How can you grow your wealth, by investing or by entrepreneurship? Can you be both? Learn from the Wealth Coach, Mr. Chinkee Tan on how to grow and invest through entrepreneurship at the iCOn 2013: The No Nonsense Investments Conference this June 22, 2013 at the SMX.
Chinkee Tan is one of the most sought after speakers and coaches in the arena of growing your wealth. He is a best-selling author, award-winning radio show host and a true mentor to thousands of Filipinos including me.
So honored and blessed to be featuring a guest blogger whom I respect and admire so much. Efren and I have been friends for quite some time now and he remains to be a role model to me and many ways. More than a colleague, Efren is a great mentor. More than an investment expert, Efren is a genuine advocate who practices more than what he preaches.
In this installment, Efren puts some wisdom on stock market investing. With so much attention and curiosity in stock investing, Efren’s wisdom is so timely and his balanced view is something that he is really known for — I take his insights and advise very seriously.
Efren will be featured in iCon 2013: The No Nonsense Investments Conference this June 22, 2013 at the SMX. He will tackle the very important topic of investment planning. Check out the conference HERE
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Some Commandments in Stock Investing
by Efren Ll. Cruz, RFP
Question:Are there any rulesthat I should strictly follow in stock investing?– via email
Answer:To be sure, there are many rules to follow. But here are some that immediately come to mind.
1) Do not make money a graven image. Money has always been and will always be just one of the tools to achieve the more important things in life. The same goes for stock investing. Don’t get me wrong though. Money and stock investing are important tools. Just don’t let your life revolve around them as if they were the reasons for being. And when you make money, don’t forget to whom the glory belongs.
2) Forget about buying at the bottom and selling at the peak. Your chances of buying at the lowest point and selling at the highest level is as slim as winning the 6/55 lotto (about one in nearly 29 million). Why? Because you will only know that a particular price is either the lowest or the highest after the fact. Worse, you may not have even placed your order before then.
3) You beta watch out, you beta not cry. Stock prices tend to move together. It’s just that some move faster than others. A way to measure this relative movement is to measure a stock’s beta. Usually, a stock’s beta is measured against a broad market indicator like the Philippine Stock Exchange Composite Index or PSEi. Operationally, if a stock’s beta is 1.5, and the PSEi made a 2% return, that stock should make a 3% (i.e. 1.5 x 2%) return.
A higher beta would mean a stock with a more volatile and, therefore more risky behavior vis-à-vis the PSEi. This is not to say that stocks with high betas should be totally avoided. You just need to match your risk tolerance with that of the stock you are buying. In other words, buy with eyes wide open. You don’t need to perform the computations for deriving beta as you can simply ask for them from your stock broker.
4) Investment decisions have manufactured and best before dates. Do not cry over spilled milk as they say. If you are truly diligent in studying your options before investing, you would always make the best decisions given the information available to you at the time. However, the only thing that is constant in life is change itself. Your investment decisions will have a shelf life as many factors can change with the underlying companies you bought. So make it a habit to review your investments periodically. Once a quarter should be good enough.
5) Do not covet your neighbor’s allocation. Even if someone comes up to you to brag about the tons of money he made from a certain investment allocation,that is his allocation and not yours. You will need to come up with your own according to your own return objectives and risk preference. How else will you be able to tell your own story?
6) Do not get too excited with breaking news. Stock investing is manic-depressive. Keep your cool when you come across exciting news. In the first place, if it wereexciting news about a certain stock, it would already be a time to sell that stock and not to buy it. You are supposed to buy before the news breaks. More importantly, it is the long-term earnings and growth prospects of the underlying companies you boughtthat you should focus on.
There are much more stock investing commandments to write about. But the foregoing should give you enough to chew on for a while.
Thanks to Randell for allowing me to post this guest blog. More power to you my dear friend.
Efren Ll. Cruz is a Registered Financial Planner of RFP Philippines, personal finance coach, seasoned investment adviser and bestselling author. Questions about the article may be sent by SMS to 0917-505-0709 or emailed to efren@personalfinance.ph.
Copyright 2013 Efren Ll. Cruz, RFP. All rights reserved. This material should not be published, broadcast, rewritten or redistributed without the express written of the author.
OFWs and financial education, the die has been cast
By Randell Tiongson on April 7th, 2013
Fresh from conducting a total of 8 talks in my 11 day sojourn in the UAE, Oman and Qatar recently, I came home with fresh perspective of how our dear heroes are doing abroad. I gave a total of 5 talks in Dubai (UAE), 1 in Muscat (Oman) and 2 in Doha (Qatar) with a total estimate of about 1000 to 1200 OFWs in attendance. The talks were varied but all had a central theme which was money.
I got involved with the financial advocacy for OFWs in 2004 when the late Ka Tonyang Binsol, an OFW in Japan asked for my help to organize finance talks for OFWs who are back home for a visit. We were able to run successful talks which ignited my burning passion to promote financial education for the Pinoys. Sadly, my friend Ka Tonyang (loved by many, me included) passed away which temporarily put a stop on my outreach for the OFWs. Despite my absence in the advocacy for OFWs, I transferred my focus to pushing financial literacy to the Pinoys in general – something I have been doing and will be doing for a long time, but my desire for the OFWs remains.
5 years after meeting Ka Tonyang, I was blessed to be introduced to another OFW advocate, someone who has been a staunch supporter of our dear heroes – Ms. Susan “Toots” Ople. Toots, along with his partner Fort Jose of the Blas F. Ople Policy Center (BFO) asked me if I am interested in teaching OFWs about finances and I was so ecstatic to be given the opportunity to do so; the start of a wonderful partnership. In the same year, I was invited by Ms. Ople for a couple of speaking engagements in Hong Kong and other locations to reach out to the many OFWs who can benefit much from financial education. From then on, my passion to reach out to the OFWs has been rekindled and burning and I am blessed to be able to interact with many other advocates.
I have been blessed to speak and teach in 7 nations already namely Hong Kong, Singapore, Macau, Israel, United Arab Emirates, Oman and Qatar and there are arrangements being made for Saudi Arabia and Japan for this year. I am leaving again for Singapore to run programs and this year will be my fourth consecutive year speaking and teaching in Singapore. If plans go well, I may find myself in the Middle East again before the year is over – something I am very thankful to the Lord for.
Being an advocate to OFWs and the Pinoys in general is not an easy task – just ask the many other advocates. There are many hurdles but the biggest stumbling blocks would be
our behaviour and mindsets when it comes to personal finance. Our culture is a unique one and proper but basic money principles don’t seem to be ingrained in it, unfortunately. The OFWs are placed in a peculiar situation where they are earning much more than their counterparts at home and yet the financial strains they experience are just as disheartening. There continues to be problems with savings and worse, issues of debt. In my trip to Dubai, a lot of people were telling me of debt woes of the OFWs and many of them actually end up in jail because of debt. What is the most common problem of our OFWs? It is too much financial dependence of their families, which is why most of them end up remitting all their income that ends up being spent and left with very little or no savings at all. Our brothers and sisters off shore feel that they can’t handle the burden anymore and many are on the brink of desperation. I feel so helpless whenever I speak to them as all I can only offer are few words of advice, a listening ear and a prayer. On top of financial problems, there are many other problems that they encounter – unfair employment treatment, loneliness, among others.
But, there is much to be ecstatic about OFWs and financial education as well. From 2004 to today, I have seen an enormous growth in finance advocacies and advocates amongst the OFWs. I’ve also witnessed stark improvements in the financial literacy of many OFWs as well. Although it is far from ideal, I believe that there is already momentum in the arena of financial education among them, and this is largely attributed to the OFWs themselves. In
Dubai Coaching Event
the last 3 or 4 years, OFWs has successfully used social media as a means to spark interest on financial literacy. When the OFWs themselves began championing financial education in a more aggressive way and thanks to the internet, I believe it is only a matter of time before we see a financially enabled OFW population. Everywhere I go now, I have the chance to speak with them, sit down with them, break bread with them and most of time, I end up being encouraged myself by their passion to be financially enabled. Every country I go to, there will be advocates who will arrange for me to speak and teach and they do this not out of any gain but out of passion to help. They have also been busy organizing their own forums, seminars and outreach groups all in the name of financial education. There are many groups out there but I would like to honor two groups whom I have been working with and I have seen their relentless passion to see a financially empowered OFW citizenry: The Global Filipino Investors (TGFI) and OFW Usapang Piso under the passionate leaderships of Floi Wycoco and Burn Gutierrez, respectively. These mighty advocates are not only making waves, they are changing the lives of many OFWs. Of course, their groups are successful because of their equally passionate core teams and members so kudos to all of them! I would also take time to honor the advocates who have been instrumental in my being able to speak to many OFWs like Charma de Villa (OFW Usapang Piso Israel), Allan Miranda (TGFI Dubai), Siegfried & Leonora Ras (OFW Usapang Piso Singapore), Leo & Normie Pascua (OFW Usapang Piso Dubai), Bernard & Rhea Anduyon (OFIEM Qatar), Rex Holgado (Alkansya ni Juan Singapore) and my dear friend Jess Emerson Uy of a co-advocate based in Singapore. There are many more OFWs who I am not mentioning but I want to thank you and the nation should thank you too.
The advocacy of financial education for OFWs is well on it’s way, it has started, it is moving and it is growing. “Alea iacta est,” the die has been cast, it is now only a matter of time and more importantly, a matter of scale.
Catch me at 2 upcoming events – Singapore event and iCon 2013 at the SMX. Details below:
