How to use the Smart Money Pinoy's Investment Guide? (PART 3)
There is an art and science to stock market investing, I had a chance to study a lot of styles, books, lectures, and technique. My Smart Money Pinoy investment guide technique has been revised more than 10 times. In an effort to help investing and stock picking easier for me and for the regular Juan.
I will not say my technique is the best because I’m always trying modify and improve the algorithm non-stop hence it yield me more than 50% gain throughout the year of Good and Bad times. I will try to make this step by step instruction to make it simple.
Some people will say my guide is simple and everyone can do it or it looks like a guide from TRC actually it is more complicated than that I incorporated a lot of factors that compute for the chart hence please don’t try to figure it out because it really looks like this.
1. What do you do upon opening the program?
First, update the prices of every stocks. It is the only thing you can edit in the program because of the password protect. It usually color code with blue columns.
I know it’s a lot of work but believe me you get faster thru time.
2. When is the best time to update?
Well everyone has different schedules, I usually update mine before I buy stocks or the night before the market opens hence I already have an idea what stocks to buy beforehand.
3. After updating, what do I do now?
I usually write down on paper that stock with a buy decision and their corresponding Investment rank. I will prioritize to buy higher rank stock on a buy decision. The higher the rank means the higher its fundamental growth plus technical support. Higher chances to win.
4. Limited budget. What can you do?
Rule #1 in stock market. Invest money that you are prepared to lose hence I only invest about 15-20% of my income.
My technique of long term investing is more focus on discipline and regular investing rather than one time investing huge amount. Remember, we are trying to beat market volatility and market sentiments thru long term horizon.
If your account balance is not sufficient to buy recommended stocks, then don’t spend it rather you just wait for your next investment period and hopefully you can accumulate enough money to buy recommended stocks. I personally use the Col platform as my bank and deposit 15-20% of my earnings there. It becomes a habit that I put money and invest every 15th and 30th of the month.
5. When does my stock turn from red/ loss to gain?
Usually in my experience, this happens within six months in a bullish market and 1-2 years in bearish market. I just don’t mind it and do what is boring and invest regularly on good and recommended stocks.
6. How to diversify?
As u can see our stock guide is divided into different categories like Banks, Consumer, Power,etc. I try to buy to spread my funds around the different segments or categories. I try to limit and re calibrate my stocks to not more than 15% per company.
With due respect to other investors opinion that you have to focus on 1 -2 stocks only because the rationale would be would be hard to monitor. With my algorithm, I can monitor as many stocks as possible hence I don’t have this limitation.
I diversify to protect myself from loss over 1 or 2 stocks. I guide my stock choices based on the economic direction of our country.
7. How about losing a few thousand here and there?
I don’t concern so much on losing a few thousand on paper loss, fees and taxes. The Simple reason that I calibrated my mindset that I can recreate Millions in the stock market hence losing a few thousands is considered acceptable loss.
8. Final says?
You are in control of your own life and investment. We have to accept the good/gains with the bad/losses. I always believed that I’m not only investing to make a quick buck but rather every time I invest I’m infusing liquidity in Philippine owned companies hence helping company employ Filipinos. I invest primarily for the development of the Philippines and for the lives of the Filipinos. This type of mindset is called impact investing. Impact investing gives you better financial grit and risk tolerance.
Good Luck and God Bless
Part 4 of the series explains My personal Profit taking and re-investment system