Thursday 30 May 2013


As I write this post, Philippine Stock Exchange has been experiencing a slight correction. If you're a newbie, and it's your first time to experience a downtrend, I've prepared a separate post to boost your ego a bit. Click HERE.

SELL IN MAY THEN GO AWAY - it's an adage that has a basis, matter of fact. Those candlesticks and charts record a trend making this advice valid... but here's a deal breaker: It's true IF your time horizon is short-term (one year or less). The 6-word quote encourages short term traders to sell all their issues and go back in the market some time in August. Doing this is better rather than letting your money sleep, making it prone to seasonal downtrend.

IT'S CLOSER THAN WE THINK - Let's go to a practical, 2013 Philippine setting. May is the month where Filipinos take out a portion of their stocks to finance tuition fees. Some also have plans to wed in June necessitating them to sell stocks. Massive stock selling may mean a down trend in stock prices. Making May a vulnerable month.

Given these facts, should we be wrapping up our stocks and go away? Here are some reasons why you should STAY IN MAY AND STILL BE OKAY. 

Source: HERE

1. GDP (Gross Domestic Product) growth rate will be released very soon. Simply put: High or sustained GDP rate will attract investors locally and internationally. Related News: HERE

2. SDA (Special Deposit Account) Rate Cut. This is one long discussion but to drive home a point, it's as if Bangko Sentral ng Pilipinas is saying that you can no longer park the Php 1.9 trillion worth of money at BSP and earn a decent interest. 

Simply put: When these money goes out of BSP, it will flow into other investment instruments (cough, stocks, cough). Or if not, it will go to real estate or consumer goods - either way, this will have an awesome effect on Philippine Stock Market. Related News: HERE.

3. Moody's Investment Grade (is on the way). Fitch and Standard & Poor's have given their nice investment rating to the PH. And if you're invested in PSE this year - you'll see the difference these grades can make! It's nice to make most out of this temporary correction, take it as a sale season to buy those blue chip stocks. Come Moody's rating - you're already positioned to earn.

4. Finally, 2nd quarter of 2013 is just around the corner. High profit from businesses means an instant boost on their selling (market) price. It's best to buy stocks before they release the Financial Statements, chances are they're not overvalued.

As I explore the world of stock market, I candidly asked myself "Why just now?! I could've doubled my money had I been invested the past year." Hmm.. After much thought, I settled and just thank the Lord that I have the opportunity to earn passively (in His own perfect time). 

Stock Market Investment is both a mental and spiritual exercise, believe me. Guess what's the additional item on my prayer list? Philippine Economy! After all, a stakeholder only wants the best for her businesses. -CMK.

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