Selling (When to sell stocks)

When is the best time to sell?



Selling is just as important as buying stocks. I had read a lot of books about buying stocks but not about seling. So.. when do you know when the stock is to be sold.. I think it is the same as when buying stock theres no such perfect formulas to follow---sometimes common sense should be applied-- but some criteria can be followed to achieve maximum profit.



Here are some criteria you can follow as your selling points. This depends on your goal and planning.



1. When you buy certain stocks you should already plan when to sell. O. K I give you an example if you buy a certain stock at 27.50 per share you can put it in your mindset that if it goes up to 33.00 that's the time to sell your stock, that's a 20% profit already. What if the scenario is inverted and the stock you bought instead of climbing up it goes down, you should be prepared to accept a loss, once the stock you buy drops to around 8-10%.

2. Sell stocks when it start to drop in price after a prolonged upswing, like when you are holding a stock for few months in an upswing trend then it start to drop in price it is time to dispose the stock.

3. When you learn that the company is experiencing bad debt.

4. When you observe that the products of certain company is inferior or people are not patronizing the product or services.

5. When the dividend income is lower than the previous one.

6. When the earnings of the company is decreasing.

7. When every price of a stock in that industry or sector is dropping.

Practical way to select a good company

How to select a good company just by observing and looking around.

O.K....As your alarm clock (panasonic) wakes you up in the morning, that's one company you can consider, why did you buy that alarm clock in the first place because you like the company that manufacture your alarm clock. You get up take shower, you use a shampoo and a conditioner which you've been using for years, then you also wash your body with soap and cream bath.
After taking a bath you brush you teeth, what's your toothpaste and also gargle with listerine.

You go down to the kitchen and made some breakfast. You prepare a coffee with a creamer you take out a bread and put some butter. You take your breakfast in a rush but before you go, you look around, you are satisfied with what you see, your refrigerator is working alright, the toaster, the gas range, the microwave oven, your rice cooker and the water thermo.

You turn off everything, the lights ( Meralco) and off you go , office here i come, while on your way you observe what's happening around, you pass by jollibee, some banks, and supermarkets, your looking at people that come and go. You arrive at your office, which you've been loyal working for 10 years already , you love your job, you like your company ( San Miguel Corp.) and you believe in your products. The day pass by so fast, you decided to do some shopping, you pass by s.m. supermart, you observe the people around, ask yourself why are more people buying that kind of product, you still look around you see a lot of people wearing a clothes of the same brand.

Do you notice what I mean by observing and looking around, all the products and companies you notice the whole day, If you invest in stock market you can select from what you know and notice which company is good, you can start from your own backyard. The products you used, the food you eat, any utilities you are using, and all the appliances in your home, be observant and you can win the battle.
Good Luck...

Investing mistakes

How can we know that what we buy is not the right one?


How can we avoid buying the wrong share of stocks?





Ahhhh... Every books I read about investing have different approach some say buy when the stocks are bullish, some say buy when they are at their lowest price. Some books say diversify others say concentrate on one kind of stock which is appreaciating ohhh... its so confusing so its up to you to decide which is best for you.





Here are some pointers to avoid burn-out in investing:

1. Avoid emotionally in love with your stocks-if the stocks are losing sell don't be stubborn thinking that it will bounce in price right away. Avoid waiting and keep hoping until your loss gets bigger and costs you dearly. It was a mistake which I made few years ago, A friend encourage me to buy a stock since I don't know about stock investment before I just go and buy. I don't know that I bought it near its top after few weeks the stock keep sliding down, I decided to keep the stock hoping that it will bounce back, months and years pass but the stock remains on its low price. If only I sold it long time ago I should have bought other stocks that is a winner.

2. You should plan every purchase (see the blog about the rules I follow in investing) in order to guide you and can make a decision right away of what to do, do I have to buy, do I have to sell, or Do I have to hold onto my investment. It is easier for you to make up your mind and do what is right.

3. Avoid stocks that are not performing well-this is one of the causes that's why a lot of first time investors never get past the first hurdle. First of all you have to select or find a successful stock- make your own criteria in selecting what you think is a good stock. tip for you--look for real market leaders

4. Don't think that you can make a quick buck in investing, better yet go to a casino and gamble if that's the way you think. In investing you need to acquire the essential skills and have to spend some time in knowing what you are doing. You have to study the market, the sectors, the stocks you plan to acquire...it takes time you know.

5. Don't take unnecessary risks-invest only on what you can afford to lose, if they promise a very large amount of reward the bigger the risk and the percentage of losing all your money is higher. Don't speculate if you cannot afford to.

6. Avoid investing through hot tips, from investment rumors, tips from pretenders who know everything about the market. Invest in what you know and not in what they know.

7. Avoid pretending that you know everything there is a lot to learn about investing, even the expert are continually learning and researching.

8. Procrastination -we always here the saying "Time is gold" but a lot of people put off financial decisions because of so many alibi's like no time, no big savings, or they might do the wrong thing. Being ashamed to invest in small amount-with this attitude you'll never start in the world of investing.

Rules to follow when investing

I believe that there are no set formulas for successful investing, no two individual are alike in their approach to investing, for each person is unique in dealing with financial matters.

But before plunging yourself in the world of investment consider some of these important things.

1. Investing in stock market is a risky process you might loss the sleeve of your shirt or the whole of your shirt. That's why before putting your hard earn money be sure you have something liquid (cash) for example you may wish to keep equivalent of six months of your monthly expenses for emergencies like loss of job and medical needs, until then it is safe for you to build your investment portfolio.

2.Plan ahead, What's your goal in investing? Is it for a long term or short term. How would you approach to invest, is it high risk, medium risk or low risk? Every investment involves some risk that you'll lose money in it.

3.I believe in the saying " Do not put all your eggs in one basket" If you accidentally drop that basket all the eggs might be broken, this saying refers to putting all your money into one type of investment. Diversify is the key to safer investing. It's not a good idea to invest in the stock of one company or stocks of companies within one industry or sectors. Spread your risk, you may not make quite as much money in a range of companies as you would with an investment in a single one if that one does well, but the risk is less. The more diversify you are, the safer for you as a beginner.

Resolutions to start savings

Here's five ways to give yourself a more prosperous new year

1. Resolution 1:

Save your Christmas bonus and 13th month pay and every time you get paid set aside 10%-15% of your salary to a deposit account or even better in a market account. Open an account from one of the major unit trust funds like Mutual fund company of the Philippines which usually pays a higher interest rates than banks.

2. Resolution 2:

Plan for your retirement - get a social security or apply for a pension plan with a reputable company like phil plan inc.

3. Resolution 3:

Get help, it is better to get advice from the expert like financial planners.

4. Resolution 4:

Talk to family members and friends regarding your plans, it is better to get a second opinion before venturing into any financial undertaking.

5. Resolution 5:

Don't be greedy, be patient.

Investing in Philippine stocks

I'll talk about investing in Philippine stock market---





First things first, What are stocks?

Stocks are listed shares that offer a chance to buy an equity stake in a company. IF you buy shares of stocks of a company you are considered a part owner of the company. You are entitled to vote in an annual meeting for the company officers and also entitled to receive dividends corresponding to the amount of shares you owned.



How can I buy stocks? You cannot go to the exchange like going to a shop, you must use a stock broker. An investor could buy share of stocks through authorized trading firms. You should open a trading account first before you can buy shares of stocks. You can find the complete list of all the brokerage firms under the trading participants at the Philippine stock Exchange website. As for me since I'm not in the Philippines right now I prefer to use the online brokerage firms, their are several of them like metrobank, accord capital, bpi or citiseconline. The advantage of using online firms is that the commission charges are less.

Once you selected a brokerage firm through online you can download an application forms fill it up and sent it back together with a photocopy of two valid identification. As soon as your application is accepted, they will inform you through e-mail, at this time you can start sending your initial investment. You should tell them exactly how many shares you wish to buy, you must also tell them how much price you are prepared to pay-tell your broker your price limits.

WHAT IS THE MINIMUM AMOUNT NEEDED TO INVEST IN THE STOCK MARKET? In Philippines equity trading is done by board lot or round lot system. The Board Lot Table determines the minimum number of shares one can purchase or sell at a specific price range. Therefore, the minimum amount needed to invest in the stock market varies and will depend on the market price of the security as well as its corresponding board lot.

Here's the Board Lot Table:

-----PRICE--------------- FLUCTUATIONS ----------------- MINIMUM BOARD LOT


---0.001 to 0.0024 -------------0.0002 ------------------------------1,000,000
---0.0026 to 0.0050------------0.0002------------------------------ 1,000,000
---0.0055 to 0.0100------------ 0.0005------------------------------1,000,000
---0.0110 to 0.0250 -------------0.001 ---------------------------------100,000
---0.0260 to 0.0500 -------------0.001 ---------------------------------100,000
---0.0525 to 0.1000 -------------0.0025-------------------------------- 100,000
---0.105 to 0.2500---------------0.005 ----------------------------------10,000
---0.2600 to 0.5000 -------------0.01----------------------------------- 10,000
---0.5100 to 1.000 ----------------0.01 -----------------------------------10,000
---1.020 to 2.500------------------0.02------------------------------------ 1,000
---2.550 to 5.000------------------ 0.05----------------------------------- 1,000
---5.10 to 10.00--------------------- 0.10-----------------------------------1,000
---10.25 to 25.00 -------------------0.25 -------------------------------------100
---25.50 to 50.00------------------- 0.50-------------------------------------100
---50.50 to 100.00-------------------0.50 ------------------------------------100
---101.0 to 250.00-------------------- 1.00-------------------------------------10
---252.50 to 500.00 -------------------2.50------------------------------------10
---505.00 and up ----------------------5.00------------------------------------10


For example:

If you want to buy the stock of a company with a share price of 10 pesos you need to buy 1,000 shares because that's the minimum required as stated in the board lot table. In this regard he needs around 10,000 pesos plus charges.

Market share P 10.00
Minimum number of shares X 1,000
P 10,000.00

plus you have to pay broker's commission, transfer fee + 12% vat, and sccp

Next you need to know the bid price of a stock to know how much and how many shares you can buy in a certain stocks.





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When is the best time to invest?

When is the best time to start investing?



There is only one answer to that question which is NOW