It has been about two weeks now that the Philippine Stock Exchange is going way down south.
Wherever I go in the online world sentiments of bearish market are seen. Newbies panicking with so many question even to the slightest drop of value in their portfolio(don’t ask mine you might get a heart attack).
There are a couple of things we should understand and accept in regards to this situation. So don’t panic and do whatever is the best we can get from a bear market.
1. The downtrend is mostly effects of external events. If your read news the blame would be the US Federal Reserve’s action, China’s economic situation, and Japan’s story as well.
2. Foreign investors are cashing in their earnings and looking at better opportunities with the news of US economy going back on track.
3. Most investors has been saying that the Philippine Stock Market is too expensive. After saying this for a long while I think they really mean it now.
With all that we could do three things: buy more to average down, cash in your profits if you are still positive, and wait.
Cost Averaging at this bargain times are the best way to really bring down your cost per share. The only problem is when to start buying? Lots of investors like me thought the last week of May was the last but we were wrong. We thought it was time to buy and after buying some considerable number of shares the next week it was a bloody days of sudden drops of the PSEi.
That is why the question that would help you is to know when. I heard the US stock market has turn positive and we are hoping the Dow effect will take effect again.
On the other hand if you are at a profit it would be best to take your profit and reposition yourself to better stocks that are now on bargain. That way when the stock market starts to pick up you too will be riding it.
As for the rest of us like me, we are all in the waiting mode. Let’s not lose our cool and give in to this emotional pressure to sell at a loss. Take some time off monitoring your stock on an hour to hour basis. Check it every three days or every week instead and while doing that engaged yourself into your hobbies like photography or others so that your could take off your mind from the depressing picture of your portfolio.