5 Lessons I Learned from Investing in the Stock Market

5 Lessons I Learned from Stock Market Investing

I must confessed that I have a skeptical attitude and reservation before I started investing in the stock market. In addition to substantial risks or volatility, stock market investing is exclusively for expert business people.

It must be daunting as it requires extensive financial knowledge and experience.

However, the truth is even an ordinary OFW like you and me can participate in the stock market.

What makes the difference?

Simple.

Two years ago, I put my money in BDO bank at Calamba Branch. Today, instead of keeping the money in the bank, I bought stocks from BDO. I am now a shareholder of the company. This is the difference.

I must say stock market investing is a great learning experience.

So, let me share with you what I have learned from my personal investment journey in the stock market for almost two years. If you’re investing for many years, I’m sure you can add some on the list.

1. Be patient

Patience is a noble virtue which can also be applied even in investing. It is the very first lesson I’ve learned in the stock market. Many times I have to be patient.

When you see a lot of reds in your portfolio, sometimes it can drain your brain and emotion.

However, when the stocks are down, you cannot do about it. This is beyond your control. You need to see the value of patience and learn to ride the ups and downs of the stock market.  You just need to have patience and keeps investing regularly no matter what.

2. Understand the value of time

As a newbie investor, I have seen the value of time in investing. Once you realized how precious time is, you wouldn’t waste it.  If I have known this ahead of time, I will certainly invest in the stock market right after college and get my first job.

That is why I get another COL Financial in-Trust-For (ITF) account for my eight-year-old son (for college fund) because I understand how important time is. In my opinion, procrastination is one of the greatest enemies of achieving your financial goal. So, use your time wisely.

The value of compounding interest is a great wonder of the world as what Albert Einstein said. Over time, you will reap what you have planted a long time ago. If you have not yet started investing in the stock market, I hope you would begin in 2017 as time is so precious.

3. Find a great mentor

They say an investment in knowledge pays the best interest. In every endeavor you do, there is wisdom in finding a mentor and educate yourself before you do investing.

As for me, TrulyRichClub (TRC) is a great mentor when it comes to financial education.

In addition, I don’t have to worry and look at my portfolio every single day. While other investors are worrying so much during financial crisis, I am confident and secure that my mentor will remind me that crisis is a great opportunity to earn more.

4. Learn to manage risks

Every investment opportunities has potential risks involved. Whether you have saved money in the bank, or  you have invested in mutual funds and stock market, investment is always associated with certain level of risk.

While stocks investing involves volatility, the truth is that if it is managed properly, you will surely gain potential returns in the long run.

But you must remember that the best way to manage risks  is to invest in long-term and diversify your investment portfolio. Long-term means 10-20 years investment horizon. Diversifying on the other hand means do not put all eggs in just one basket.

In my case, TRC offers strategic advise how to diversify my online portfolio in order to reduce the risks.

5. Have discipline

Many times I was tempted to spend my hard-earned money with things that are not necessaries. Discipline is important for you to develop the habit of investing. For instance, right after receiving my salary, I have to invest 5,000-8,000 pesos every month. I thought it was easy in the beginning specially if you are used to eat at the mall almost every week. Some investors, for whatever reasons, decided to stop investing.

But when you start investing, you started to look beyond the present. With discipline and consistency, it is not surprising to reach your first 6-digits investment in one year. However, you need to discipline yourself and be consistent of funding your online portfolio to achieve your financial goals.

Happy investing!

Ants are creatures of little strength, yet they store up their food in the summer. — Proverbs 30:25, NIV

 

Richly blessed,

JUN AMPARO is the author of OMG! OFW’s Money is Gone: Practical Tips on How to Be Wise with Your Hard-earned Money which was featured at GMA News OnlineBeing an OFW for over a decade, he’s aware about the common financial challenges of many Overseas Filipino Workers.  

Jun is investing in mutual funds and stock market for over three- years and conducts financial literacy seminar.