4 Strategies for Stock Market Investment

If you don't plan, you're planning to fail

-Benjamin Franklin

     To become successful investor, you need to lay out your plan. Im writing this blog to give an overview  on strategies a newbie can use for his investment.

      These are things you to consider first.

     1. You should assess yourself.

•  Knowledge in Investing.  The most important thing you should know before you invest. Why? Investing in the stock market is very risky . Either you'll win or lose your hard-earned. Invest in your knowledge. Understand how it works. What companies you are eyeing to. 

• Know your risk appetite.  Knowing who you are will help you define what plan you'll implement. 

    2. Identify yourself as an Investor.

• Conservative investor.
• Moderate Investor.
• Highly Aggressive Investor

          Pick Strategies you can use on your trading or investing plan.

1. Short Term Trading. A strategy for those using Technical Analysis. Its for People who can analyze stock market indicators. Someone who has high-risk appetite. More focus on short period capital profit taking.

 Disclaimer, Im not a day trader nor a professional  technical analyst. 

Im giving Nickel Asia as an example. Using Swing Trade (days-weeks trading).  Its price dropped from 20php/share down to 10.67php/share. On June 13, I took a chance buying it at 10.67/shares volume of 400 shares . After 2 days its price appreciates at 11.24php/share. Then, I bought another 1600 shares on July 15. So I got 2000 shares with an average of 11.15php. As of July 15 its price appreciates to 11.50php/share and had my gains amounting of  2000++php for just a short period of time (2days). I sold it and locked my profit.

 In this strategy, market timing, decent fund, volume of shares are factors to maximize your gains.

2. Long Term (PCA Peso-Cost Averaging)

     Photo credit courtesy of Mr.Fitz Villafuerte

       In this strategies, investors  allow their money  grow for a long period of time like 5-10 years. Using PCA strategy (Peso-Cost averaging, a discipline of buying consistently inspite of market fluctuations. 

       Referring from the the table above you'll see that each month he invested regularly. He accumulated certain volume of shares at different stock price. Looking from the gain/loss table as we evaluate, his portfolio still manage to gained at the end of the year.

       You can apply PCA using COL Technical and Fundamental guide they provided to their client. If you're newbie, SAM table of Truly Rich Club is very useful in this strategy. Just follow its stock recommendation and do it diligently.

3. Long Term ( Buy and Hold)

      Its a passive investment strategy in which an investor buys stock and hold for a long period of time, regardless of market volatility. An investor like Warren Buffet used this strategy, bought a blue chips company with a very good fundamentals and keep it. Example for this is Ayala Land(Ali), as of November 9, 2011 its stock price was at 15.90php/share. Today as of September 24, 2015 its price is at 34php/share. For 4 years it has 46.77% growth. Imagine if you will hold it for a longer years its price will reach it full potential growth.

4. Value Investing ( Seth Klarman Style)

   You'll buy stocks if the UPSIDE (difference of Current Price vs Fair Value) is atleast 15% but ideally 25% and above. And sell when you hits Fair Value (then buy the next discounted stocks). 

Apply best suits to you. 

Happy Investing!

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