How do you decide on your stock picks?

[caption id="attachment_1098" align="alignleft" width="290"]Traffic lights and stock trading guides source:[/caption]

Yesterday I was driving along Guam's EDSA, Marine Corps Drive, and several traffic lights were not really working specially in the four-way intersections. At first it was in the early morning after i came to the office to save someone who left an important thing and in my afternoon long walk crossing in the pedestrian lane with baffled tourist not knowing how to go to the other side.

That is why this question came up to me.

Lots of new stock investors in the Philippine Stock Exchange are actually inexperience and just heard of the nice things happening in the Philippine Stock Market and economy and so they jump in to the bandwagon. And because of that lots of them are now actively seeking answers in forums, Facebook groups, and blogs which is good because they are following one of the important rules of stock investing which is not to be shy to ask.

But advice of caution. Always remember that you and I have  a different exposure to the stocks that the guys in the forum, FB groups, and blogs. Even your own online stockbrokers have different advice because they don't just handle thousands of funds but billions of funds of several stocks. Because of this I am cautioning you of the way you pick your stocks.

Lots of you follow some kind of a bulletin, memo, or stock pick report sent out by groups. Again I am not saying this is bad but always remember that you still make the decision. That is why I mentioned about traffic lights.

Such bulletins, guides, stock pick reports are like traffic lights. Yes we rely on them to guide us in the road same as we do in our stock investments. A lot of you might get impatient when the traffic light is red and you are in a rush which if we compare in our stock investment activity we become impatient by buying or selling right away only to realize afterwards we made a mistake. Also at times we follow it and at times we end up late or miss our appointments. Same too with our stock investments. We keep on waiting and waiting for the signal to sell and after waiting it came and we sold it but only on a small profit because we never sold it when it was actually high.

Yes traffic lights are good and we should obey them but if you have planned your route well and if you have studied your travel you would probably be in your destination faster and on time. That is why you should have your own trading strategy or plan that you stick to. It doesn't mean that you have to strictly follow someone's advice, in such things like your own money you get to decide its future and not let someone make such decision for you.

Plan your trades. Established your trading strategy.

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About the blogger

Louis Delos Angeles is a Certified Public Accountant, blogger behind Investing in Philippines, and author of Investing in Stocks: Preparing for the future small amount at a time. Check him out in Google+ Learn more about Louis and his financial freedom advocacy here.

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6 comments for “How do you decide on your stock picks?

  1. rej
    February 11, 2013 at 7:44 am

    We keep on waiting and waiting for the signal to sell and after waiting it came and we sold it but only on a small profit because we never sold it when it was actually high. - SO TRUE. hehe

    PSE, today is euphoric which makes me a bit skeptical if the stock market can sustain that level. i think most stocks now are overbought if to be compared to other stocks under the same category. but i still opt to go with the flow short term to medium. selling it without hitting my target market for as long as the profit is satisfying enough. then transfer to other stocks that are relatively cheap and still has much potential to go higher.

    pagpinagsamasama ang maliliit, malaki rin ang resulta. ;D

    • February 11, 2013 at 4:14 pm

      Tama sis Rej ka nga sa mga kapitid nating mga Tsino, kahit maliit kita basta mabilis ung balik :), we need to make sure we get our small returns several times while the market is trending up

  2. March 4, 2013 at 9:01 pm

    Great point! I winged it when I started out and didn’t really get as much as I could’ve. Trading plans are definitely a must.

    As is your own knowledge of fundamental and technical analysis - relying simply on stock tips from others can be hazardous as they have different timelines, goals, experiences, and even financial situation. In short, we might not be able to take the risks they’re taking or their plans might not be the most optimal plan for us. Of course, their tips are still valuable, we just need to be literate ourselves.

    • March 6, 2013 at 8:00 pm

      Thanks Carlos! Financial education is not that much. Philippine online brokers have some free seminars for their clients. You can also further your education by really attending seminars conducted by reputable CFA or financial gurus.

  3. April 2, 2013 at 11:50 am

    My stocks related decisions are purely base on Truly Rich Club.

  4. Chin Chin
    April 4, 2013 at 9:50 am

    If you want to learn more on how to invest in the stock market, you can check PSE’s Market education website

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