My First Days in the Philippine Stock Market

But before that, let me share my own story of how I actually started investing. I was really ignorant financially before, let alone on investing in the Philippine stock market. Totally had no idea about financial and investment ek-ek ( I finished a highly technical engineering no-business degree!).

I just first considered thinking about stock investing weeks after I had read Bro Bo’s book which ignited my financial freedom expedition. Then it was followed by an invitation from one of my lecturers during my board exam review.

Up to now, I could still clearly remember how that kind professor said his regret on his late entry to the market. That it took him many long years before he and the stock market met along the road.

So when I finally decided to give it a try, I went the next day to an online trading brokerage firm.
I started really small – 10k only. (Now, you can even start opening a trading account with as small as 1k lang).

Just like starting anew in anything, my clueless personality made all the moves for me in a wide vast field of unknown.

All I had to hold on was my mustard dream of financial freedom and the belief that stock investing might be a path for that dream.
I managed to cut the chase and applied for an account.

My First Purchase in Philippine Stock Market

Philstocks was my first online broker, precisely because it was the one I initially found out in the net that required only 5000 initial deposit to actually start trading.  At the present,  I’m happy as a loyal client of COL Financial.

The minimum investment required then was 5000 pesos, but I put down 10k just to put a front that I had more than the minimum. Pride I guess haha. The lady in charge gracefully accepted it after examining my forms, then handed me an official receipt, which was also the highest-valued receipt I received ever since.

With my humble 10k initial investment, I was too excited to buy a company share and brand myself a part-owner of a giant company. Hard-core traders would laugh at me for that, but I was already more than happy just giving it a try.

Below is a lengthy tutorial in case you have questions related to the above steps.
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The moment I received my account details in my email after few days ready with buying power from my initial 10k deposit,  I made my first stock order.

And my first ever transaction: buying 2000 shares of Megaworld Corporation (stock symbol MEG) at 1.87 per share!

Total cost is 3763.60 only. Wheee!

I was actually totally clueless on what to buy for the first time, and only got the hint of buying MEG from that same professor who’s teaching in our board exam review.

Recollecting, when the class becomes bored with chemical principles and unit operations stuff, he would start cracking some jokes, and then afterward would invite us to try investing. He suggested that we experiment with MEG. His jokes served its purpose, (he’s actually the first to laugh out even before delivering the punchline!), but I got more curious and gravitated to his stocks stories and followed his MEG recommendation.

To see how stupid I was at that time, I was not even aware that MEG is a real estate developer company. Haha. Whenever I see its stock code MEG on my computer screen, Sharon Cuneta entered my mind, you know, the local MEGastar. Booboo!

But who cares? When I posted it online, my computer screen didn’t ask me anyway!

And when it got matched, my heart jumped with joy. I went back to my work, but I smilingly secretly applauded myself. Deep inside I was telling myself “I hardly spend 500 pesos for a purchase, and here I am spending 3.7k for something I can’t even touch!” Whaha!

That was August 31, 2010, a different Tuesday for me.

My First Profit from Philippine Stock Market

Two days after, I checked my account online, and BANG! I saw a shock of my life! The price of MEG went up to 2.05!

I was thrilled! How can multiplying money be that easy, I thought! Feeling all the excitement, I decided to sell it right away at that price. I posted a sell off-hour (after trading hours) order at 2.05 per share that afternoon and was hit the next morning. Paper profits( meaning profits that’s still virtual until actually sold) became actual realized gains!

I did the math, ‘twas more than 200 pesos gain just for three days. Hmm, not bad at first sight.I don’t think I can spot the same by whole-day roaming along the busy streets of Metro Manila.

But computing the rate of return, that’s more than 9% gain in just a three-day period of time! That was obviously not REALLY bad! (Note: To compare, your money in your favorite bank grows at less than 1% a year).

I disclosed below a snapshot of what I have experienced later on that year 2010 just as a beginner.

As you can see above, my second buy of stock was 2000 shares MPI at 3.55 per share.

I couldn’t remember where I got the inspiration of buying Pangilinan-owned MPI as my next move (I guess from some rumors), but elated by the price appreciation I had in MEG in just three days, I purchased 2000 shares of it the next trading day. After just one week and one day, seeing another good return, I immediately put a Sell order, and broom, that’s instantly more than 7% gain!

The next was even more fantastic and ecstatic.

I still remember when my Math reviewer this time said “Mahina nako pag di umabot ng dose [yung price] ang SMDC”. He appeared to me as experienced enough to give such a prediction.

So innocently and experimentally relying again on that advice alone and trusting his instincts, (without knowing yet about fundamental and technical analysis), I entered a buy order for 1000 shares of SMDC. Seeing it was executed, I went back to my job and waited for what would happen next.

But lo and behold, in only just two weeks, its price went up high to 10.36. Super amazed by the profits in a very short period of time, I immediately grabbed the chance, and reaped that whopping 21% gain. Waaah!!!

As you can see from the list, the profits were even followed by other buckets coming from MEG and FLI.

I bought 3000 shares of FLI and another 3000 shares of MEG at 2.49 at the same day. The 3000 shares of FLI though took a longer time to appreciate, that I needed to average down by buying another 3000 shares at 1.27 per share until I finally sold it all at 1.35 per share a gain of almost 2%, still bigger than the interest rate of banks.

But the 3000 MEG shares I sold immediately when made its way up to 2.78 per share at an enormous 13% gain in just three weeks.

Is your money sleeping in the bank?

Here comes the more interesting part.

You can check the prices of the stocks mentioned above and you’ll find out how the stock market could be a GREAT OPTION when it comes to growing one’s wealth for the LONG TERM.

 

This does not include yet the dividends given for the last 3+ years. This gives us an insight as to the common observation that the rich get richer. The truth is that there are many available vehicles to ride on that make wealth building and protection a lot easier.  And investing in the stock market is just one of them.

Now digest all those figures and start your imagination. Henry Sy’s BDO and Ayala’s BPI will never ever offer such interest rate in your savings accounts.

What they would skillfully try to do instead is to attract every individual employee to deposit their hard-earned money in the form of savings, time deposit accounts, checking accounts or any other fancy name, invest them wisely to buy shares just like what I did, obtain that 10%-20% gain in a matter of DAYS with their trading skills, and as a sign of respect and thanksgiving after leveraging on your money, give you a 0.5-2.5% ANNUAL interest as consolation and solace. Now you know how they can afford to build and maintain those large air-conditioned buildings and pay all their bankers and managers.

Beginner’s Luck

Now I m not sure if those consecutive gains is just what they call beginner’s luck, but that great performance really caught my interest in the stock market as a vehicle to achieving some of my goals.

At this point, it would be careless of me if I would not mention the fact that even though I earned during my first days in the market, remember that the risk of losing money will always be there. And so it’s important not to be carried away by the returns mentioned above and balance your view with the risks always involved.

 

My Current Investing Strategy

Fast-forward, now I’m still learning, and… earning.

In fact, many times I get surprised when I check my email and be notified by the money being added into my account as dividends I received as an investor (without doing any active work except to invest). In the sample below, just the dividend pay-out alone already beats the earnings from the bank’s savings account interest! (A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. You’ll learn more about this in the lessons below.)

As mentioned above, I primarily use now the Strategic Averaging Method (SAM) which has removed all the stress in all my investing decisions. I believe it’s the easiest way of growing one’s wealth through the stock market in the long term. (You can learn more about this strategy here.)

And looking back, I realized I was very lucky I started doing this early in my life. At least, may napapala ako (investments) kahit papano in my years of working (without so much analysis).

That way I can enjoy my present life without worrying (or sacrificing) my financial future. Many people I’ve met through this blog actually showed so much regret on their LATE entry in preparing for their financial future. And this is one of the reasons why I started this blog.

To pay it forward, I shared all my learning (mistakes included) in this blog from the point I started investing with zero knowledge.

So enjoy reading the rest of this page. Share your questions/comments below if you have. Also, subscribe in the form below so you get the latest posts on this site straight in your email.

You can also stop muna at this point and ponder how investing in Philippine stock market may help you in achieving some of your financial goals.

Pero kung nagmamadali ka na talaga, watch the short introductory video I made here where I summarized the basics that you need to know and do to actually start investing in Philippine Stock Market. After watching, just follow the suggestions outlined below for more guidance.

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