Everyone wants to rule the world these days.
But even though it’s a fact that there are no easy ways to get rich quickly, there are some few lucky folks who get the moolah that they dream of in a very short period of time. Some are plain lucky because they won the lotto or the the jackpot at the casino. And very few investors and traders just really know how to choose the right stocks and become really big time winner using his few millions.
But this does not happen most of the time to many people. As Bo Sanchez’s book would say, “The Turtle Always Wins”. In that book, it’s mentioned that consistent and habitual effort that count most in achieving success in the investment world.
Stick To Your Regular Saving and Investing Program
It may sound cliche, but it’s the truth. Start early and stick to your monthly saving and investing schedule and you will soon see how your money has accumulated over time. This has been a time-tested strategy that one with long term goals should always consider.
Remember, it’s not about having a bigger salary that matters but your habit of consistently saving and investing for your goals.
Optimize Your Purchasing Power and Beat the Inflation!
I have featured an article about low-risk investment options in the Philippines some months back. But these are just either meant for your short term goals or for capital preservation in the medium term.
For example, some time deposit products may give you more than 4% on an annual basis, but these are subject to taxes if redeemed. The same goes for other instruments mentioned in that previous article. Although they may provide you “sure ball” profits, they may not be able to provide you the growth that investments such as equities/stocks can give you. Low risk instruments these days may not be able to cope up with the inflation (now at around 3%).
Inflation simply pertains to the increase of prices of goods and services while your buying power reduces. I remember that McDonald’s Big Mac meal back in 1999 costs around Php75. If I had Php100 back then, I can still have a change of Php25 if I bought that Big Mac Meal. But fast forward 2015, that same Big Mac meal costs more than Php150. Your Php100 will not be enough today for that sumptuous, calorie and fat-filled fastfood meal.
Spread the Risks and Diversify
Buying one stock may mean loyalty to that specific company’s business. However, a wise stock market investor will not let one industry kill his or her money’s growth.
The modern Philippine stock market is a very young market, so to speak. This exposes investors to a very volatile market. One stock may perform good at one point and become a laggard at another. No one can predict the performance of the stock market what more if it’s just a single stock?
That’s why we at the Truly Rich Club recommend to members to diversify their portfolios by not having a stock that weighs more than 15% of their total portfolio value.
The stocks we are recommending to members may be from the same list that COL Financial shares to their clients but TRC’s SAM list is narrowed down to just 8 to 10 stocks from various asset and industry classes. This list helps our members pursue optimal returns and minimize downturns as well. As always, do not put your eggs in just one basket.
Cost Averaging Method of Investing
Many people do not have time to study or analyze the market. A lot do not even have the luxury to choose which stocks are best to buy at a particular period.
This method of investing let’s an investor decide which “blue chip” stock to buy at a fixed date of the month using a fixed amount of money for investing.
If a stock’s price is lower than the previous period, one can buy more shares. On the other hand, if a stock’s price is higher than the previous one, one buys lesser number of shares. But in the long run (say, more than 5 years), an investor’s average purchase price is low. The lower the average price, the more profit to keep.
Easy Investment Plans Are a Great Option
Many people do not have “that” discipline or time to save and invest regularly. In this case, the best thing to do is get your money enrolled in automated investment products. Some stockbrokers like COL Financial offer this type of investment plan called EIP.
For pooled funds, BDO and BPI have Easy Investment Plan and Regular Subscription Program respectively. This allows an investor to just keep funds in their savings accounts attached to their investment accounts, and the bank’s systems automatically debit the agreed amount at the scheduled time.
Do Not Change Your Plan
It’s the consistency and sticking to a plan that will save an investor a lot of money.
Remember that investors who listen to people they do not know are those who lose a lot of money in the end.
Check your budgeting and make sure that you keep at least 20% of your monthly income or salary. Invest this in equities or in a pooled equity fund. Focus on your long term goals and reinvest your gains and cash dividends.
Keep it slow, simple, and steady and you will surely win.
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