Things I Wish I Knew Before Investing

This post has been requested by Ching in the Ask Me Anything section.

I have been racking my brains to come up with list of things I wish I knew before investing that's why it took me a while to finally post this. 

You see, before investing, I was already studying/reading heavily about it. I took notes upon notes to prepare myself and to know what to expect, as well as to create an investor's mindset. I had zero background when it comes to investing, and I am the first in my immediate and extended family to dabble in the stock market. You wouldn't believe how I crammed for it. I studied like my life depends on it! So I thought I encountered everything about the stock market from all the books that I read, but when I really searched deep, I still end up with this list:

• It's okay to learn along the way

What's the use of all the knowledge you gained if you don't act on it. I mean, do you really have to be an expert on spotting winning stocks before you invest? What if you'll never become an expert, then you'll waste the opportunity to make your money grow. Why don't you do some Peso Cost Averaging on growth stocks while learning how to pick bargain and winning stocks on the side ?

The more you know, the scarier it seems, and sometimes, the more you know, the more you tend not to act on in because, "Ay, I'll wait for the market to dip before investing," or "I'll wait for this and that before investing." You tend to make excuses based on the information you gathered. Sometimes, too much information could paralyze you and you end up not doing anything about it. 

• Seriously, you don't have to be good in math to be an investor

That's why I studied investing super hard to compensate on my lack of math skills. I thought stock market is all about numbers and for non-math person like me, I get nauseated just looking at numbers! There are numbers involve in investing, of course! Like how to calculate P/E ratio, Market Value, etc., but you know what, there's this thing called  calculator , so if you know what that is and how to use it, you should be fine!

Buy low, sell high. For anything else, use calculator

  •Just because your money goes there doesn't mean you have to invest in it right away.


When you become an investor, you tend to read the back print found on the back of any consumable goods you use/consume to find out what company makes it/ who makes what. You might say, "hey, I am using this one for a long time and I love it. Isn't it right to invest on a company whose product I have been using?" STOP. Read about the company first, do some Fundamental Analysis, then invest. Don't invest blindly. I did that once. If you want to know about it, read it here.

• The more you know, the more you panic

Ignore the noise and stick with your plan. Unless you want to be a day trader, don't listen too much about what's happening on the stock market world. 

• Avoid heard mentality

When the media is all smiles because the stock market is up and all, people tend to buy and buy, but when the market is all red, people tend to panic and sell. It should be the other way around. 

(Last year, when the market was super high, I didn't do a thing! I was buying rather than selling, even though most of my stocks were really doing well. This year, when the market reached 7,400 mark, I sold some of it.)

It's really hard not to follow the crowd. It's hard to sell when you see everybody being optimistic and when you see your stock going up and up. Cut the greed, sell it and be happy with it. As they said, when the dogs are hungry, feed them.

On the other hand, it's hard to buy and remain optimistic when you see stocks are all red and everybody is noisily selling. 


Well, it took me a while to train myself to go against the herd. 

• Really, stock market is all about what other investors/traders think

Regardless of what the company is really worth, most of the time, people respond, whether to sell or to buy, base on what they hear (news, rumors, etc.)  

• Investor's Relation section in a company's website is worth checking out. 

Find out what's the company's plan 5-10 years down the road.

• People tend to INFLATE their winnings and DEFLATE their losses

Don't believe on people who claim to have a "Midas Touch" when it comes to picking winning stocks. Most of the time, people exaggerate their winnings and downplay or hide their losses. Study about the stock market. Nothing beats the feeling of knowing where your money goes. After all, it's your money. Plus, when you study and learn about the stock market in general, this will add and widen your financial knowledge. Double check!

• Be an optimist

If my memory serves me right, I heard from Edward Lee, the current owner and founder of Citiseconline, that there are only 700,000 Filipinos among 100 Million who are investing in the local market, 500,000 of which are actively trading. That's less than 1 percent of the population! Imagine if even half of the working population started to invest, it would be great for our country as a whole!

As a Filipino, we should believe that our country can get out of the "Third World Country" label. One should be optimistic and start to believe that our nation will rise from a helpless cub to a ferocious tiger! We should stop complaining and start believing that we will eventually get there!

• It's okay to sell

I get stuck with the dreaded analysis-paralysis mode, but I am trying to overcome it. I keep telling myself that when my stock has double its price, I should sell. There something sane about knowing that you are getting your original capital back, when you sell some of your position because the stock has already doubled.

Some has this strategy they set for themselves that when a certain stock gain certain percentage (let's say 30 percent), they sell it no matter if it's still going up.

• It pays to buy when the market is in it's lowest, but don't time the market 

Isn't it confusing? Well, my point is, when you were one of those people who started investing when the market was in its lowest, you would have reaped the rewards by now. Personally, I started investing last 2011, when the market was in the bear-ish state (though I wish I knew about investing way back 2008, when the global economy came crashing down), my gains now are super great! Let's just say when market dipped sometime this year, my all over gain still hovered around 10 percent! That's why it pays to buy when the market is in it's lowest, but don't try and time the market or you'll end up not investing because, " Ay, maybe it will go down further pa!"

There goes my list of things I wish I knew before investing/ things I now know because I'm investing.

 How about you? Are there things you wish you knew before investing?