Our last article promised that from this point
forward we will be discussing the principles contained in the book “The Richest
Man in Babylon.” However, because of the
length of that would-be-series, I opted to simply answer one of my dearest
friends’ question.
Last week, this friend of mine asked: Can you invest in the stock market without
attending any seminar? Which stocks are
good to buy?
I was shocked! Why
would she ask me about such things? I’m not a financial expert. But I answered her questions as far as my
limited understanding of the stock market could reach. And then I promised her that I will send her
an email so I can share her what I know.
While I was thinking of fulfilling my promise, I thought,
“Hey! Why don’t I just post here my
supposed email to her? That way, more
people will see and hopefully learn too.”
So here are my answers to her questions.
1.
Can you
invest in the stock market without attending any seminar? The answer is Yes. Seminars are not required before someone can
participate in the stock market. I know of people who have been in the stock market for a long time but haven't attended any seminar. But if
I were you, I would grab every opportunity to learn first before I venture into
the stock market. A little research in
the internet will even lead you to some free seminars that companies may offer. You will be surprised with how much you can
learn. I know of an online stock broker
who provides free seminars on investing in the stock market. Spending a little of your time to learn a few
new things can go a long way. Tip:
Don’t do this at work, dangerous.
2.
Which
stocks are good to buy? My initial
response was, “It depends. Are you gonna
be a trader or an investor?” Honestly,
there are no best stocks.
In a stock market as young and active and
volatile as the Philippines’ who would be able to say which stocks are good and
which are not? Just a few weeks ago, the
entire country was “hooray-ing” for the all time high records being achieved day
by day at the Philippine Stock Exchange.
International business news channels and other media were talking about
the Philippines. But today (June 25,
2013), the PSEi closed at 5,789.
I couldn’t even remember when was the last time it was that low. So, selecting the best stocks requires a lot
of analyses and understanding. It will
always boil down to whether you are going to be a trader or an investor. Traders look for the short-term. Investors will be there for the long
term. Which of the two are you? Tip:
If you will be an investor, there are lots of good companies to take
part in.
What’s your “WHY”
Perhaps the more important question to ask is "why." Like all other decisions, whether in our professional or in
our personal lives, the first thing we should ask ourselves is the “Why” of things
we do. Ask yourself if your “why” would
be worth the time, the money and the efforts that you will be investing for it. Your why will be the foundation of the
succeeding actions and decisions that you will take. So make sure it is founded on something solid and unshakable. Remember the two man who built their houses -
one built it with the sand as the foundation and the other built it on solid rocks? You know the rest of the story; Jesus has
been telling that to the world for more than 2,000 years.
If you know your whys;
the how, what, where and when will come in handy.
Investing in the stock market is very exciting. In a short period that I am studying it, I
realized that it is not for the faint of heart.
One day it’s up, the next day it’s down.
Or with what we are experiencing right now, the Cebuana used to say, “it’s like gravity has also been pulling the
stock prices down.”
In the stock market, the question is not how much are you
expecting to gain. The question is how
much losses can you handle. If you can’t
stand the sight of your portfolio getting all red (I say “red” because it is
the color of decline), you may want to reconsider other options. Stock
investing is not for everyone unless you are willing to learn.
Disclaimer: I am
still a student trying to learn the ins and outs of investing in the stock market. Or should I say, taking part in the ownership of giant companies. I
wish you could join me in this new and exciting endeavor.
P.S. Whatever your aspirations may be or your
chosen path to financial freedom is, always remember that as a PMCer, our goal is to be millionaires for reasons
higher and more noble than the money we could amass; it's all about the lives
we could change.
