Do We Have to Get Rich?

Sept 1, 2007

We should get RICH

I don’t know how the dictionary defines the word. But for most of us, this is something relative. Meaning, when one has more compared to others, he is rich. Can I use the analogy of the pie?

Now imagine the pie as wealth. And we all have to share it. If one gets much much more than the others (say 5 slices out of 10, and he isn’t sharing anything) and five more people would have to share the rest (maybe one would end up with nothing), then the problem begins. This is the unequal distribution of wealth.

Now, what’s the reason why one would end up with a lot? For most of us, we'd think we've been cheated on. But maybe it just so happened that he’s got the more appetite, or means. It’s true that supposedly, we should get an equal share, a pie for each person,but then again, this is the problem with democracy, freedom gets abused. And more importantly, I’m sorry to say, this is but man's natural tendency. And only a few can resist. Personally, it’s difficult to change reality. Ok, I know, it begins by a change in one’s self, but the above isn’t something that can be done overnight. I don’t have a lifetime.

If you (good-hearted people) can take more pie to give to those who doesn’t have the means, why not. Instead of greedy people getting their hands on them.

Or, if only we have the same appetite for wealth, it is likely that we’ll end up with an equal share.

Personally, I choose the second option. So, kainan na (lol)!

P.S. nakaka-addict pala dito, I think, stop muna kasi di ako makapagtrabaho.

Can You Live On Investing Alone?

August 31, 20o7

Funny, but this was my original plan, until I got first hand experience if I only had my investments to depend on.

IF you, are referring to these investments, bonds, equities, stocks, even real state, and NOT your OWN businesses, then it’s not enough. Before these can give you enough yield, you must have a huge capital.

Let’s say, you have a huge sum. Investments differ in yield. Lets just say, your 600T in UITF can earn from 0-30T or more depending on the stock market. Losing is always there.

Investment is risky. Again it’s common knowledge. However, the riskier the higher the interest is. I myself experience losing some 75% of my money in a scam (I didn’t know it was legal, and I was ignorant then ). Well, even if I know better now, I still experience losses.

And viewing it in another perspective, people who retire young have the tendency to live a sedentary lifestyle. Have you ever wondered, why farmers live longer than some executives? This is kinda off-topic but people often forget to consider the benefit we get from being engaged in work. Example, your walk to the office every morning, and back to your home may give ou the 30-minute exercise you need. Work hard or less (depends on your preference, but definitely don’t stop working) AND work smart, that, is better.

Therapeutic Communication

The current financial crisis and many other issues that the United States is facing right now is bringing a lot of stress in the global market, not to mention in man of our countrymen's psyche. I'm not referring to myself because that's already given. But to my friend's.

Like many aspiriang Flipinos trying to look for a greener pasteur, she is bound to the land of the free, until, the market crashes. Uhhmm, wait, I think it's even before the collapase (hehe, I'm mixing things up lately, thanks to Pinoymoneytalk). Well, I really don't know the reason of the retrogression but I'm pretty sure it's as complicated as the charts right now.

But that is beside the point. Or not completely, because it is related. Given that I made that as an introduction. Hhhmmm...

Anyway as she succumbs to hopelessness, having waited for 2 years already for the immigrant visa, she tried to find solace in me. I mean, in somebody that is as in despair as her? How can she possibly get a good advice? Hahaha! Or at least a therapeutic response. Well, in the first place she has no idea of my current state of mind, as I've always maintained an air of hope, confidence, optimisim, intelligence and beauty. And she doesn't know that, too. So much for being friends. Besides, I don't think anybody can tell the difference, though.

As I try to come up with something to say, that would appear as caring as it is sound, not to mention, therapeutic, in a situation where the answer is as uncertain as the current market, I came up with several options.

"Everythung has its reasons"

"Maybe there is something better in store for you"

Making me realize fast, (as fast as I thought of them) that they're the exact same phrases I am trying to avoid. It's tantamoung to lying!

In the end, I ended up...dead. Hehe...I mean laughing. For my friend, it is mocking.

We didn't end up in a fight thoug, as much as I'd like to. Just close. As I'm quick in explaining the comic I've imagined. Though, she didn't share the laugh, and I felt a little guilty.

In the end I said, "I understand"

Realizing what could be more therapeutic than that

Ah, keep my mouuth shut.

The 3 Most Stable Banks in the Philippines: Which Bank do you Use?

December 12, 2008

Buhay ko na naman?

Quote on Dec 12, 2008, 12:15 PM

"one way to maximize earnings, don't believe in rumors."

That’s true, if unsubstantiated. But as we have realized (again and again), it’s quite difficult to find facts. Unless of course, we work for them. But are we allowed (if not willing) to share these data? Yes, kung ayaw na nating mabuhay. Hehe.

Just don’t discount the harsh reality that WHEN THERE IS SMOKE THERE IS FIRE (tama ka boss S). I should know, because I’ve been scammed, twice (yes, TWICE).

And like many others I CHOSE to believe what I THOUGHT, and HOPED (not to mention FED) refusing to SEE the OTHER SIDE. Because I thought, the RUMORS were just BAD PUBLICITY. PERO, sino ba namang may-ari ang aamin? But I could have gotten out earlier, much more, prevented it. There were just too many investors getting in, and they were offering too high an interest. In my ignorance and greed back then, I didn’t bother to examine myself HOW could it be even possible?

I fought back the anxiety, and fear. In fact, I even deposited another 60K A WEEK before the official statement of CLOSURE!

Rather look for the source, and see how big or small it is. Wether it can be ABATED (in the short or long run, depending on your time horizon) or it is time to RUN.

So, take coverage, DON’T BE LURED BY THE FAT INTEREST ALONE. Better yet, CHOOSE WELL. Dun sa di ka masusunog at MALINIS na paraan. Para masunog ka man, sa heaven ka mapupunta. Joke lang.

Quote on Dec 12, 2008, 11:58 AM

"i stumbled upon this forum upon hearing rumors that BPI might close... again, rumor lang... pero for peace of mind, do you think these 3 big banks will have any problems in the immediate future?"

For your question, well, I don’t think anybody could give you a direct answer. Unless of course there’s a board member here from those 3 banks. Or better their accountant. In that case, for any conclusion we may come up from inputs here, IS but PARTLY SPECULATED.

I’ve said before that profitability and reduced risk (high liquidity, low credit and interest risk) is what defines a bank stability (in my opinion). Unfortunately unless we are an “insider” we won’t have access to full transparency. Let’s just comfort ourselves with the figures thatBoss S provided in the first post. If your bank isn’t there, it just means that they fall below the figures, RELATIVELY, and not because they’re unstable.

In times like this, the most important is liquidity. As much as we’d hope to put calm in all investors, there’ll still be a significant number who will withdraw their money, like it or not. If that’s what will give you peace of mind, then SO BE IT. Just hire a security guard. If the bank has indeed managed the business well – enough capital, tight risk-management, good policies - should MOST of its investors decide to take out their money, then this SHOULD not be ALL the reason to CLOSE the bank. And don't expect high interest.

I’d hate to compare commercial vs rural because in the first place they are two separate entities. Besides we all have our own reasons for getting in one and not on the other.

For your peace of mind (and mine, too), let me ask you a question. During times like this, in which bank will you feel most safe to park your money in?

If you say under your mattress, then I don’t think, there should be any conflict?

Oh, by the way, pwede tayong makilagay sa kaha de yero ng mayayaman. They are called banks. Hehe.

And do you know, that HUMOR is one of the BEST defense mechanism?


And that verbalization will help relieve anxiety.

Pre-Need Firms Collapse

Dec 11, 2008

I am trying not to say this, well because obviously because of the financial turmoil, most if not everybody is overly sensitive, and you may take offense on anything that is against your conviction. Not trying to affront anybody, though, because I myself has been struck by the realization. I know, everyone knows this, and what I’m about to say, let’s just say is but the UNSPOKEN.

I noticed that the only thing investors care about is but the INTEREST. But of course! And what else is there to be concerned about, except money, ANYWAY? I mean, I would not be a hypocrite to deny the temptation of investing into something that would BEAT inflation, not to mention my OWN SALARY! Why care about looking into its assets and liabilities, its managements, and policies, when I am getting some 20% per annum, effortlessly, given of course as it is PDIC COVERED? Afterall, they say, it’s CONFIDENTIAL?

And yet, we wonder, how come, some people would always seem to succeed at least financially? For all you know, he is swindling YOUR money.

Why politicians, and regulators are corrupt? Innate evilness PLUS giving in to temptation of accepting BRIBES for permits, cover-ups, etc. And yet we wonder how come their assets balloon disproportionately as against a meager 25T (or less) monthly salary. For all we know, we are partly (if not entirely) to blame.

And how come terorrists always seem to have an endless provision of fund? Now, I maybe being paranoid here. Baka naman, passive income lang talaga.

These are just examples of financing that for all we know are marked “classified”.

I’ve said it before that I’m not into rural banks. Not because I see it as some type of scam. But rather as a riskier investment, relative to commercial banks. But because I’ve realized that after putting most of my money into high risk vehicles such as MF, UITF and individual stocks, I couldn’t afford to gamble anymore.

My point, investing (in all forms) is a social responsibility, too. Safeguarding our principal and interest is not the only reason for being vigilant when it comes to choosing the right company, not to mention monitoring our gains or losses.

I mean, it’s okay if you don’t want to think of anything else but your money, just don’t complain about corrupt officials, scams, and world war III.

Not to mention, blame the agents?! In the first place who decided to invest, anyway?

Is this a good year to invest in Rural Banks?

December 11, 2oo8

Let’s see:

An optimist would say: YES!
A pessimist: NO!
A conservative: MAYBE...IF...

Is 2009 a good time to invest in rural banks. I say IT’S THE BEST TIME TO SPEND!

A healthy/growing economy equals investment growth (and consistent if not increasing interest, yey!!!). Because an expanding economy generates more jobs, goods and services and incomes as opposed to contraction. And what would lead to economic growth? Increasing demand for goods and services coupled with swelling income hence the increasing propensity to both spend and save (which they put in investments - banks, stock market – that are used by businesses/IPOs as loans/capital ).

As you can see, without the demand, businesses won’t have the need to expand, much less be created at all.

Clearly we are in a state of economic contraction (let’s not detail the reason anymore). Layoffs lead to decreasing income. The absence thereof or decreasing sense of security (by those with jobs but anxious), lead to decreasing ability to spend/consume goods/services, to decreasing savings and investment (and interest).

So when does contraction/recession ends?

When demand is rekindled.

Consumers will reach a point where we simply have to increase spending. Gulagulanit na ang damit mo. Pudpod na tsinelas (kasi ipinalit mo na sa sapatos kasi mas mura). Wala ng garter ang ... shorts mo. Hehe. Sumabog na ang gas stove mo. Ano pa ba? Ah, bulok na ngipin mo! In short, NAAWA KA NA SA SARILI AT PAMILYA MO.

Thanks to government intervention though. We don’t need to suffer long (and hard? hopefully). Because they are the ones which will come up with policies to help increase demand. Like infrastructure projects, decrease interest rate, borrow money from international institutions (didn’t we just did?!). Let’s just disregard for a second the new opportunity for corruption.

So is next year the best time to invest in rural banks or in other investment vehicles for that matter?

I honestly don’t know. Hehe. Yes, sa dinami dami ng sinabi ko. Whatever your decision, always factor in your risk tolerance.

All I can say, that now and the near future is the best time that we invest in:

-OURSELVES /CAREER– to keep our job, and hence our income, and our lifestyle
-KNOWLEDGE – to increase our confidence, not to mention restore the health of our portfolio

and

-PSYCHIATRIST – to maintain our sanity (joke lang po)

Top Local Commercial Bank Will File for Bankruptcy?

Dec 10, 2008

So, pinaguusapan pa rin natin buhay ko dito. Hehe.

Ironically, when we say let’s not speculate, that’s when we speculate. So might as well, speculate na lang such that we won’t be disappointed should the worse happen which should have been possibly foreseen by speculation, ironically. Hehe. Afterall, when there is heat there is fire. Para yang pag sinabihan ka ng “wag kang mabibigla”, nabigla ka na! Sarado na. Hehe. Joke lang po.

When a bank is failing, the general public will not know about it, in case you haven’t realized it yet. Because regulators DELIBERATELY keep a pending closure a secret to avoid the public from simultaneously getting their money out (or a bank run), to keep other options possible. Like the bank’s sale to another institution (say, Merrill Lynch to Bank of America) to avoid anymore government intervention (which is far more stressful) and bring back the confidence of the public or afford enough liquidity without the bank having to file for bankruptcy. Because, should all the depositors rush out of its door, I don’t think any buyer would want to take the deal anyway.

For many customers, the first time they know their bank has been shut down, it is when they walk to their branch and notice it’s closed. Or has read it in PMT. Hehe.

The problem with speculation is we tend to predict the future by looking at the past. Though we know, that past performance is not a predictor of the future, I think past data is far better off than a crystal ball. Thus, it is understandable.


However, let’s not forget that the 1930’s bank failure is both a cause and an effect of the economic crisis started off by the stock market crash. In addition to the collapse of confidence, reduction of money supply, high interest rates and reduced business investment. Their exact roles and relative importance in the debacle is what economists are disagreeing about.

Deja vu? Not quite. Our leaders and economists has put safeguards in place to avoid a repetition. They put social safety net in the form of unemployment insurance (or a paper bag given to our poor OFWs from Taiwan), Philhealth/Medicare, more active government role in economic policy, better regulation of the securities market, insurance of bank deposits, etc. . So if you ask me, not so similar with the Great Depression after all. Baka pwede pa Greater Depression. Hehe.

In the subject of banks – the combination of government oversight, competitive pressures, and improved risk - management has massively reduced the chances of large-scale bank failures. Bank failure happen in smaller institutions. Possibly because of a relatively reduced stability. Given their smaller capital, hence reduced liquidity not to mention higher interest rate.


In times, like this, when people are in panic, increased liquidity plays the utmost importance in keeping the bank steady. Fear and doubt is what will drive their depositors to withdraw every single penny. When a bank doesn’t have enough cash (because they are given out as loans), it will lead to a vicious cycle of more withdrawals, eventually running the bank out of capital to continue operation. But should there be enough liquidity, the bank can still carry on and eventually recover. And you get all you money back, plus interest.

Not sure though if it’s safe to assume that bigger commercial banks have higher liquidity compared to smaller rural banks. Well, relatively, I’d gamble with a yes.

To continue, it’s not just undercapitalization or a bank run that will cause a bank to fold. For all you know, the reason your bank closes is because of an increasing liabilities vs assets, or regulators have recognized fraud.


Yes, you are right that, now, nobody and nothing is invincible. But I’m definite some banks (and hopefully everybody) will turn out to be indestructible in the end. E san na natin ilalagay ang ating pera. Seriously? Hehe.


Clue, we are an emerging economy. Just as wealth is unequally distributed. So is the risk.

3 Most Stable Banks, How can they go wrong?

Dec 5, 2008
By making bad decisions.

But I agree with you. Relatively they're far more stable than other banks, well as far as I know and “kutob” are concerned (take note, as far – which may not far at all, hehe) and as far as your first post is concerned. I will presume of course, that the other banks are not included because they’d pale in comparison in terms of financial standing in general which makes them less stable. Logical.

I recognize the fact that “ALL” investment involves a certain degree of risk. No exception. And that the more stable an institution is, the lesser the risk. But how do we gauge stability? For humans, a good insight, for banking institutions – I have no idea. Hehe.

Let us just say, in my opinion, stability should equate with:

• profitability (positive net income)
• and reduced risk in terms of:
-liquidity (they must have sufficient cash available should the general public decide to withdraw all their funds)
-credit risk (they must make sure that their borrowers will be able to repay the loans made)
-interest rate risk (the bank must be have enough revenues in order to pay the interest that it owes to its depositors)

As to how you would compute the above, sorry not so much of an idea. But I’m sure, the total assets, deposits, loans, income, capitalization, etc. are variables to the equations. Include mo pa diyan management.

Let’s just say, we may come up with an idea on their standing and hence solidness by looking at the numbers. The higher the better? But as to a firm insight on their stability, malabo.

Afterall sila lang me alam sa totoong assets and liabilities. Especially, their accountants. Hehe.
______________________________________________________________________

Dapat talaga sinunod ko payo ng nanay ko. Mag-CPA daw ako. Tsk, tsk.

Top Commercial Bank Will File for Bankruptcy?

Dec 4, 2008

With regards to being prepared or not, well we all know that everything has a risk. But of course compared to other investment forms, we know that banking so far is the safest haven, at least relatively. And commercial bank more than rural since the former is more stable, again relatively. (safest? - well, we could opt to put our money under our mattresses, but is it really an alternative, seriously?)

Since we are trying to point out if this is a hoax or a truth (first we must come up with the name) or at the most, predict what might be possible by comparing it to the fate of some known firms that have gone bankrupt like Lehman brothers and AIG, we must also acknowledge the difference among them.

Well, I’m not really an expert because my profession is FAAAAR from banking and finance or accounting (in fact it’s the opposite, as I think it’s more of a charity!), but I will try to contribute. Sana tama ang karamihan sa sasabihin ko.

Commercial banks are different from Investment banks. And Lehman Brothers, AIG, Bear Sterns, Washington Mutual, etc etc. fall under the latter.

Commercial banks are engaged in raising funds, though deposits (TD, savings) from corporations to individuals which they try to profit from by loaning this to businesses and consumers in place of a collateral or a lien to the title of the house if it’s a housing loan (which secures them by the way, should the borrower fails to default on the loan), or buy corporate and government bonds. In terms of mortgage loan, they either directly provide the loan – if you get approved, given a tight lending policy - or acquire these mortgages from simply purchasing it from mortgage bankers or institutions.

Investment banks on the other hand, profit from companies, governments and individuals investors by issuing and selling securities in the capital markets (equities and bonds), as well as offering advisory services for mergers and acquisition or trading for clients and underwriting securities.

In the past years however, investment banks have expanded on providing financial services such as a mortgage loan. In the case of the subprime crisis, they provided such loans to people with poor credit rating (or those who are likely to default payment, when hindsight should be 20/20? )-which I don’t think would be given by commercial banks, by the way - made a security out of these loans then sold them to investors. With subprime foreclosures, come a vicious cycle of increasing debt, loss of confidence, withdrawals of investment, eventually bankruptcy.

Not really sure about Philippine laws that govern the activities of these two types of banks. But in other countries, it is ruled that commercial banks should be engaged only in banking activities and investment banks with investment activities. But it is not necessary that they should be a separate company. That is the reason why commercials banks have their investment divisions.

My point, just because investment banks are deteriorating one after the other, commercial banks will ultimately follow. I mean, given the conservativeness of the latter in terms of revenue sources, not to mention the nature of their business, reasons for bankruptcy may fall under a different category, and not entirely because of the subprime mortgage crisis, unless of course they go beyond the confines of their industry.

But of course, like many other businesses, commercial banks may fall – poor macroeconmonic conditions, poor management, poor accounting – which all boils down to making bad decisions. In the case of risky investment, too much exposure than they can handle.

You are right, a risk no matter how small it is, is still a risk. Thus we must take coverage.

But getting unduly anxious over something we don’t understand is a different thing.

So to those who are more knowledgeable about banking, please enlighten us more.

Is a House a Liability or an Asset?

Nov, 26, 2o08

If we are going to be strict about the definition of liability as "something that takes money out of your pocket every month, wether you work or not", then life itself would be a liability.

But then again, if asset is, "something that puts money into your pocket each month, regardless if you work or not", life can only be an asset if you work or you make money from your mere “existence” (ansarap nun!). Otherwise, you are worthless. Papayag ba kayo?

Unfortunately, life is not the issue here, otherwise, I think I've settled the score already. Hehe. I'ts the house that we are trying to qualify as an asset or a liability.

Now the reason, I'm giving the above analogy for, is to support what neo just said. It doesn't mean that just because we are spending some money for owning a house, it becomes an accountability.

Besides, when we talk about income, it is the “net” proceeds that matters more. Clearly having your own house increases net returns as it decreases expenditure compared to renting an apartment. Unless of course, you prefer to stay in the streets.

“Revenues and expenses” will always be part of any aspect of life, literally and figuratively. Unless of course we return to prehistoric times. When everything (I think) is neither an asset nor a liability.

Or a liability! Try living during those times.

Will the Philippine Stock Market Be Dissolved?

Nov 15, 2008

As far as I know (which by the way, can’t take us that far), the answer to your question lies in understanding what is the stock market and its history. So that would explain the long answer.

Simply put, it dates back to a time when man realizes that a way to raise funds without creating debt (through bank loans) to expand business is to sell stocks or partial ownership of the company in an agreement to divide the company’s profit to whoever buys the shares through dividends. So what our ancestors did, was to put up an organization (stock exchange) to bring the buyers and sellers to a listing of stocks and securities where trade can occur.

But that’s not the only way by which we can profit through the stock market. Man being man (smart but greedy), soon realizes, that profits could be made by re-selling the stock to a much higher price to others who saw value in a company. In short, a share is sold to a much higher price that is partly (if not purely) speculated on as it is based on partly (if not purely) predicting the company’s future revenues. The role of speculation itself explains the volatility of the share prices as shareholders may hold different views over the company’s future earnings.

Now, partly because of economic factors (that lead to companies closing down) and partly to fear and panic, share prices may experience a sharp dip (including those other companies who are fundamentally sound, as again, anxiety is one of the market’s driving factors). This is what we call a stock market crash. The possibility of some share prices as being undervalued is there during a crash.

So, in short, a crash is different from dissolution, in as much as the latter is different from re-organization and reinvention. IN AS MUCH AS a stock market dissolution is different from individual company’s liquidation. When you buy shares in a company, they have the obligation of paying you dividends, that is as long they are making profit (except of course when it's making negative revenues or stops operation). Concurrent closures of these listed companies is rather impossible, if not ridiculous.

Unless of course, it’s the end of the world.

A Matter of Perspective II

Nov 13, 2008

Sabi nga nila, the only time politicians tell the truth is when they call each other liars (Hehe, sorry, can’t think of a better analogy).

No, the answer to that is because investing/saving is a personal issue and responsibility. For any loss or gain, we are the only one accountable.

Rather hard (and pointless) if everybody agrees on something about money because there are always 2 sides to the coin. Not to mention, economics is the only field by which two people can share a nobel prize for saying opposing things. But of course, arguments need to be laid out properly. If inaptly put, see beyond the drama. There’s more to it (sana) trust me. We listen, and examine who is more sensible. But as is always the case, everybody will have a point. The decision is ours to make.

Don’t worry, if there’s something we are in total agreement, yun ang YUMAMAN!

A Matter of Perspective

Nov 10, 2008

When our ideas are put to the test, it is hard to be receptive . Moreso if it is our pride. And that is the truth.

With forums like this, we get to meet a lot of people who has different intentions, opinions, personalities, not to mention sense of humor. The problem is we only get to read the message. Believe it or not, it is easier to get the idea across in a conversation. I think because, the emoticon is not enough. Hehe. Or probably because in person, we can assault the other instead.

In as much as it is important to think what we’re going to post, it is equally imperative to consider how others would take it. If we have to think twice before posting, we also have to think as much (if not more) while reading others’ messages.

It’s hard you see, given the complexity of man, to decode each other’s persona, moreso in a forum where we are defined only by some of our thoughts. And I think you can’t fault some people on how they put up their message in as much as they can’t fault us in how we would respond.

The best thing would be to try our best to keep an open mind. Trust me, it takes a lot of effort. It’s hard to be opposed. But it’s harder to accept defeat. (and I admit my guilt, hehe)

Sabi nga nila, pag binato ka ng bato, batuhin mo ng tinapay. Easier said than done. Hehe. But then in forums, it would always boil down to the matter of perspective. Malay mo tinapay pala iyong binato.

Investing in Mutual Funds

Is it wise to invest while still in debt?
Nov 7, 2008

One, I think it's not wise to save and invest when you are still in debt. I think it's more prudent if you clear yourself off of any liability first. Baka kasi yung interest ng investment mo e katumbas lang ng interest ng utang mo, nagwoworry ka pa. Or worse, mas mababa pa ang interest ng investment mo, nadagdagan pa utang mo.

Second, again it’s more sensible to have some bank savings that would cover at least a few months of your needs. Just in case you lose your job hehe. Besides a bank account is a form of investment, easily accessible (in case of immediate money need), low risk with a predictable return. This should form the foundation of your money-making strategy. But if your question is if you can buy shares from banks offering MFs or UITFs even if you don't have an account with them yet, the answer is yes (at least with some banks, not really sure though, just ask). But better if you have, so you can buy and redeem by simply transfering funds from and to your account.

Third, aside from checking and savings account, there are other forms of investment products, such as what you mentioned – bonds, balanced funds, stocks, real estate etc. But before you go into that, do 1 and 2 first. Then read (books, this forum) to learn more about these other products while doing just that.

I understand the excitement. But don't succumb to it just yet. It's not as easy as you think it is.
It's never too late. As to why financial literacy not included in curriculum, well, personally because I think there are other important things to learn aside from money matters. Not to mention, the latter would need some discipline and a lot of maturity.

How Much Have you Lost in this Bear Market?

Nov 1, 2o08

Manipulation in the Stock Market

Whooaah! I was planning to just check out this forum, before I go to bed. Just didn’t realize that it would make me awake for another couple of hours!

Much has been said. And more is bound to be thrown at each other’s face. But let’s try to be nice, and civil, and...nice. For whatever difference in conviction, let’s just account that to difference in perspective. Or generation gap. Hehe. The latter by the way is figurative.

Now, that manipulation thing, we have to admit, could be part of the stock market. And what just have been pointed out in another thread, it even exists in the international scene. I guess, it really is part of any money-making scheme. Let’s just leave some benefit of the doubt. Afterall, the presence of intention is something that’s difficult to prove.

But I don’t think it would be reason enough to stop trading in the PSE. But the grounds as to why ordinary investors like us need to understand the dynamics and commit to a strategy that again, would best suit our goals and psyche. And okay, values.

In fact, investors are partly to blame. Most (if not all) regard stocks only as a trading vehicle. The reason they gain or lose is because they take advantage of the volatility (especially true for those who trade for the short term). Which is by the way dictated by man’s reaction to market volume (okay, manipulated or not). Dicounting in toto, the intrinsic value. But can we really do something about this? Besides, most of the conflicts we are talking about here, is but man’s innate nature, unfortunately.

Funny, but the previous post, I was planning to edit. Dapat pala ginawa ko na. Kasi I was about to change it into:

But in the end, each one of us will realize, that it’s actually a matter of perspective (not to mention plan). For some, a lost opportunity is as good as money loss. For me, actualizing a loss by redeeming it, is. For some, this is the end, for others this is the beginning.

But which provides us the best ground to present all our arguments. And all the reason to kill one another. Hahahaha!

How Much Have you Lost in this Bear Market?

Oct. 31, 2008

Why do local Investors use the US as bases when investing in MFs?

You have a point richpulubi, as you’ve always have.

As for the reason, why our stock market doesn’t mimic that of the US, is simply because we are not America (I mean, we all know what they have that we don’t).

As to why local investors use the US as basis when investing in MFs? That’s exactly my question before which unfortunately I haven’t resolved completely. Until finally I just learned to accept the fact that Filipinos are not confident with their own market or probably their own economy (which is understandable by the way) that they use the stock index of powerful nations as a tool in telling when to buy or sell (which is good actually because the movement becomes a little predictable since they are a few hours ahead of us (in reality, we are the ones a few hours earlier, which makes it all the more ironic), all you need is to stay a little late at night, tune in to BBC or CNBC and give up watching some of your telenovelas . This is the reason why peso cost-averaging, index fund investing would work. Besides, it’s the same human reaction that underlies every stock market (not to mention that they are interconnected)

Relatively yes, the upsloping of the US stock index is steeper (rather most steep) than the PSEi. Of course it will be sarcastic of me if I’d say comparing it to 50 years ago, the PSEi has gone markedly up. We’ll just have to accept the fact, that if we use the same time-frame to measure our stock market against that of the US, then you are right. And yes, there is that possibility that the PSEi may not reach that summit again (let's just discount that it is possible though, hehe )

But then PSEi need not reach a peak in order to profit in individual stocks and in order for NAVPUS to climb in MFs, given, that your portfolio is well diversified (the very reason why I put most of my money in MFs aside from not having to worry about stop loss, exit gain, but which leads me to think that I should be putting this in the other thread), and you have cost-averaged.

And long term is not forever. Just some 100 years, hehe. It’s a hedge against the volatility of the market. But then again use fundamentals but do not forget the technicals. And watch TV.

As for buying now when all are in a low to offset the losses you incurred when stocks are in its record high, that is cost-averaging. Redeeming now is not the answer, but buying now is (at least for me).

And yes, if you leave your money in the stock market, and simply wait for it to go up again, without doing anything at all, it will not even guarantee the return of your capital. That will not even pass as a strategy! In that case, redeem everything and do not invest at all.

But in the end, each one of us will realize, that it’s actually a matter of perspective (not to mention plan). For some, a lost opportunity is as good as money loss. For me, actualizing a loss by redeeming it, is. For some, this is the end, for others this is the beginning.

But which provides us the best ground to present all our arguments.