-08-15_4-21-31

You could see the entire picture of what happened during that 1 whole year period

how to invest in philippine stock market for beginners 02

Hindsight is always 20/20

But before you get excited with these figures, we have to remember that we’re doing all this calculations in hindsight. In other words, nangyari na! It’s easy to brag these gains when everything had already happened. It’s a totally more difficult decision-making process when you deal with the actual present market conditions.

Also, one needs to answer the question of what would be a better decision – selling the shares now if one believes the price will go down, or holding it even longer if one believes that there’s more room available for the price to continue inching up.

These questions, in turn, is related to the timeframe consideration and market timing expertise of the person investing. So we’re back here to the basic foundation of investing – drafting the goals, knowing the time horizon, and coming up with the investing (or trading) strategy of the person given his personality, skills, capital, and goals.

There you have it –the factors affecting your possible returns/loss as a stock investor.

Your strategy is up to you

Of course, your actual strategy can deviate from the one discussed above – which is merely a BUY-and-HOLD strategy.

Another strategy, for example, is the monthly buying of its shares, in effect accumulating shares of a great company especially when its price was down. By regularly buying shares especially when the price is down (as long as the reason for sell-off is unwarranted), one is able to maximize the returns with the cheaper levels the stocks are bought.

See for example the actual returns of this strategy coming from Truly Rich Club of which I’m a long-time member. They do this with their strategy called Strategic Averaging Method. You can learn more about it here.

how to invest in philippine stock market for beginners 23

(You can check what’s inside Truly Rich Club here.)

Conclusion

So going back to the question  – How much can on earn investing in the Philippine stock market,
we found out that the answer will depend on
(1) the skills of the investor when it comes to market timing  – this affects capital appreciation.

(2) the time horizon of the investment

(3) the dividend rate of the stock (if there’s any)

(4)the capital/financial resources the person has

(5) and the specific strategy to be employed (as a way of maximizing the three above).

Just remember that the time horizon put into investment won’t directly translate to better performance. In other words, even if one is invested in as long as ten years or more, if the stock price doesn’t follow an uptrend and improve over time, the long time horizon one is invested is useless. The longer time only allows the investment to ride the short-term fluctuations in its long-term uptrend (if this turns out to be the case), ultimately rewarding its smart investors.

You can also watch the video below so you appreciate better these factors as they play in an actual scenario in the Philippine stock market.

Have fun investing,
Omeng 🙂

Tips, Tricks & Traps for new pinoy investors (Free webinar)

Last updated on November 2nd, 2015

If you are new investor in the Philippine stock market, this free tutorial is good for you.

Some of the lessons shared are

  1. Maximizing your every invested peso
  2. Resources where to get good stock picks
  3. What to avoid as new investors
  4. Common mistakes newbies do
  5. and answering frequently asked questions

 

If you want to learn more about Truly Rich Club & SAM (Strategic Averaging Method) mentioned in the video, you can click here for a short tutorial.

If you have not yet started investing, It will be  really good for you to watch this video  answering the question HOW TO BEGIN INVESTING so it will be easy for you to follow the discussion in the above seminar.

(1) The Open-Fund-Win step by step guide how to start
(2) How to fill out account opening application forms
(3) What to expect when opening an account
(4) Choosing between Mutual Funds or Stock Investments or Insurance
(5) Choosing between trading and investing
(6) And some of my personal investing practices

Also pls keep a copy of your quick start guide document here. It will give you a brief overview where to start investing.

Have fun investing
oMeng

How to choose what stocks to buy & sell in Philippine Stock Market

Last updated on September 9th, 2019

Choosing what stocks to buy and sell in Philippine Stock Market is the real game when it comes to investing.

In this post, I’ll be giving you some practical guidance to completing this step.

It’s actually easy to buy and sell stocks in Philippine stock market (the manual part of it is contained in this tutorial >> How to Buy and Sell Stocks in Philippine Stock Market), but whether the action will give you profits is another more important question.

In fact, this is one common question coming from any newbie investor: What stock can I buy now?

The answer, of course, depends on several factors, but each one of them practically boils down to your target destination. (I shared a video below for some investing tips, tricks  and strategies for new investors in the Philippine stock market.)

What is your target destination?

Your target destination can be one of these two: (1) Target Date         (2) Target Price.

To give you an example, let’s say your Target Date of realizing your stock market gains is on your retirement time – which, for example, may come at least twenty years from now.

In that case, choosing giant companies which you think will outlive all of us can be your candidate stocks to buy using the strategy of Peso Cost Averaging (Check here how this strategy works). The goal here is not really to do timing of the market but using your long time-projection to accumulate as many shared of great companies as possible.

So by just knowing your Target Date, you can start streamlining your stocks selection and strategy.

Having different Target Date as destination obviously requires different stocks and strategy. As shared in my last blog, the growth of your investments is a factor of Time, Talent & Treasure you allow your investments to have.

  • TIME refers to how long you’re willing to park your money in the stock market.
  • TALENT refers to your skill in choosing your strategy and stock selection. This  can be monitored as percentage growth your investment money achieved.
  • TREASURE refers to the amount you’re investing. Since growth of stocks is reported on a percentage basis, a bigger base or capital will obviously translate to bigger actual net profit.

In the table below, the same ending target (ending value of 7245) was obtained with different variations in these three factors.

Time Talent & Treasure in Investing in Philippine stock market

With the target date in mind, you can plan how to achieve your goals by looking for the proper combination of your 3T’s – Time, Talent & Treasure.

Now we go to the second type of your target destination – Target Stock Prices.

If you’re investing believing that it’s actually a business, you’d want to invest in a company you believe is going to rise in value fueled by its continuous growth and earnings. This price which you believe a company will achieve some time in the future is called its Fair Value (FV).

More specifically, Fair Value is a company’s estimated worth or fair market value as computed by various ways specific to its industry (i.e DCF, NAV, P/BV, P/E).

This FV kind of target price is different from short-term target prices set by traders who buy stocks to simply ride short-term price fluctuations.

Now, calculating Fair Value is already one complicated animal especially for beginners.

Fortunately, some online brokers provide their own analysis and figures for Target Prices. In addition, some online brokers like COL Financial even give sample portfolio you may want to imitate.

At this point, let’s tackle how online stockbroker COL Financial can help in determining the Fair Value of candidate stocks to buy (If you don’t have an account yet, you can follow this tutorial to open >> How to Open an Account in COL Financial for newbies and OFWs).

This is as simple as logging-in in the website and going to its Investment Guide by following the menu: Research >> Fundamentals >> Investment Guide.

Investment Guide of COL Financial

Here you’ll automatically see the Fair Values calculated by COL Financial’s analysts which you can use as your target price.

Fair Values of Companies by COL Financial

There’s also another helpful data included in the table above called Buy-Below Price (BBP) which you can also follow to give you decent returns when you decide to sell with the FV prices.

The concept of Buy Below Price is very simple –  you only buy when the stock’s current price is below this BBP.

As you will notice, these Buy Below Prices are actually near 85% of the FV, which means that by observing the BBP in your transactions (meaning, you buy only when the stock’s current price is below this BBP) you’re effectively strategizing to have at least 15% expected growth should you decide to sell later on at those FVs.

Fair Values of Companies by COL Financial 2

It’s important to note that computed Fair Values may vary from broker to broker because of the differences in the way they calculate it and the assumptions they make in doing so. Understanding how the FV’s you see were computed is thus important before relying on it. Don’t just follow blindly. Compare using several researches if you can.

The discussion above gives you Target Price you can use. But more than that, COL Financial also has model portfolio you can use in screening your stock selection.

COL Financial Model Portfolio

The model portfolio consists of stocks that COL Financial recommends in its monthly strategy report, COLing the Shots. It consists of the stocks they believe to have favourable fundamentals, and are expected to be the major beneficiaries of the prevailing macroeconomic trends.

In short, it’s a “model” portfolio that COL Financial maintains. COL Financial adds/removes stocks to/from the list depending on their performance and market changes. It’s a porftolio you could literally monitor or copy. You can check this post for updates on COL Model Portfolio.

You can access this info still from the investment guide and choosing the Model Portfolio Set-up.

COL Financial Model Portfolio

Here you can see the selected stocks in its Model Portfolio together with their Fair Values and suggested BBP.

COL Financial Model Portfolio 2

So, if you’re looking for some free guidance what stocks to buy and when, this is a good start. Again, make sure you understand how the figures were calculated before using it in your strategy.

UPDATE: This Model Portfolio is no longer accessible in COL Financial’s website. However, you can see still use as a guide their list of stock picks  in their COLing the Shots reports. An example is shown below. Or you can use SAM by Truly Rich Club which can give you the exact stocks to buy and sell.

COL Financial COLing the shots stock picks

The COLing the Shots reports are available inside the COL website under Research section.

It is “a monthly publication by COL which provides insights on investment
opportunities based on global and local developments that could affect the market. COLing the Shots aims to provide timely and relevant information and analysis as well as a model portfolio for successful investing.”

COLing the shots

 

Paid Resources

Of course there are online resources you can avail to help you in this task.

Pinoy Investor for example gives you an already consolidated data coming from comprehensive researches of eight online brokers.

By having access to several FV’s computed by several online brokers, you can easily make comparison of their estimates and formulate consensus data. You’re also able to validate in case one broker may have bias to one stock.  Lastly, you can also see how many brokers give buy/sell/hold recommendation to a certain stock.

Piny-Investor-Nesletter Updates and Review

Once you’re decided with the Target Price you’re going to use, you can then slice at least 15% from it and just use it as your BBP.

You can check in this post a short review how Pinoy Investor can be a big help both for long-term and short-term investors. In fact, in its latest performance update, it tells of its 10 out of 13 stocks with BUY recommendation from one broker that outperformed PSEi. You can read more about it here.

Truly Rich Club’s Stocks Update is another one that can deliver all these information straight to your email on a regular basis. But as you’ll read in this Truly Rich Club Review, the club is much more than stocks update.

For example, one benefits of the membership called Stocks Alert recently sent just advised the selling of TEL shares after achieving more than 20% growth. This does not include yet the generous dividends TEL has paid out to its owners. You can check the table below and read this post to see how Truly Rich Club of investing works >> Strategic Investing with Truly Rich Club.Truly Rich Club Review Performance 2


As a last note, it is also advisable to just check your investments once in a while to see how it performs. Maybe once a month will do if you’re not the trader type.

Also, before investing you should see your overall finances in a bigger picture and understand that you have to start with protecting yourself and dependents before plunging directly to investing.

I suggest you start studying BTID (Buy term, invest difference) if you have the time to actively manage your investments. Get a term insurance before starting investing.

Hope this helps in drafting your own investment plan.

If you have other questions, let me know in the comments below.

Have fun investing,

oMeng 😉

How to grow your money faster the easy way

Last updated on May 7th, 2020

Two weeks ago, a friend came up to me after reading an ebook I wrote back in 2011 – Investing in Philippine Stock Market – A Quick Start Guide for Beginners, which is designed for newbie investors even with zero knowledge.

Investing in philippine stock market - A Quick Start Guide

She also knew about finance & business learning venue Truly Rich Club of Bo Sanchez being an attendee of The Feast and has actually already had investments in the form of mutual funds.

However, not satisfied with the growth of her mutual funds, she’s now considering going one level higher – investing in the Philippine stock market directly.

But as with the case of many, she doesn’t know what to expect investing in stocks. When she told me she just wants to try it out, I asked her how long she considers doing it.

“Six months”, she answered, adding that if it would performs well, then she’d consider moving the rest of her investments into the stock market.

Geez.

As much as I wanted to encourage her to consider stocks investing directly, I told her the truth that having such a short-term projection may not be a good plan. I shared that there’s a possibility that the Philippine stock market can perform really bad in the next six months, but if she keeps investing even during those bad times to sound giant & consistently earning companies and have a longer projection, those really bad times can turn out to be great opportunities. The difference basically lies in the time horizon of the investor & more importantly on the quality of the companies she would invest in.

I used to believe that the stock market is a good place to park your money if you’ll never need it within the next 10 years. In fact, in comparison, one chief operating officer of a mutual fund investment company in our country tells its prospective clients to consider at least a five-year holding period for their mutual fund investments to grow. Obviously, this idea is not compatible with what my friend wants to do.

Now there’s a much better way.

Truly Rich Club style of investing has a way of doing it relatively quicker with its Strategic Averaging Method (SAM), still with not so much effort for people who really don’t have the time to do all the analysis and just wan to focus on their day job or business. (You can read this blog for a description of this method.)

For example, in below latest update from the club, it tells of its profitable recommendation to buy one stock – DNL – for fifteen months after which was already advised for selling last May 9 after reaching near its target price. (You can check at the end of this post how it performed within this entire period.)

Result? 30-40% growth for those who followed.

This is notably a much better growth within a much shorter period compared to average returns and holding period of mutual funds.

Now you see one of the reasons why the Club shifted to this more active SAM strategy from its previous very passive way of investing – to get the benefit of choosing faster giant companies to make your money grow faster than if you were doing totally passive investing (which takes years).

The shorter period – with selling after few months once target prices are reached – also allows the investors to secure and lock-in profits. This really multiplies the earnings nicely. What it only requires is the discipline from the investor to invest regularly following the SAM house rules.

So going back to the story, I shared this same note to my friend to give an option in her stage of “trying it out” (of course with the risks involved). I also said that I’m going to share with her the stock picks I receive from the club (through its stocks update) just in her experimental period. After all, the mentors and brains behind the club see incredible growth this coming 2015, so I think she could possibly ride on it.

In our Facebook investing group forum – Investing in the Philippine Stock Market – Tips & Tricks, one will not take a long time to notice the main problem of many after already deciding to invest and opening a stock brokerage account: knowing exactly what to buy, when to buy, and when to sell. And all these “initial challenges” I believe can be solved by the stocks update of the club minus all the efforts of doing Philippine stock market analysis with one’s premature skills. With this resouces, people can just look at the buy below price and target prices to help them in their monthly buying activity (and selling when it comes). You can check this blog talking more about stocks update and stocks alert.

Read below update from Bo Sanchez:

Congratulations, TrulyRichClub Members—You’ll Get 30%+ Profit In One Stock!

My members are happy.

Last February 2013, I recommended to our TrulyRichClub members to buy the stock of a relatively unknown but great company that produces food ingredients.

My simple advice was, “Buy small amounts each month.” Since a lot of people didn’t know the company, they asked, “Jeepers Bo, I’ve never heard of them before. Why will I invest there?” I explained, “Yes, you don’t know this company, per se, but you know the clients of this company. They’re the country’s biggest food ingredients provider, serving companies like Universal Robina and Jollibee.”

When we recommended this very profitable company last February 2013, its stock price was P6.45. After 15 months, it’s now P9.25. That’s a whopping 43% growth. (Note: To compare, your money in the bank grows at less than 1% a year.) Some analysts believe that this amazing company will still go up, because it’s got a fantastic future; BUT because we’re very conservative, last week, I already asked TrulyRichClub members to get ready to SELL very soon if it reaches (or almost reaches) our Target Price.

And I asked them to transfer their money to our other recommended companies that we believe still have lower prices, especially one specific company that’s into power-generation.

Oh yes, in the past 15 months of buying this great company, there were “terrible” months when the stock went down, and some asked me, “Bo, I’m freaking out. Gosh, I’m actually losing money!” I smiled and said, “You may be losing on paper, but if you don’t sell, you’re not losing. Just close your eyes and keep buying small amounts each month!”

Today, my TrulyRichClub Members are a happy bunch. Because now, they see their nice profits and understand how this entire thing works. They realize that investing in the Stock Market isn’t a quick-rich scheme.

They realize that there will be terrible months when the Stock Market is really down and they’ll be terrified—but they also now know that it’s during those terrible months when they earn the most terrific profits IF they buy during those terrible months. And all they have to do is “close their eyes and keep buying small amounts each month”—and they’ll come out as big winners in the end.

My message? You have to invest every month for YEARS, and in due time, you’ll earn your MILLIONS.

Here’s why: Moving forward to 2015, I see incredible double-digit growth for MOST of our recommended companies. Oh yes, there will be the usual “terrible” dips along the way, where you’ll be scared and want to strangle my neck for getting you into this, but in due time, you’ll realize that these dips are when you make the biggest profits if you buy during that time.

May your dreams come true,

Bo Sanchez

 

***

There you have it. Exciting times are coming.

Hope this helps in your “aral muna bago invest” stage.

To end this, I always say that knowing what stock to buy is just a TINY component of investing and more so in designing one’s financial life that’s why I constantly urge people who ask me to really sit down and see the bigger picture of personal finance planning.

Did you know that going into investments is actually one of the last steps in drafting a comprehensive personal financial plan? At delikado pag puro investments lang??? Now you know!

I’ll explain more in future posts.

Have fun investing (for faster growth),

– oMeng Tawid 🙂

 

PS: See how DNL performed in the last 15 months below. Enjoy easy investing! Click here to learn more about how to invest as easy as this one.

Bo Sanchez Truly Rich Club Winning DNL Recommendation 3

PS2: Check more tools, resources and tools for you here.

Last updated on January 14th, 2019

Hi there!

My name is Romer Tawid, but I’m better known with my nickname Omeng Tawid.

I made this blog to share my experiences, insights and lessons about investing and personal finance as a whole . Through time, I had organized seminars with big names in the financial industry teaching people how to improve their financial and later on tapped as speakers too in various small meetings, schools, and companies. (If you want to invite me as your potential speaker for your financial events in your company or group, you can email me here.)

Below is a short feature story about me published in one of the Wealth Strategy edition of Truly Rich Club and some snapshots of the seminar I either organized or a speaker of.

Hope you get something useful  from it!

Happy investing!

oMeng 😉
PS: If you’ve got any question, you can send it to me HERE.

Bo Sanchez Truly Rich Club Review (1)

Bo Sanchez Truly Rich Club Wealth Strategy

 

The Winning Strategy 2015

The Winning Strategy 2015

 

Smart Pinoy Investor Seminar - Iloilo

Smart Pinoy Investor Seminar – Iloilo 2014

 

Mid Year Philippine Stock Market 2013

Mid-year Philippine Stock Market Seminar 2013

Simplify all the analysis – Easy Investing with Strategic Averaging Method (SAM)

Last updated on December 31st, 2017

There are basically two ways how to invest in the Philippine stock market.

You can either be an investor or a trader.

Some call it passive investing versus active trading.

In a nutshell, passive investing in stocks is a long-term approach ranging from few to several years timeframe whereas active stock trading is a short-term strategy with days or few weeks duration.

Active trading means buying and selling every few days or sometimes even within a day. Passive investing just keeps on buying carefully chosen stocks on a regular basis and seldom sells, allowing more time for the investment to grow.

But before going straight to Strategic Averaging Method (SAM), let’s recall first the four rules of making millions in the stock market by being a long-term investor as summarized in Bo Sanchez’s book My Maid Invests in the Stock Market… and why You Should, Too!

Rule #1: Invest Small Amounts Every Month for 20 Years or More

Rule #2: Invest Even When There’s a Crisis

Rule #3: Invest Only in Giants

Rule #4: Invest in Many Giants

 

Needless to say, these are relatively sound stocks investing strategy, but also a pretty boring one. HAHA

If you stick to this strategy, you definitely need three things: money to regularly invest, discipline to stick to the strategy and patience to let your investments grow over time.

Good thing Bo Sanchez’ Truly Rich Club has its third alternative – and it’s called SAM, short for Strategic Averaging Method. This has some minor but profitable differences compared to the common Peso Cost Averaging method outlined above.

The whole story is contained in his book The Turtle Always Wins so you can grab your copy in bookstores to get the complete picture of it. But even before that, Truly Rich Club has already introduced SAM to all its members in its June 2011 stocks updates.

 

Read below Truly Rich Club’s discussion of what SAM is all about and the reason why the club has shifted to this kind of strategy of investing in Philippine stocks market.


Meet Your New Friend, Sam.

By SAM, I don’t mean Uncle Sam.

By SAM, I mean Strategic Averaging Method.

There Were Only Two Ways of Getting into the Stock Market, Until…

In my mind, there were only two ways to invest in the stock market: (1) passive investing and (2) active trading.

With SAM, I’m introducing a third way. (I didn’t invent SAM. My mentor did. He’s a billionaire who has done all three methods with incredible success. The stock market has been his playground for the past 38 years.)

Before SAM, I taught people to be passive investors, not active traders.

Reason? Eighty five percent of people lose money in the stock market. That’s a fact. And most of those are active traders. Active traders buy and sell stocks every day. I have friends who are successful active traders, and believe me, they’re very rare. They trade fulltime, they study every day, and they follow very strict rules. Without these rules, active trading is gambling, period.

Passive investing is long-term. Active trading is short-term.

Passive investing only looks at the quality of the companies. Active trading only looks at their share price. Passive investing comes by many names. Many people call it “money cost averaging”, or “peso cost averaging”, or “dollar cost averaging”. Citiseconline, our preferred online broker, calls it the Easy InvestmentProgram (EIP).

So what is SAM?

SAM is in between passive investing and active trading.

SAM is semi-passive investing.

SAM uses the 4 Rules of Passive Investing, tweaks them, and adds a 5th rule.

To refresh your memory, here are the 4 Rules of Passive Investing:

Rule 1: Invest monthly for 20 years or more.

Buying stocks each month using your small monthly savings. It’s really making the stock market your piggy bank. You do this long-term—for 20 years or more!

But in SAM, we tweak this rule. If you use SAM, there’ll be times when you don’t invest, and choose to stay away from the market. These are times when we believe the market is overbought and is going down. We’d rather wait for the market to go down and buy when the prices are cheaper.

Rule 2: Invest even when there’s a crisis.

Passive investing means disregarding if the prices are up or down, if there’s a tsunami, earthquake, coup d’etat, or recession. You just keep buying month after month after month. In SAM, we tweak this rule too. If possible, we try not to buy on the way down, we try to buy when it’s already down.

Rule 3: Invest only in Giants.

Passive investing means buying only established, enduring, blue chip companies that we believe will be there for the next 50 years. We don’t dabble in penny stocks. Because we believe in people who buy penny stocks will become penniless.

In SAM, we tweak this rule too. Generally, we don’t buy penny stocks. At rare times though, we find gems among them. And we make an “intelligent speculation”. Because of its volatility, we only put “extra funds” in these gems.

Rule 4: Invest in many Giants.

Passive investing means not buying one Giant but a handful of Giants. Why? There’s such a thing as “Black Swan” in the stock market—when an unexpected event happens. We don’t want all our money to be in one company—and tragedy hits that company.

If you’re doing passive investing, we recommend 10 Giant companies or more.

If you’re doing SAM, we recommend five to six companies only, because we’re able to move from one company to another.

I repeat: SAM uses all 4 rules, although tweaked a bit. But it adds Rule 5.

And Rule 5 is the magic sauce that makes SAM more profitable than passive investing.

The 5th Rule of SAM

What is the Rule 5?

Rule 5: We buy when the price is beneath our “Buy Below Price” and we sell when the price is near our “Target Price”.

In my Stocks Update Report, I’ll provide both the Target Price and the Buy Below Price for you.

Remember, SAM is in between passive investing and active trading. In one sense, it is semi-passive investing.

Passive investing never use timing. Active trading is all about timing. SAM uses a little bit of timing.

Passive investing looks only at how good the companies are. Active trading looks only at the share price.

SAM looks at both: companies and share price.

Passive investing never sells. Active trading always sells every day or every week. SAM sells after a few months. We’ll give you the “Buy Below Price” and the “Target Price” of each of our recommended Stocks.

Here are 4 Big Advantages of SAM

1. Faster Giants

As I write this, Citiseconline is recommending 16 stocks for its Easy Investment Program (EIP). They’re fantastic, enduring companies that will most likely be there 50 years from now. But from experience, having so many stocks to choose from can cause confusion. And confusion causes inaction.

For SAM, we’ll narrow down the list to five to six stocks only.

Lesser choices mean lesser stress for you!

Why narrow down the list to five to six stocks?

Because not all Giants are created equal.

Some Giants are so gigantic, their growth may be slower.

Some Giants are in a mature industry, so the growth will be minimal at best.

So we’ll choose the Giants that we believe will rise faster.

Obviously, we don’t have a crystal ball with 100 percent accuracy. So we could be wrong in one or two of our selections. But we’re hoping that our right picks will be enough to make your money grow faster than if you were doing totally passive investing.

2. Lower Prices

Just like in passive investing, you’re to buy a particular stock each month. But in SAM, you only buy when its price is beneath our “Buy Below Price.”

Here’s a secret in making more money in stocks: You make your money when you buy, not just when you sell. What do I mean? If you buy it at a cheaper price, your earnings increase many times more.

How does SAM do this? I’ll give you a “Buy Below Price” for each of our recommended stocks. This will prevent you from chasing a rising stock all the way to the top.

3. Secured Profits

In passive investing, you never sell.

In SAM, we’ll tell you to sell after a few months—when our recommended stock hits our Target Price. By selling, you lock-in your profits. You take your profits off the table. You take your money from a company that’s already gone up and put it in another company that still has room to go up. This multiplies your earnings nicely.

4. Nice Jackpots

And then there are jackpots. Lepanto (LC) was our jackpot stock this year. My mentor mentioned it to me last December 2010—and I wrote about it right away. If you bought when I recommended it last December, you would have earned 157 percent by now.

I warned people that it’s a volatile stock. It may go up or down. So this isn’t our bread and butter in SAM. But I told you that if you had extra money (that you’re willing to lose if things go wrong), you can buy Lepanto (LC).

My mentor calls these calls “intelligent speculations”. I repeat: As a rule, we don’t speculate with penny stocks. But every once in a while, he finds a gem among the penny stocks. It’s very rare. But when he finds one, he’ll tell me—and I’ll tell you. The risks are higher, that’s why I ask you to put your “extra money” only.


So there, that is SAM when it comes to investing in Philippine stocks. You can also scan through the click-by-click tutorial below to see an actual example how it worked recently (2014) for one sample stock. For your quick reference, you can get get a sample copy of this SAM discussion here.

 

Have fun investing!

– Omeng Tawid

PS:Get constant updates. Like our facebook page and follow us in twitter. Check more resources here.

PS2: Below table shows the top 10 winners stock picks of Truly Rich Club. More than showing off the past success and victories of the system, it’s an inspiration to encourage new and existing members to stick with the system and be faithful to their monthly investments with the present stock recommendations. It’s a way of reminding everyone that their patience and discipline will one day pay off. To try it out, you can get more details here.

TRULY RICH CLUB TOP 10 STOCK WINNERS –

DEC 2011 STOCKS UPDATE REPORT

STOCKS
STOCK
SYMBOL
TIME RECOMMENDED
TIME
HELD
PRICE RANGE
YOUR
RETURN
Lepanto
LC
Dec 2010 to
 May 2011
5 Months
P0.34 to P0.85
150%
Jollibee
JFC
Mar 2010 to
May 2011
14 Months
P47.50 to
P94.45
98%
Security Bank
SECB
Mar 2010 to
May 2011
14 Months
P53.00 to
P96.20
81%
DMCI
DMC
Sep 2010 to
May 2011
8 Months
P27.25 to
P44.80
64%
Int’l Container
ICT
Sep 2010 to
May 2011
8 Months
P32.40 to
P48.70
50%
First Gen Co.
FGEN
Mar 2010 to
May 2011
14 Months
P9.80 to P14.78
50%
Megaworld
MEG
Jul 2010 to
May 2011
10 Months
P1.54 to P2.30
49%
Nickel Asia
NKL
Oct 2010 to
May 2011
8 Months
P15.00 to
P22.40
49%
Ayala Land
ALI
Mar 2010 to
May 2011
14 Months
P11.25 to
P16.64
47%
Energy Dev’t Co.
EDC
Mar 2010 to
May 2011
14 Months
P4.85 to P6.49
33%

Bo Sanchez’ Truly Rich Club Stocks Update

Last updated on May 29th, 2020

Truly Rich Club Stocks Update is one of the benefits Truly Rich Club gives to all its members when it comes to picking stocks and knowing when to buy and sell in Philippine stock market.

You can check below the latest update of Bo Sanchez’ Truly Rich Club regarding investments in the Philippine Stock Market ( Note that this stocks update is as of August 2014, and so the below stocks update and stock picks summary by Bo Sanchez team may no longer be applicable as you read it now. You can follow this tutorial >> how to join Bo Sanchez Truly Rich Club in case you want to become its member and get access to all its timely Stocks Update, stocks picks, alert and other lessons).

Bo sanchez truly rich club stocks update

Bo Sanchez truly Rich Club stocks update. Click here to join and get the latest update.

As you probably know, the club gives regular stock update to help its members in taking charge of their investments in the Philippine Stock Market. But there’s a LOT more components in the entire Truly Rich Club membership than just the easy-to-follow Stocks Updateincluding the Wealth Strategies, ebooks, powerful talks, Stocks Videos, quick-start seminars, mastermind meetings,  and a whole lot more of learning  materials!

In this post I summarized a comprehensive review of what Truly Rich Club can offer and how it keeps on improving.


Many associate Truly Rich Club with stock market.

That’s understandable given the fact that its founder Bo Sanchez has published two of his finance books that are both related to stocks investing particularly in Philippine Stock Market.

The first one which shocked the world is entitled My MaidInvests in the Stock Market… and Why You should Too! This book contains the exciting story of her two maids who aim to make their millions by investing in Philippine Stock market with his own guidance.  In effect they’re getting their club membership for free.

TRIVIA – As of December 14 2017 latest update, the first maid who started her investment program under Bo’s  guidance now had P1,471,874 in her Stock Market account. And she’s only 30+ years old. His other maid has P1,053,521 in her account! Great job! Check the story details here.

The second one, entitled The Turtle Always Wins, on the other hand relates the story of four kinds of participants in the stock market. It also introduced to the public the current strategy of the club which is (SAM) Strategic Averaging Method, one that refined the original strategy of the club during its first days. You can check this post discussing how SAM works >> Easy Investing with SAM (Strategic Averaging Method).

But if you examine more closely the structure of the club, there are more resources available to its members growing their money in the stock market.

Stocks Update vs Stocks Alert

Stocks Update is a formal report sent to members that update the current stock recommendations of the club. Stocks Update is sent every two weeks.

Initially, Stocks Update is merely a short report (at most 2-3 pages) that includes the specific stocks to buy, a buy-below price and a target price with few words from Bo Sanchez summarizing the changes in their recommendation (if there’s any).

However, since we’re in the stock market world, the club devised a more strategic method and called it Strategic Averaging Method. It also made the stocks update more comprehensive by having another section that gives closer examination of the current stock picks of the club. This is where Mike Viñas enters the picture.

The new stocks update also gives summary tables  that show the main point of the stocks update where members can base their next buy or sell. Below is a sample of this summary table (as of June 20 2012).

By doing this, they effectively  serve two kinds of audiences – those who don’t want to study companies can just read the words of Bo and go directly to this table, while those who want to be more knowledgeable of the reason behind the recommendations can also read the section on the closer look of chosen stocks written by Mike Viñas.

You can get here a summary description of SAM but it is almost the same with the original strategy except for very few things.

Both still rest on the power of having your monthly investments and putting on your money at fixed interval of time. But with SAM, the list of stocks to buy is more explicit. You’re given five to eight stocks you can choose from in buying your stocks. This is fewer than the original strategy that contained three subs-plans having its own list each.

Moreover, since this is more explicit and more refined, the stocks update became more useful and easy to follow for the members. It also led to more profits in a much shorter timeframe since there’s now a more concrete direction to sell from time to time.

Here is a sample of a stocks update when it introduced the SAM in the club  – click here.

Now what are stocks alert?

From the name itself, it is an alert for the members whenever the club has important market updates.  Remember that stocks update are sent only every two weeks.  But any stock market can have lots of surprises.  Hence, Stocks Alert  is the way of the club to give quick short important updates to the members between the Stocks Updates release. In effect, through the Stocks Alert, members are guided every day.

It has also a more direct instruction, telling you what exactly to do with what stock – whether to buy, hold, or sell. That’s why many find the Stocks Alert helpful since these short updates guide their hand when there seems a lot to be happening in the market.

Below are sample Stocks Alert.

Stocks Alert: Sell NIKL

Confused?  Yesterday, I said “Hold NIKL” (Nickel Asia).

Today, I’m asking you to sell it.

Let me explain.  The reason why NIKL shot up was because Indonesia issued an export ban for nickel.  So that leaves the Philippines as the biggest nearby source of nickel for China.  So initially, we suggested that you hold NIKL because we feel it’ll go higher soon.

But after much thought, we believe that there are better places to put our money—because of one reason: China’s growth may slow down—and its hunger for nickel may slow down too.  (Obviously, no one can be sure of these things.   We can only guess.)

We’re not saying Nickel Asia will go down.  (Gosh, we could be totally wrong and the price go even higher.)  Nickel Asia’s future is very bright. But because of other options available to us, we can sell NIKL now and transfer our money to other recommended companies (such as MEG).  Perhaps in the future, we’ll recommend that you buy NIKL again.

May your dreams come true,

Bo Sanchez

PS. We’ll explain more in next week’s Stocks Update.  Watch for it. [03/23/2012]

Stocks Alert: You Can Buy MEG

A few weeks ago, I asked you to sell ALI (Ayala Land), so our SAM List went down from 10 to 9.   But out of the 9 Stocks, 4 of them have already crossed our Buy-Below-Price—so you can only actually buy 5 Stocks.Thankfully, we have a new Stock to add to our list.

If you have extra money, you can buy MEG (Megaworld). AGI (Alliance Global), the mother company, is buying back MEG shares. That’s always a good sign.  That means the mother company thinks that MEGis cheap at this level. We’ll explain more about MEG in our regular Stocks Update next week.  Butin the meantime, you can already buy MEG. [03/21/2012]

Stock Alert: Nothing Is Wrong With SMPH

Don’t panic by the BIG negative you see in your SM Prime Holdings (SMPH) stocks.  (Mine says I’m negative 21%!)

You see, SMPH came out with a 25% Stock Dividend.  (That’s a good thing in the long term, believe me.)  Its price was already adjusted today, but your new shares will be credited on your portfolios by June. So everything will be alright by June.   Kick back, drink your fresh coco juice, and relax.

Mike Vinas will talk more about it this Friday’s issue of Stocks Update. [05/21/2012]

Stocks  Alert: Buy: Ayala Corp

We’re now including Ayala Corporation (AC) into our SAM Stocks.

Our Target Price is P520.  (As I write this email to you, it’s now P426.)

Board Lot is 10, so you’ll need a minimum of P4300 to buy.

Reminder: You’re a long-term TrulyRich investor.  If after you buy AC, its price goes down, be happy.  Dance the Gangnam Style.  Because you can buy again at cheaper price next month. [10/22/2012]

There you go!

I hope this clears some of your questions regarding the way Truly Rich Club helps its members who are investors in the stock market.

But as I told you, many are focused too much on these Stocks Alert and Updates that they forget that there’s actually more in it than stocks investing. You can watch this 11 minute video of Bo Sanchez to discuss more how the club can help you but essentially, the entire package consists of below.

  • Receive 2 PowerTalks every month (instant access via MP3)
  • Receive Bo’s Success Mentors Collection (1 every 3 months for 1 Year)–FREE
  • Receive 2 WealthStrategies newsletters every month–FREE
  • Receive Daily GodWhispers Email–FREE
  • Receive How To Be Truly Rich Seminar–FREE
  • Receive How To Conquer Your Goliath Ebook–FREE
  • Receive How To Turn Thoughts Into Things Ebook–FREE
  • Earn Passive Income by being Bo’s Affiliate in the TrulyRichClub
  • Earn Passive Income with Bo’s other Internet Work
  • Receive Bo’s Very Practical Ebook, My Maid Invests In The Stock Market…And Why You Should Too.–FREE
  • Receive Bo’s Stocks Update. –FREE

The fifth, sixth, seventh and tenth are one-time downloadables. The rest are continuous as long as you choose to continue to be a member.

Money-back Guarantee

You can also just try it out first to see if you’d find the materials a powerfully inspiring Wow experience and simply cancel within 30 days so you won’t be charged with its money-back guarantee. So just for trying, you can have and keep all the great stuff that come along with the first month.

To get to know more about it, click here.

Enjoy the day!

Have fun investing (with a guide!)

Omeng  \(“,)/

Top 10 Past Winners of TrulyRichClub’s Stocks

If you followed TRC’s Stock Recommendations in the past, you’d have enjoyed these earnings. This is an encouragement for you to be faithful to your monthly investments today.
Never give up. And you’ll have great winners 10 to 20 years from now!

(Disclaimer: Past performance doesn’t guarantee that you’ll have the exact same results in the future. After all, your earnings all depend on the market’s performance.)

The Easy Way of Investing in Philippine Stock Market – Peso Cost Averaging for Beginners

Last updated on May 31st, 2020

Many say that the stock market is dangerous.

And you know what, I agree.

After all, statistics says that an average of more than 80% of all the stock market players lose money.

Geesh..

Imagine a friend coming up to you and says “I have a business now where your chance of earning is only 20% or less. Do you want to invest?”.

Mark Twain once said, “October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.”

That’s essentially the whole year!

An office mate actually once shared to me his first impression on investing in stocks. He said he couldn’t see the returns being worthy of the time, energy and brain cells being poured into it.

And I believe there’s some truth into that. With the many things that need to be factored in when evaluating entry to and exit from the stock market, it can be really very hard to discern when to start and actually plunge into it.

But the last time I checked, ignorance remains to be not an excuse in trying out something. Most of the time, you only need to know the very basics of anything to make it sense for you.

(If you want a quick guide for beginners how to start investing in the Philippine stock market, you can download your free ebook here.)

The Easier Option

History gives us an established way of an investing strategy in the stock market that requires minimal effort. Your fifteen minutes time every month to browse the internet would be enough for this method of investing. That translates to three hours every year – the same amount of time you spend in liking status in facebook a day! :p

It’s called Money Cost Averaging, or in the Philippine context, we say Peso-Cost Averaging.

Peso Cost Averaging (PCA) is a strategy where you buy stocks of greatest companies, regularly, little by little.

What you do here is basically to invest a fixed amount of money, one you won’t need at the short-term,  at regular intervals over a long period in a great company you believe will perform well in the long term.

This is a very passive approach.

Here you’re eyeing for the long run.

You’re betting in the future.

You don’t expect big earnings in the near term, but instead a decent profit in the long haul.
(You can watch the short video below discussing this approach to the stock market.)

If you’re the type of person dreaming for instant money back and returns, sorry, this is not the strategy for you. (You may want to do Market Timing instead).

But if you are the type of person who just wanted to make something more meaningful out of your money you won’t need anytime soon, to earn something greater than what Philippine banks normally offer, without breaking your day to day routine, this is the exact method for you.

All you need to do is buy regularly, say every month or two or three, of a company which you believe would continue to perform spectacularly in the next 10 to 20 years.

You do it little by little, maybe monthly, not putting all your money in one big shot (lump sum).

You simply invest a fixed amount on your established schedule, without worrying about the present market condition.

In other words, you don’t do timing here.

You don’t mind the slips and turns, because you know those are just tiny pixels of the bigger uptrend picture you expect in the future.

When will you sell?

Oh, you sell after ten or twenty years or more. Seriously.
In most cases, this will happen few years before your retirement years.

And that lies the biggest risk of doing this approach – you’re betting in the future.
And this future is obviously uncertain.

That’s why you need to select only those companies that you believe would still have consistent great earning even after decades time. Their solid history being industry leaders and consistent earnings growth will serve as the safety net surrounding your investments even without your active monitoring. In short, close scrutiny of company fundamentals is very essential here. The last thing you’d want is to have put all your savings in a company in a long time only to find it going in a sharp downtrend when it’s your time to sell.

Personally…

Right now, I have two sets of funds.

One is my investment/retirement fund, and the other my emergency fund.

An emergency fund is a  non-negotiable before you go to investing, and ideally should be worth three to six times of one’s monthly salary.

What’s the use of an emergency fund?

It’s part of the budget that’s strictly for emergencies or surprise expenses not normally part of your yearly budget,  and therefore is saved in short-term liquid instruments, making it readily available anytime. Normal ATM accounts can be a place for an emergency fund. If the time comes you need to fix something broken in your house, you simply go to a nearby ATM and withdraw a part of your emergency fund. Your life is still normal and you have no worries that your budget will won’t be enough for your monthly regular expenses.

This will serve as your buffer fund. This is important because you don’t want to see yourself dipping into your investments, or worse selling your stocks at a loss, just so you could cover your emergency needs.

Your Emergency fund also gives you that inner peace knowing that you’re more than ready financially anytime in case these unfortunate events happen unexpectedly.

(Think of what happened in COVID-19 crisis where most people were suddenly left unemployed without enough savings, forcing them to depend on assistance from other people and government. You can watch this video – Defeating your Financial COVID virus related to this.)

With this mentioned, it’s also prudent to complete again this emergency fund in case you have used it up for your needs.

But if you’re all set with your emergency fund, then you can now start considering starting your regular investments using the Peso Cost Averaging technique.

Important Note

Just always bear in mind that Peso Cost Averaging if applied strictly really takes a long time.

For beginners, it’s difficult to develop that patience of sticking to this strategy while seeing your investment going up and down, sometimes at a huge loss, and not minding the fluctuation. The emotions involved often go in the way and can break your investment horizon.  If that happens, you’re then stepping on the border of another strategy called marketing timing, which is a more active approach and therefore requires more resources such as time and skills.

Seeing your portfolio at a loss could even lead you to abandon your strategy altogether.
That’s why it’s very important you’re psychologically ready and have the solid financial foundation when doing this. This solid foundation includes proper financial planning & risk management on a personal level. (You can set an appointment with my trusted financial advisor if you need help on doing this. Click here.)

The Four Rules of Making Your Millions in the Stock Market

In Bo Sanchez’ book My Maid Invests in the Stock Market, Bo simplified investing, and shares four house rules of making millions in the stock market:
RULE 1: Invest Small Amounts Every Month for 20 Years or More

RULE 2: Invest Even When There’s a Crisis

RULE 3: Invest Only in Giants

RULE 4: Invest in Many Giants

(You can download a free copy of that book here).]

Obviously, the rules only make things straight using the Peso Cost Averaging technique.

COL Financial’s  Easy Investment Program (EIP)

Online brokerage firm COL Financial, formerly Citiseconline, the leading online stock brokerage firm in the Philippines, has launched its Easy Investment Program (EIP), making it easier for its passive customers to apply the method of Peso-cost-averaging.

Under this program, investors are to put consistently (though not mandatory) fixed amounts every month into solid giant companies with criteria summarized in the acronym GEMSS (Growing Industry / Earnings Visibility / Management Credibility / Superior Products or Services / and a Strong balance sheet). These criteria assure that clients only choose solid fantastic giants and dynamic corporations that compound their expansion over time. COL already provides customers with a list of stocks they can choose from based on the GEMSS criteria.

Since it started last Aug 2008, the EIP list has included only six companies namely ALI – Ayala Land Inc,; BPI – Bank of the Philippine Islands; JFC – Jollibee Foods Corp; MWC – Manila Water Corp; SMPH – SM Prime Holdings and TEL – PLDT.

Important!!! Be aware that their EIP list of stocks is updated from time to time due to market developments and changes in company fundamentals. Make sure to always check their updated list on their website by following the tutorial here.

As of this 2011, they expanded their recommendation list to sixteen (16). You can click here for the expanded recommend stock list for EIP or just click the image below.

Download an updated Recommended Stock List for EIP as of Oct 1 2014 HERE.
Again, check their updated list on their website by following the tutorial here.

 

COL Financial EIP List of recommended companies

How to invest in Philippine stock market for beginners

 

Keep the habit

So you now see the importance of your regular saving habit as your first step in investing.

A portion of your savings, that you can afford not to use within the next 10-20 years, can leverage on PCA, letting it grow steadily through the years you’re focusing on your primary income stream.

Invest that small amount regularly every month, and then go back to your normal life.

No need to actively daily watch the market, or hear news about our economy, or be aware of the Wall Street happenings, or bothering with gossips about our president’s love life.

Just monitor it from time to time, maybe once a month.

Enjoy time with your loved ones instead. Focus on your job or business to increase your cash flow.

Then after ten to twenty years, go back to me.

Subtract from your millions by treating me and my children a Jollibee hamburger!

Take charge of your financial future. Retire a multimillionaire.

Have fun investing!
Omeng 🙂

NOTE: Truly Rich Club, a great learning club started by Bo Sanchez, now employs Strategic Averaging Method or SAM in investing in Philippine stock market.

This works very similar to Peso cost averaging but with some modifications for faster growth and locking-in profits. This in turn multiplies the earnings nicely.  You can learn more about it on this page. It’s also my personal strategy of choice.

No fear for newbies with peso cost averaging

 

PS: You can also check out Truly Rich Club and see if it will fit your investing needs.
This club gives exact spoon-feed directions specifically when and what stocks to buy and sell.
I’ve been a member of it for years and it has really helped me improve my financial life!

It’s actually way more than stock market investing, and the stocks update they send me is a tiny portion of what the club offers to its members.

Click here to find more details about it.

Investing in Philippines Stock Market Tips & Tricks – Watch Guide

Last updated on May 6th, 2020

Watch the video below for investing tips, tricks & stock picks you can start with.

How to Use

Buy the stocks only when the price is below the “Buy Below Price”.

By following this model portfolio, you’re effectively using the basic strategy – “Buy Low, Sell High” .

The basics of Value Investing is buying great companies at a discounted price. By observing the “Buy Below Price”, you’re able to buy ONLY when potential upside is at least 15%.

***
TERMINOLOGY

LAST PRICE
Last traded market price for the company or index.

BUY BELOW PRICE
A level at which capital appreciation potential is already attractive relative to the fair value estimate. Any price below the Buy Below price is considered an attractive level to buy the stock.

FAIR VALUE (FV)
Fair Value is a company’s estimated worth or fair market value as computed by various ways specific to its industry (i.e DCF, NAV, P/BV, P/E) provided by COL.


COL Financial EIP List

A selection of Premium Growth Stocks carefully selected by the COL Research Team that represents listed companies that will continue drive shareholder value in the long-term. EIP is designed for long term investing using Peso Cost Averaging. Check this post for a comprehensive discussion of this passive strategy >> Easy Investing with EIP


 

Other financial indicators you can use
P/E RATIO
The PE ratio is the most commonly used valuations measure. It shows how much is paid for each unit of earnings. The PE of a stock describes the price of a share relative to the earnings of the underlying asset. The lower the PE, the less you have to pay for the stock, relative to what it earns. PE is also considered a relative valuation measure.

RSI
A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset

An asset is deemed to be overbought once the RSI approaches the 70 level, meaning that it may be getting overvalued and is a good candidate for a pullback. Likewise, if the RSI approaches 30, it is an indication that the asset may be getting oversold and therefore likely to become undervalued.

UPSIDE
The difference between Last price and Fair Value in percentage (%). Most investors prefer to buy stocks with at least 10% Upside and ideally 15% and up.


 

Investment Guide’s Rating Definition


BUY – Stocks that have attractive fundamentals and valuations, based on COL’s analysis. COL expects the share price to outperform the market in the next six to twelve months.

HOLD – Stocks will either (1) attractive fundamentals but expensive valuations, (2) attractive valuations but near term earnings outlook might be poor or vulnerable to numerous risks. Given the said factors, the share price of the stock may perform merely inline or underperform the market in the next six to twelve months.

SELL – Both valuations and fundamentals of stocks are not favorable. COL expect the share price to underperform in the next six to twelve months.


Technical Guide’s Rating Definition

[ezcol_1half]BUY – an up trend showing an ongoing upward drive
HOLD – stay with what you have or, if without a position, wait for a BUY

TAKE PROFITS – suggests a reduction in position as a loss in upward momentum may trigger a consolidating reaction or pullback to support
RANGE TRADE – proposes a trading buy from rebounds off supportive areas

LIGHTEN – reduce positions as range rallies seem to be tapering off

SELL – a down trend showing a continuing downward drive

SELL INTO STRENGTH – a down trend showing a technical rally that may offer better prices to sell to, especially if it nears next resistance[/ezcol_1half_end]


 

TOP PICKS

Stock(s) that have favourable fundamentals, and most likely to outperform its peers from their respective sector (Banks and Financials, Consumer, Property, etc) selected by COL. These stocks are the top bet for the “current” year.

 

HOW TO MAXIMIZE


1. Do NOT just buy stocks with the highest UPSIDE unless you are a hardcore Long Term investor, a “Contrarian” investor and has the patience of Warren Buffett and Philip A. Fisher who don’t sell for decades. Fisher’s longest was 49 years!

2. Buy when: it’s near the support as much as possible (check your broker for their Technical Analysis guide); RSI is oversold; MACD is bullish (or starting to be bullish); price closes above Moving Average; PSEi is on up trend.

 

Happy investing!

PS: For those who haven’t signed-up, receive free updates in your email by subscribing to our group’s news letter HERE.

FREE Workshop: Ultimate Guide to Freelancing

Are you looking for ways how to make money online?

I just found out about this and I NEED to tell you about it…

It’s about my friend John Pagulayan who helps Filipinos generate 6-7 figures of monthly income thru freelancing.

He’s been featured in GMA 7’s 24 ORAS where he was interviewed about how freelancers like him earn Php 100,000+ per month.

Now he has been conducting a 3-part FREE online workshop where he’s revealing all the steps on how anyone from literally no experience can have a sustainable and thriving freelance business.

The only problem is – the only workshop is only available to view until this weekend.

Sorry – I should have told you about this sooner.

So to quickly get you up to speed, here’s a quick recap:

First: Sign-up to the FREE online workshop using this link:

https://smartpinoyinvestor.com/tribe

Again this is FREE.

No need to pay anything, just give your name and email.

Once you sign-up you’ll see the entire 3-part workshop already.

In Part 1: You’ll learn about the Opportunity of Freelancing And How COVID Accidentally created 6-Figure Filipino Freelancers

In Part 2: You’ll learn the “Boring Secret” to a Sustainable, Predictable, Scaleable Freelancing Business. Plus a DEMO on how he and his students get premium clients that pay $1,000 to $20,000 per project!

Then in Part 3
You’ll see the ENTIRE 4-step “CCPP” process on how to close premium clients giving you all the scripts and templates.

This Entire FREE Workshop alone has so much value and it gives you everything you need to start a thriving freelancing business.

Just click here to get started.

If you have questions, just hit reply and give your comment.

Happy learning!

Why it is not safe to just “invest long-term”

Proud member of the long-term investors club?

If you notice the theme in many discussion threads in several investing forums about trading in the Philippine stock market, not a few are actually talking about support/resistance levels for proper entry/exit or waiting for down/ups so they can get the best possible timing to buy/sell.

In short, these people are doing some sort of market timing – or in simple terms, catching the “almost perfect” time to buy and sell stocks. And if you’ve been in the market, you’ll probably agree if I’d say that the great excitement in trading only ends when you see find yourself at the losing side of the trade. (If you want to understand the very basics of market timing, you can watch this video.)

That’s why many investors, especially newbies, later on, go to the other end of investing approach – that of going long-term. In fact, many are strong advocates of this type of strategy.

But is it effective?

What generally happens if you stick to your long-term horizon and you don’t sell your stocks during this entire period? Like you intend to keep it for, say, a minimum 5 years?

Do you believe that being focused on eyeing stocks that are “good for long term” generally safe?

(If you want a quick guide for beginners how to start investing in the Philippine stock market, you can download your free ebook here.)

The KEY to long-term investing

Well, the safest answer is: IT DEPENDS!

You see, we’re now talking about one of the most important aspects of any investment – RISK!

So some few words first about this “risk”.

First, we need to agree that there’s no investment that’s 100 % free from risks!

Even the money that you park in your bank which you believe is safe is actually exposed to the inflation risk!

If you simply save and don’t do anything about it, then you’re sure a loser every year because of the losing purchasing power of your money at hand.

Now going to the world of the stock market, as with any investment, there is also no such thing as safe in any market.

The truth is, whether you’re investing for the long-term or having that swift trader approach, you still should monitor your stock investments with the current price trends and events, the frequency of which depends on your own personality, style and goals.

However, and more importantly, you simply can’t overstay in the stock market or invest blindly and hope you are up after 5 years. Stocks that keep on going down even if you keep it for several years are not unusual!

A long period of investing doesn’t guarantee profit

In fact, even the companies you may consider good now didn’t have, at least on one point, good returns even for a 5-yr holding period.

Take a look at stock Megaorld Coporation (stock code: MEG) as an example. The chart is shown below from 2004-2012.

MEGAWORLD in investing in philippine stock market

Imagine yourself learning about the stock market as a newbie at this time,  buying this stock at the peak of 2007 when the price was more than Php 4/share. After it reached its peak, it started going down…and down… and down…bottoming in early-2009 and recovering after.

Guess what happened even after five loooong years?

The price was only around Php2+/share!

If you invested your life savings blindly that 2007,  or worse, your retirement fund, I don’t think you’d have a good night sleep. Until after around 7 years, it still did not reach the 2007 highs. (Now as of April 29 2015, its current price is only at 5.33).

Down by 75% after 10 Years

Let’s take a look at another more recent example: Cebu Air Inc (stock code: CEB.
Below is its 5-year chart up to May 29 2020 (with the COVD-19 crisis still ongoing).

If you look at its entire price history, you will be having this.
Excluding the dividends it gave, a buy & hold strategy for almost 10-year period gives a disappointing -75% loss.

So what’s the key to the so-called investing for long-term?

If you want to go long term like more than 5 years, then it’s very important to choose companies with good long term fundamentals and those that can in simple terms, earn consistently and outlast even your lifetime. (I can honestly think of AC and SM)

The main potential problem with this approach is that fundamentals change over time.  In other words, great companies we have today may not remain great after a year or two. Reasons could vary – a shift in the political landscape, changing government regulations, new technology, or general market sentiment swings.

Also, don’t forget to look at company’s growth potential as well to optimize your investment.
Looking at growth in sales and revenue year on year can be a good start. This is where good researches coming from your stockbroker may help.

Once this careful stock selection is done, the next you need to manage is your attitude and discipline towards those investing goals. Proper monitoring from time to time remains essential.

Be vigilant in sticking to your horizon if the reason of your buying it is still intact!
Otherwise, if the main basis of your buying seems to no longer hold, I don’t see any point why you would keep it any longer.

Different strokes for different folks

Lastly, different persons have different risk profiles and goals in investing.

Short, mid and long-term investing all have its own pros and cons, which anyone should be aware of.

Again, if you go long-term, then the key is in choosing the companies that will have consistent growth earnings. This doesn’t mean that stock monitoring is no longer necessary You still do – for the purpose of checking whether the basis of your “long-term investing” remains intact.

Online stockbroker COL Financial even shared some studies that if you do long-term using Peso Cost Averaging, then carefully chosen individual stocks could give you 10-20% annual returns in 20 years span.
(You can watch the video below where I shared basic strategies to investing in the Philippine stock market.)

Another safer approach is to invest in Philippine index funds. Here, you follow the index as a whole basket of 30 stocks, and not be heavily invested in only 2-3 stocks you hold. You risk is greatly reduced since it’s much rarer compared to a single stock that an index can remain low for an extended period of time.

If there are people playing with resistance and support, that’s because it’s their chosen style. They decided to be more active players, something you don’t really need to imitate if you’re not that type. (In case you wanna explore this possibility of earning more, you can check out my highly recommended Full Trading Course here, where you can equip yourself with comprehensive Technical Analysis.).

But then, market goes in cycles, which means theoretically if you want to maximize your returns, you should at least sell at the peaks of bull cycles and buy at the bottoms of bear cycles. The subject of technical analysis can help you recognize those market phases, something much easier said than done.

In the end, if you think of it, the price action of the stock is the one thing that will really matter for us retail investors. Whether a long- or short-termer, you’ll earn capital gains ONLY when you sell at a higher price than you bought it. If you’re able to time the bottom of the market, that I believe is the best scenario you can ever have in multiplying your money through stocks. Buying close to it is next and more doable.

Enough said.

So… are you also going for the long-term? Why or why not?

Share your comments and experience below.

Have fun investing,

oMeng 🙂

When to buy & sell stocks (and more lessons!)

Recently I had more time creating video lessons that covers all the basics of investing perfect for beginners. Other lessons like that of market timing, which answers when to buy and sell stocks, is also included.

I know that for many, investing may be out of their mind now given the challenges we all face at the present.

But for others who have extra cash, the stock market also presents opportunities to earn in the long term.

The lessons covered are
1. The First Step to Investing – How to Open your Trading Account Online
2. The Basics of Online Investing – Getting Familiar with your trading account.
3. Tips & Tricks  -where I uncovered tips where to get ideas for a more effective investing
4. Investing Strategies – How You can Maximize your peso and do proper portfolio management (and avoid huge losses); and lastly
5. Market Timing – If in the future you want to be more active in trading.

There’s also another bonus video at the end which gives you an additional overall idea how to do proper investing. (Yes’ there’s a right and wrong way to do investing!)

You can access the training series here (free!)

Now if you want to have more personal guidance when it comes to financial planning & proper investing, you can choose to sign-up here for an online appointment with my trusted financial advisor. With this quarantine, she has more time now to accommodate some from my readers.

Click here to sign-up.

I hope this helps you and if you have more questions about investing or anything I can help you with, just reply to this email and I’ll try to answer as quickly as I can.

Keep safe,
Omeng
www.SmartPinoyInvestor.com

Do you want additional income stream?

Last week, we had an informative online session tackling how you can defeat your financial virus.

I coined this financial virus as COVID too.

Cashflow-Overspending-Values-Inflation-Disaster

If you’re not able to join,  the replay is available here.

The first one, Cashflow, pertains to the streams of income you have in your life.

In summary, I shared the importance of having multiple income streams.

It’s VERY DANGEROUS  if you currently have only one.
(This you can clearly see in our current news of people depending on government assistance.)

So I also pointed out some areas where you can create an additional income stream. It could be a traditional business, online selling, making YouTube videos, or just leasing out your extra home space at Airbnb.

But one lucrative way I also discovered is to join the financial services industry.

Now this post is for those who’d like to pursue the field of being financial advisor.

If you are interested just to explore this, and create a difference in other people’s lives and be rewarded in return, you can sign-up here and join their orientation this week.

>Being a financial advisor has its own perks and challenges, and the nice thing is this can be a part-time income opportunity.

This means you can do this on your own time and adjust based on your current schedule.

I have seen a lot of my friends who initially entered this on a part-time basis while keeping their job and later on decided to do it full-time.

Some even seem already successful in their own job but made that decision which changed their life for the better.

What did they see in this opportunity?
That is for you to find-out.

Have fun learning,
Omeng

PS.
Even if you think it may not be for you, I”m very sure you’ll learn A LOT in their orientation, not just on financial rewards but on having a supportive mindset in life.Click here to sign-up for orientation.

In my next email, I’ll share another income opportunity for those looking at “work-at-home.”

Stay tune.

Defeating your Financial Virus

It has been two months since we’re adjusting to this COVID crisis.

I hope you’re still doing great.

But do you know you also have to deal with your financial virus?

I coined it with the word COVID too 🙂
Cashflow – Overspending – Values – Inflation – Disaster

And just like the biological virus, this financial COVID infects not just you but the people around you too.

It can also be asymptomatic: you don’t know you have it until you find yourself hardly breathing because of the impact of your financial unreadiness.

Good news is there’s a vaccine available and accessible to you!

Let us discover how to fight this especially in this time of crisis and thrive in the coming of the “new normal”.

Watch part 1 of the Webinar Replay here if you are looking for practical solutions to your problem.

Keep safe,
Omeng