Investors feel jittery lately mainly because of how the PSE is behaving. Sentiment during the past few weeks has not been good. There are a lot of factors contributing to this but basically, foreign funds are just flowing out from the Philippines (back to the USA? perhaps). Bad news, it looks like they’re not done yet so there is a good chance that the PSE might drop even lower in the next few weeks.

That being said, it might be good to stay away from the market and let the pessimism subside. Staying away from the market may be a wise thing to do given the current market conditions because it will keep you from getting emotional which would lead to wrong decisions and eventually losses. For very “passionate” traders who can’t seem to get their eyes and hands off the keyboard (of their laptops because of trading), in my opinion, here are some tips that you can consider in order to become more productive given the bad market sentiment:

1. Recalibrate your trading system. A trend such as what we’re having right now is a great opportunity to check and improve your current trading system. Get back on the drawing board and assess the flaws of your current trading system and figure out how you can further improve. If you don’t currently have a trading system, this is a good time to make one.

2. Accumulate cash. Keep in mind that stock prices won’t go down forever or won’t hit zero. Sooner or later, the bulls (buyers) will start to dominate and push stock prices back up again. There’s no better feeling than the market bottoming out and you’re holding on to tons of cash you can use.

3. Do other things. Your life doesn’t and shouldn’t revolve around investing or trading. Adjust your daily routine to enable you to become more productive everyday. Keeping your eyes glued to the market while it is dropping may make you miss a lot of things and might make you inefficient. Focus on your family, work and even hobbies. Strive to have a balanced life.

This current stage of the market is just a part of the entire cycle. It’s inevitable and something that cannot be avoided. This is just how the market moves.

The market cycle is something that we don’t have any control of. Instead of trying to force the issue by trying to buy because prices are already “cheap” (and only to drop even more after a few more days), do other things to make you better as a trader and as a person.

Article by Makoy Velasco, Certified Securities Representative
Any views or opinions represented in this blog are personal and belong solely to the columnist and do not represent those of people, institutions or organizations that the owner may or may not be associated with in professional or personal capacity, unless explicitly stated. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual.