Over the years, we’ve witnessed the phenomenal rise and fall of stocks in the Philippine Stock Market. Despite the what-seems-to-be a roller coaster ride because of the ups and downs of stock prices, it is now commonly accepted that stock market investing is one of the best place where we can let our fortunes grow. What many investors, perhaps the new ones, still do not accept is the fact that stock market investing is “not complicated” since many still hold back because of their fear on the jargons they hear or stories of losses wafting around the stock market. Nevertheless, others are still not into stock market investing because they don’t have the time to invest or understand the market.
Stock market investing is complicated in some ways but simple in other ways, too. What you need to know before converging yourself into stock market investing is some simple truths about it. Allow me to discuss some of the things you need to know.
Stay away from the herd mentality
In stock market investing, when everybody seems to be investing in a particular stock, your tendency as a potential investor is to invest in the same stock. This is a typical buyer’s mentality – strongly influenced by his acquaintances. This strategy is bound to backfire. Stay away from the herd mentality as it will only result in the loss of your hard-earned money. Warren Buffet, an American business magnate and renowned investor, said, “Be fearful when others are greedy, and be greedy when others are fearful!”
Investors usually go by the name of a company or the niche they belong to when picking a stock – this is not the right way of stock market investing. You should do research before putting your money into the stock market. However, if you don’t have time to study the movements in the market, get the help of a reliable financial advisor. Remember, do not invest in a business that you don’t understand. It is important that you know what type of business your chosen company is in, and also take note on their previous performance. If they performed well in the past, they’re most likely going to perform well in the future.
Mind over emotions
Fear and greed sometimes are the villains of your journey in stock market investing. The temptation of quick wealth is very difficult to resist. As an investor hears about big returns from some unknown companies, he speculates and starts to buy shares without taking into consideration the risks involved. Many investors have lost money in the stock market because they let their emotions prevail over their right-thinking. And when the market situation reverses, they panic and sell their shares even though the prices are on their feet. Fear and greed are some of the emotions you don’t want to tag along in your investment.
These are just a few of the things you should know in stock market investing. These things have the ability to transform what may seem like a formidable task into something wealth-reaping. If you wish to know more about the stock market, particularly in the Philippines, our proprietors are among the top Filipino professionals who have international accreditation from foreign financial organizations. We conduct short courses on stock trading, forex Philippines, technical analysis, among other subjects essential in stock market investing. We also offer equity advisory subscription service. Learn more today.