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PSEi: It’s Going Down

Sit tight. Keep watch. Pray. Winter is coming.

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The year-to-date performance of our stock market has been not as encouraging as expected. Truth is, it has been going down since it peaked sometime in April. We are much lower from our short-term moving averages, MACD still points to a downward trend while RSI is also weak albeit some recent recovery.

We are tiptoeing a crucial 7500 levels and who knows where we’ll be if 7500 does not hold. The general global economic condition as well as the economic state of our beloved country has not been too favorable as well. Some probable reasons pointed out by analysts for the lackluster performance of PSEi are as follows:

  • Weak 1Q GDP results of PH. Market and analysts were expecting a much higher growth figure
  • Weak 1Q corporate results. Same thing, lower than expected
  • Continued net foreign selling. Dubbed as smart money, foreign funds have been letting go of our stocks for something else somewhere else. Why o why?
  • Politicking ahead of 2016 Presidential elections. Expect this to get worse in the months to come. Questions are, (1) will government still be able to push for economic growth this year amidst all the election circus; (2) will there be continuity, whoever runs and wins in 2016?
  • US and its telenovela Fed meetings on when they shall increase rates. We’ve been expecting this since 2 years ago and yet, Fed rates have yet to take off
  • Jittery PH-China-Rest of Asean (+ US and Japan) relations due to territorial disputes
  • A black swan event perhaps such as, God forbid, a mega Manila earthquake, especially since our neighboring countries have been experiencing tremors the past few months
  • Greece and its debt negotiations with EU

Who know’s where the market is headed? If I did, I wouldn’t be suffering losses with my investments, right?

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Those who have cut loss rates (e.g. -8%) might have hit this by now, so the question is if they followed their trading rule on cutting losses and were able to get out, sitting on their cash positions; or they were too emotional to let go, hence in a deeper bleeding hole.

Those who still have cash bullets, I suggest you hold your fire, stay put and wait for better signals.

Those who are in a regular investment plan, then just keep it. I assume your objective for opening such is long term, hence this downtrend is actually a chance to average down.

Prepare a list of stocks that may benefit from the upcoming elections. Historical elections will tell you this. Maybe stocks on media and consumer goods? But don’t buy in yet. Monitor these closely.

Sit tight. Keep watch. Pray. Winter is coming.

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About Geri (356 Articles)
Founder and main author. Husband, used-to-be-breadwinner, God-made multi-millionaire, employee, financial planner and adviser, investor, stocks trader, entrepreneur, agri-preneur, book author. Firm believer that all Pinoys deserve a richer life. Not a guru, but a forever student of the investments world, a work-in-progress.

10 Comments on PSEi: It’s Going Down

  1. Thanks for sharing your strategy. 🙂

    Like

  2. 1. You might want to consider doing cost averaging or investing regularly (e.g. monthly) movin forward to somehow lessen chances of huge losses at time like this.

    2. Also decide a cut loss threshold (some use -8%) so that when this is hit you can already sell without questions asked and emotions getting in the way.

    3. They also have what they call sell to the sleeping level. If the losses are already bugging you and giving you sleepless nights then cutting your losses might be a good idea.

    Nonetheless, I'm not sure what your entry level is but barring any earth shaking circumstance, I would think PSEi will be in a better place in 3 years time compared to from now. Unless we go bearish suddenly and if that's the case then all bets are off the table. Goodluck!

    Like

  3. 1. You might want to consider doing cost averaging or investing regularly (e.g. monthly) movin forward to somehow lessen chances of huge losses at time like this.

    2. Also decide a cut loss threshold (some use -8%) so that when this is hit you can already sell without questions asked and emotions getting in the way.

    3. They also have what they call sell to the sleeping level. If the losses are already bugging you and giving you sleepless nights then cutting your losses might be a good idea.

    Nonetheless, I'm not sure what your entry level is but barring any earth shaking circumstance, I would think PSEi will be in a better place in 3 years time compared to from now. Unless we go bearish suddenly and if that's the case then all bets are off the table. Goodluck!

    Like

  4. Investing regularly ( like same time of the month) or enrolling in monthly investment plans (like BDOs EIP) saves you the trouble of deciding when to buy (and the emotions that come with it).

    We've seen some improvement in PSEi the past 2 days but i won't say we're already out of the woods. You might want to split your budget into 2 or 3 and enter the market in tranches if you find the prices attractive already.

    It's hard to bottom fish but my read on the chart is we haven't bottomed yet. Goodluck!

    Like

  5. Investing regularly ( like same time of the month) or enrolling in monthly investment plans (like BDOs EIP) saves you the trouble of deciding when to buy (and the emotions that come with it).

    We've seen some improvement in PSEi the past 2 days but i won't say we're already out of the woods. You might want to split your budget into 2 or 3 and enter the market in tranches if you find the prices attractive already.

    It's hard to bottom fish but my read on the chart is we haven't bottomed yet. Goodluck!

    Like

  6. NAVPUs in BDO are decelerating and my investment goal is for long-term. Should I take advantage of these low NAVPUs? Your feedback is highly appreciated.

    Like

  7. Anonymous // June 8, 2015 at 7:10 am // Reply

    Hi Geri i invested in bpi uitf equity last month and now the fund is experiencing losses almost 50k now, I was so stupid not to invest in averaging method, anyways i dont need the money for the next 3 years but my plan was to trade in uitf and now the psei in going down, i am so afraid the psei will further go down for a long period of time due to upcoming election, is it advisable if i pull out half of the fund and wait for the other half to gain and recover the losses, thanks

    Like

  8. My investment strategy is buy and hold and I would like to hold them like almost 'forever' collecting dividend yield, I would sell a stock if a company's fundamental change like cutting its yield. But other than that I welcome volatility. I cant predict where the market is heading, nobody can't… The best thing an investor can do is to dollar cost average or peso cost average. Meaning to buy equities on a regular basis such as monthly/weekly/bi-weekly. If Mr Market goes down, buy more, if Mr Market is high, buy less. If Mr Market is in regular trend, buy your regular scheduled amount. This strategy will reward the long term, patient, value investor.

    Like

  9. The bigger questions are what are your objective and time horizon for investing in Philippine stocks? Based from the trend it might still head downward but if your objective is very long, then being on the lookout or doing some average downs should be fine.

    If you need the money this year then stay away from PSE. Unless you're the type who plays with basura stocks.

    Like

  10. Anonymous // June 7, 2015 at 6:25 pm // Reply

    Is it still an advantage to invest now or should I wait for the PSEi to go up?

    Like

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