Manila, Philippines

Stock Market Outlook 2019 – COL Financial, BPI Asset Mgt

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The PSEi ended in red this February, closing at 7705, down by 4.3% for the month. This comes after months of recovery starting October last year. On the monthly chart, the conversion line (blue) of the ichimoku cloud system remains below the base line (red line) which means it remains bearish and the recovery from Oct-Jan did not change such trend. The green ichimoku cloud is thinning and can turn into a bearish red cloud if downtrend persists. Stochastics show increasing momentum though.

PSEi Monthly Chart as of Feb2019

Nonetheless, the Feb candle only closed at about half of the Jan monthly candle, so it did not erase all gains we got from Jan. We shall see whether March will be a better month, or if it will resume the down trend possibly towards 7500 (moving averages) or worse to 7200 (cloud upper boundary).

Despite the ups and downs in the market that is inherent to it, and where opportunities lie, investing in the stock market remains to be one of the most recommended investment options by financial advisors and personal finance advocates, may it be direct investing (to those who have more advanced knowledge about long-term investing and trading) or indirect investing via managed funds linked to the stock market.

February has come and gone. Just like that! 10 months to go in 2019, 10 months to grow our wealth, hopefully with the help of the stock market. Sharing with you below some market outlook reports I got from COL Financial (and Truly Rich Club) and BPI Asset Management. Do not take this as an investment advice to buy stocks now na but please do take this as an advice to study the stock market and be sure you have investments in the stock market, for the long-term. 🙂


COL says “Don’t be Afraid of Market Weakness.”

Why did COL Financial say that?

  • Fundamental factors that triggered the January recovery remain in play
  • Improving and more stable inflation vs last year
  • 2019 national budget passed so government can resume Build Build Build
  • Foreign funds flowed back to emerging markets such as PH since US is more behaved now in terms of interest rates (no more rate increase for now)
  • Reasonable valuations of stocks at current prices

Below are the recommendations from COL Financial as of Feb 2019. Caveat emptor.

From COL FInancial

Additional Notes from Truly Rich Club

TRC also shared their stock market outlook, in a more newbie-friendly and less technical manner, though they also rely on COL Financial for the actual analysis. So on top of the notes above, here are some more:

  • Peak of inflation is good since it may mean BSP will no longer hike its rates (see related article here) and they might cut reserve requirements so banks will have more money to lend to encourage economic activity and growth
  • Better inflation means better consumer confidence so people will be on a spending mood (but don’t forget to save okay?!?!)
  • Slow down in global economic growth means lower oil prices and foreign funds going back to emerging markets such as the Philippines
  • PSEi upside is capped at 8600-levels because of “twin deficits” — budget deficit and current account deficit (more dollars going out than coming in). We are buying more goods in USD as we are importing more, for commodities as well as for Build Build Build
  • Government spending might slow down which might affect economic growth due to election ban (but private spending usually goes up due to elections as candidates spend more and “give more money” to businesses and voters (either legal or not) 🙂
  • Bank lending rates remain high from last year despite no increase yet this year
  • Are OFW remittances starting to peak now?

Global Market Outlook

As follows are some notes from the Huddle Room of BPI Asset Management.

  • 2018 recap
    • Pace of global economic expansion is slowing — still growing but at lower growth rate, believed to be a typical cyclical slowdown
    • Weak global markets especially in 4Q18
    • Market sell-off driven by geopolitical uncertainty rather than a deterioration in fundamentals (e.g. US govt shutdown, China slowdown, trade wars, Fed rate hikes)
    • Need to focus on fundamentals as global growth remains solid
  • Growth Outlook
    • US equities are relatively more expensive than other markets
    • There are are opportunities in emerging markets, valuations are supportive
    • Improvements expected in 2019 but volatility may continue
    • Equities remain an attractive asset class
  • Investment Reminders

I agree that the stock market is one of the most effective ways to achieve significant wealth growth, if done properly. Which means you have to know what you’re doing. Set aside time to study it. Most losses (and gains) in the stock market that you hear about on social media are from stocks trading but this needs proper timing, skills, psychological edge, research, and hard work. If you’re not the type who wants to be a trader, then long-term investing in managed funds can be your way to have the stock market grow your wealth.

How about other investment vehicles? What if I don’t want to risk my money in stocks, how do I build wealth and attain financial freedom someday?

Well, I got you covered. Discussed other investment options and showed why WISER PINOY = RICHER PINOY in the #10Steps to a Richer Life ebook. Download your copy now by clicking this link.

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2 Responses

  1. Francis says:

    Thanks for the informative update sir. Agree that stocks and mutual funds are excellent places to invest, especially for long term goals. I didn’t add to my index funds in Jan and Feb, but I might start adding in March!

    • Admin says:

      Considering to add too for my index tracking funds especially since the last 2 days have been down more than 1%. Just really need the patience and discipline. Been doing this for 7 years now.

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