Stock Market Investing - Never Too Late to Start
I know, I know. I once said here before that I would never sell at a loss. I guess I got so impatient with one of my positions (EEI) that I actually sold some units a few months back---going against my very own rule not to sell at a loss. I rationalized that since I have no money for top-up, being currently unemployed, I could have more chance of possibly increasing my numbers if I play around with the positions I have. Of course since I still have little, I can't do much. [Thus, the encouragement, to top-up as much as possible.].
Anyway, the past few months were a mix of regrets and delights. I regretted selling at a loss some units of EEI. But then again I would not have had the chance to buy new positions and gain a little. My thought process back then was just to earn a bit of profit, instead of watching my port for another month without movement. That decision to sell in early June cost me PhP3,173.76 around 22% loss . Hehe, yes---they're not BIG, but to someone with little in her port, any loss however small is still big enough. In fairness to EEI, however, the story was not all loss. See, on May 19, I managed to bag in PhP1,114.16 or almost 18% gain as there was a time in November last year that I bought 1,000 units of EEI for only PhP6.20 a piece. That's a huge discount as my average price then was around 9.65. Since October of 2014 to November 2015, I've accumulated 7,000 shares making up for more than half of my port.
I first bought at PhP11.20 a piece, and with top-up in the course of a few months brought down the average price to PhP9.65. The last purchase in November 2015 for PhP6.20 a piece, and with the price even going down made me think about finally cutting loss. Additionally, the Fair Value (FV) at that time by COL was just PhP9.50. I reasoned that the current FV (or target price) is still much lower than my average price. SO, even if the FV is reached, I'll still be staring at a paper loss. Thus, time to LET GO. BUT I couldn't actually sell at a loss entirely. So, much like when I purchased them, I sold on staggered basis too, hoping that prices will go up. The prices in June was around the range of 7.30 to 7.45. So against my own rule, I sold some units at a loss from original price of 9.26, sold at 7.30, and from 9.51 sold at 7.45 and 7.52, respectively. NOW, in just a couple of months---the price of EEI has bounced back to the 9-peso level. It closed today at 9.22---still much lower than my average price of 9.65 or 5.24% loss. EEI's price bouncing back is the reason for the little regret! Imagine, I held the shares for 10 months, and had I waited for another two---my loss wouldn't have been as high as 22%! Currently, COL has changed their estimate of EEI's price and has set the new FV to PhP12.70. Although, I just read earlier that they are currently doing another review of EEI. Anyway, I now only have 4,500 units, and decided to keep them much longer, until I change my mind. I'm hoping share price will go up again just like it did one day when it actually turned green for a couple of days. Moreover, there's an upcoming cash dividend of .10/share with ex-date on August 26, and payable on September 26. Four hundred pesos of cash dividend, while not big, is still an earning!
As you can see from the above picture, when you have a stock trading account your portfolio can either turn green (indicating GAIN) or turn red (indicating LOSS). All these are paper gain or paper loss. You bag in the gain or suffer the loss IF and ONLY IF you do a sale transaction.
Drat, I veered away from my initial goal in writing this post, which is to actually encourage my friend and others out there to NOT wait out and get around to submitting the missing requirement/application. That way, she and her husband could start their own stock market investing journey. During that quick chat, she mentioned something about being late in the game as we're already 37! My encouragement to people my age, that in this case---it's BETTER LATE than NEVER. Think of it this way, if you DON'T START NOW---the guarantee is you have ZERO investment. But if you DO, even if you are on your way to your 40s---at least you are moving towards having your own investment portfolio. Opening of account starts with a 5,000-peso funding, and if you religiously top-up even for as little as 1,000 a month. Then, by the end of your first year you'll have more or less PhP16,000 investment money. It may not be BIG ENOUGH and far from the million you wish to have someday, it's still way better than having ZERO after 12 months. As to the argument that it's late if you start in your mid-thirties, well, our life expectancy now has increased. Who knows we might get to live up to the very ripe age of 80 years old---that my friends means you have more than forty years of investment horizon! Still thinking that it's too late for us, over mid-thirties people? I hope not.
If you are just starting out, let me tell you that it will be scary at first, especially choosing your first position. But as you gain experience, you'll soon realize that your fears regarding the stock market are unfounded. Sometimes the only way to get around fear is to dive right in and be surprised that all those preconceived ideas have NO basis at all. Reading blogs and books might also help ease your fears. If you're not the reader type, there are many videos on YouTube that you can actually watch to jump start your stock market journey. Check out the channels of Pesos and Sense, J3 Patino (not-related, hehe) on YouTube, or Fitz Villafuerte's blog: ReadyToBeRich for more guides in stock market investing.
P.S. If you are ever interested to try this out and knows no one to help you out, shoot me an e-mail at vetlongwalks@gmail.com. I'll be glad to help in anyway I can, FREE of charge. But if you insist, I don't mind being treated to a McDonald Hot Fudge Sundae, hehe!
HAPPY STOCK MARKET INVESTING, FOLKS!
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