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How to Automate Your Investments

The Perks of Dividend Investing

Auto-investing is a simple and effective way to grow your wealth over time. It is a strategy that involves setting up regular and automatic contributions to an investment account. We all know that continuously investing will let you take advantage of compound interest. However, actually doing so is what often hinders people. Through auto-investing, you can take the friction away!

Auto-Investing in the Investa Platform

If you’re an existing Investa user, you can take full advantage of our auto-invest feature. On the platform, you can find it on the left side of the webpage: 

Step 1

You will have different frequencies to choose from. You can either invest weekly, monthly, or semi-monthly.

Step 2

Afterwards, you’ll have to pick the fund you want to invest in. As always, make sure to do your own research before choosing a fund.

Step 3

Of course, you also have to indicate the amount you want to invest per month.

Step 4

Next, link your bank account:

Once completed, something like this will show up on your auto-invest page:

Take note that you will have to agree to an Auto Debit Arrangement (ADA). A prompt will show-up asking you to fill-up a form which you will have to submit to your bank of choice. Afterwards, you should be good to go! Just make sure the bank account you linked will have the necessary funds available during the intervals you’ve set.

Is this worth the time and effort?

It definitely is! As mentioned, everyone knows the benefits of regularly investing. However, many often forget to do so consistently – so why not use technology to your advantage? By using auto-investing features, all you’d have to worry about is making sure there’s money set aside, and the Investa platform will take care of the rest!

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Getting Value Out of Social Media Feeds

Social media feeds are filled with content that keeps you scrolling. They are often created by algorithms that filter and recommend content based on user preferences, behavior, and network. Or, they also be created by users who deliberately follow, like, or comment on certain topics or sources.

Social media feeds are the cause for why users typically scroll through feeds for hours on end. So, how can you use them to your advantage? 

Motivate Yourself

One of the benefits of creating an alternate account with a feed full of financial advice is that it can motivate you to improve your own situation. By seeing posts from experts, influencers, or peers who share their tips, strategies, or success stories, you can get inspired and encouraged to follow their example. You can also learn from their mistakes, challenges, or failures and avoid them in your own journey.

Educate Yourself

Another benefit of curating your own social media feed is that you can educate yourself with it. By reading articles, watching videos, or listening to podcasts from reputable sources, you can gain valuable knowledge and skills that can help you make better decisions and actions. You can also ask questions, seek feedback, or join discussions with other users who have similar interests or experiences and learn from them.

Hold Yourself Accountable

A third benefit of curating your own social media feed in a way is that you can hold yourself accountable. When you hold yourself accountable for creating your own echo chamber, you gain back control over what content you feed yourself. You can also join online communities, where you can further fuel your learning. You can also receive support, recognition, or constructive criticism from others who can help you stay on track and overcome obstacles.

Conclusion

Social media feed are not inherently good or bad. They are what you make of them. By working towards filling your feed with helpful content, you can make scrolling a more value-adding experience.

It also might be worth looking for other niche social media platforms. Aside from our own Investagrams platform, forums like Reddit’s r/InvestPH can help you find a lot of opinions that are worth looking over!

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The Importance of Cash Flow in One’s Finances

Cash flow is the amount of money that flows in and out of your bank account over a period of time. In essence, it’s your income sans expenses. It can be a measure of how well you manage your money.

Cash flow is important for your finances because it affects your ability to achieve your longer-term goals. Whether you want to buy a house, start a business, retire early, or travel the world, you need to have a good stream of money coming in.

What is a positive cash flow?

A positive cash flow means that you have more money coming in than going out. This allows you to save more, invest more, and grow your wealth over time. A negative cash flow means that you have more money going out than coming in. This can lead to debt, stress, and financial problems.

How can you improve your it? There are two main ways: increasing your income and reducing your expenses.

Increasing Your Income

One of the best ways to improve your cash flow is to increase your income. This can be done by:

  • Seeking a raise or promotion from your current employer
  • Finding a new job that pays better or offers more benefits
  • Starting a side hustle or freelance work that generates extra income
  • Creating a passive income stream that earns money without much effort
  • Investing in assets that provide you with additional income

Increasing your income can help you achieve your goals faster. However, it is not enough to just earn more money. You also need to manage it wisely.

Reducing Your Expenses

Another way to improve your cash flow is to reduce your expenses. This can be done by:

  • Creating a budget and meticulously tracking your spending habits
  • Cutting down on unnecessary or wasteful spending
  • Looking for lower rates or fees for your bills and services
  • Switching to cheaper alternatives or providers
  • Taking advantage of discounts, coupons, or rewards programs
  • Saving energy and water at home or using public transportation
  • Avoiding debt and paying off high-interest loans

Reducing your expenses can help you free up more money for your cash flow and goals. However, it is not enough to just spend less money. You also need to allocate it smartly.

Allocating Your Money

The final step to improve your cash flow is to allocate your money according to your priorities and goals. This can be done by:

  • Setting up an emergency fund that covers at least 3-6 months of living expenses
  • Paying yourself first by saving or investing a portion of your income every month
  • Using the debt snowball or avalanche method to pay off your debt faster
  • Diversifying your portfolio and investing in different asset classes
  • Reviewing and adjusting your budget and goals regularly

Allocating your money can help you optimize your cash flow and grow your net worth over time. 

Having the Right Mindset and a Long-Term Vision

The final factor that affects your cash flow is your mindset. Your mindset is how you think and feel about money and yourself. It influences your behavior, decisions, and actions. You have to focus on opportunities that come your way and find solutions rather than complaining about problems and challenges.

You also have to remember that no matter the amount of money you’re handling, you have to stick to your plan. 

Conclusion

Cash flow is the key to financial success. By properly managing your money, you can improve your finances and achieve your longer-term goals. Always remember that:

Money attracts money.

As you continue to build up your wealth, more doors eventually open up for you to further improve your finances.

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5 Lessons from Market Wizards

Market Wizards is a classic book by Jack D. Schwager that features interviews with some of the most successful traders of all time. The book reveals the secrets, strategies, and mindsets of these legendary traders, who have achieved extraordinary results in various financial markets. In this article, we will summarize five key lessons that we can learn from Market Wizards and apply to our own trading.

Lesson 1: Focus on risk management

One of the most common themes in Market Wizards is the importance of risk management. Almost every trader interviewed by Schwager emphasizes the need to protect their capital and limit their losses. As Paul Tudor Jones, a famous hedge fund manager, says: 

“Don’t focus on making money; focus on protecting what you have”

To be successful, you have to use various methods to manage their risk, such as setting stop-loss orders, diversifying their portfolio, and sizing their positions according to their confidence level. By focusing on risk management, they are able to survive in the long run and take advantage of profitable opportunities.

Lesson 2: Follow the trend

Another common theme in Market Wizards is the power of following the trend. Many of the traders interviewed by Schwager are trend-followers, who try to identify and ride the dominant direction of the market. As Bruce Kovner, a billionaire trader, says: 

“I always believe that prices move first and fundamentals come second”

The traders in Market Wizards use various tools to identify and follow the trend, such as moving averages, chart patterns, and indicators. By following the trend, they are able to capture large moves and avoid fighting against the market.

Lesson 3: Be flexible and adaptable

A third lesson from Market Wizards is the importance of being flexible and adaptable. The traders interviewed by Schwager demonstrate a high degree of adaptability, as they are able to change their views and strategies according to changing market conditions. As Michael Marcus, a legendary commodities trader, says:

“Every trader has strengths and weaknesses. Some are good holders of winners, but may hold their losers a little too long. Others may cut their winners a little short, but are quick to take their losses. As long as you stick to your own style, you get the good and bad in your own approach” 

Some of the market wizards are not dogmatic or rigid in their trading, but rather open-minded and willing to learn from their mistakes.

Lesson 4: Master your emotions

A fourth lesson from Market Wizards is the significance of mastering your emotions. The traders interviewed by Schwager reveal how emotions such as fear, greed, and ego can affect their trading performance. As Ed Seykota, a pioneer of computerized trading, says: 

“The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance”

Great traders use various techniques to master their emotions, such as meditation, journaling, and self-awareness. By mastering their emotions, they are able to trade with discipline and objectivity.

Lesson 5: Find your own edge

A fifth lesson from Market Wizards is the necessity of finding your own edge. The traders interviewed by Schwager have different trading styles and approaches, but they all have something in common: they have found an edge that works for them. As Richard Dennis, a famous trend-follower and founder of the Turtle Trading System, says: 

“I always say that you could publish my trading rules in the newspaper and no one would follow them. The key is consistency and discipline”

Most professionals have often developed their own trading systems and methods that suit their personality, goals, and risk tolerance. By finding their own edge, they are able to trade with confidence and conviction.

Conclusion

Market Wizards is a timeless book that offers invaluable insights into the world of trading. By learning from the experiences and wisdom of these legendary traders, we can improve our own trading skills and performance.

In trading and in life, the best way to learn will always be to study how the best do it.

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An Introduction to Shorting

Shorting, also known as short selling, is a trading strategy that involves selling a borrowed asset in the hope of buying it back later at a lower price. Shorting can be used to profit from falling prices, hedge against downside risks, or speculate on market movements. However, shorting also carries significant risks and challenges that traders should be aware of before entering a short position. In this article, we will explain the basics of shorting, its pros and cons, and some common shorting strategies.

How Does Shorting Work?

Shorting is the opposite of buying or going long on an asset. When you buy an asset, you expect its price to rise and sell it later for a profit. When you short an asset, you expect its price to fall and buy it back later for a profit. To short a stock, you need to borrow shares from a lender, usually a broker-dealer, and pay a fee or interest for the loan. You then sell the borrowed shares at the current market price and receive the proceeds. At some point, you have to buy back the asset and return it to the lender. If the price of the asset has dropped, you can buy it back for less than what you sold it for and keep the difference as your profit. If the price of the asset has risen, you have to buy it back for more than what you sold it for and incur a loss.

What Are the Benefits?

Shorting can offer several benefits to traders and investors, such as:

  • Profit from falling prices: Shorting allows you to make money when the market is bearish or when a specific asset is overvalued or in decline. For example, if you believe that a company’s earnings will disappoint or that its stock is in a bubble, you can short its shares and profit from its downfall.
  • Hedge against downside risks: Shorting can also be used to protect your portfolio from potential losses or reduce your exposure to a certain sector or asset class. For example, if you own a long position in a stock that is correlated with the overall market, you can short an index fund or ETF that tracks the market and offset some of your downside risk.

Shorting also involves significant risks and challenges that traders should be aware of before entering a short position, such as:

  • Unlimited downside: Unlike buying an asset, where your maximum loss is limited to your initial investment, shorting an asset exposes you to unlimited losses if the price of the asset keeps rising. There is no limit to how high an asset’s price can go, so your potential loss is theoretically infinite.
  • Short squeeze: A short squeeze occurs when a large number of short sellers are forced to cover their positions due to rising prices or margin calls. This creates a positive feedback loop that drives the price even higher and squeezes more short sellers out of their positions. A short squeeze can be triggered by positive news, strong earnings, analyst upgrades, or other factors that boost the demand for an asset.
  • Stock loan fees: When you borrow an asset from a lender, you have to pay a fee or interest for the loan. The fee depends on the availability and demand for the asset, as well as the broker’s terms and conditions. The fee can vary over time and eat into your profits or add to your losses.
  • Margin requirements: To open a short position, you need to have a margin account with your broker and meet certain margin requirements. Margin is the amount of money that you have to deposit with your broker as collateral for your short position. The margin requirement depends on the broker’s policies and the volatility of the asset. If your account value falls below the margin requirement, you will receive a margin call from your broker and have to deposit more money or close your position.

Implementing shorting strategies

There are many ways to implement shorting strategies depending on your goals, risk tolerance, and market conditions. Some common shorting strategies are:

  • Selling a bounce in a downtrend: This strategy involves selling an asset after it has bounced from a lower low in a downtrend and waiting for it to resume its downward movement. This strategy requires identifying the trend direction, support and resistance levels, and reversal signals.
  • Entering within a trading range and waiting for a breakdown: This strategy involves selling an asset that is trading within a range-bound market and waiting for it to break below the lower boundary of the range. This strategy requires identifying the range limits, volume patterns, and breakdown signals.
  • Selling into an active decline: This strategy involves selling an asset that is already in a sharp decline and riding the momentum to the downside. This strategy requires identifying the catalysts, trendlines, and exit points.

What to expect from the introduction of shorting to the PSE

Shorting brings two big benefits for the Philippine market. First is that it’s possible for the market to experience an inflow of liquidity. Given that shorting requires a a lot of activity within stocks, it’s possible to see volume increase among shortable stocks.

Second is that traders can now profit from breakdowns. The benefits here are obvious and don’t need to be explained. However, something traders have to realize is that shorting isn’t as easy as it seems. Yes, the PH market may have been slumbering, but there’s a big difference between stocks having no significant movements within a range versus stocks crashing. You also have to consider that risk-reward ratios are different when you’re shorting.

As always, being systematic is the most crucial part towards profiting from the markets. The introduction of shorting is just another tool that we can use to do so!

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Fitting Trading Into a Busy Lifestyle

Trading is an activity that can be rewarding, exciting, and challenging. Trading is also considered to be the hardest game in the world. However, it also requires time, attention, and discipline. For many people, finding the time and energy to trade can be difficult, especially if they have a busy lifestyle. 

How can one fit trading into a busy schedule without sacrificing their quality of life? Here are some tips and strategies that can help.

Choose the right market and time frame

One of the first steps to fit trading into a busy lifestyle is to choose the right market and time frame that suit your availability and preferences. Different markets have different characteristics. Each one has its own unique amount of volatility, liquidity, trading hours, and fees. For example, the forex market is open 24 hours a day, five days a week, and offers low transaction costs and high leverage. However, it also involves high risk and requires constant monitoring of currency movements and news events. On the other hand, the stock market is open only during specific hours, depending on the country and exchange, and offers a wide variety of instruments and sectors to choose from. However, it also involves higher transaction costs and lower leverage.

Similarly, different time frames have different implications for trading. For example, trading on shorter time frames, such as minutes or hours, requires more frequent analysis, entry, and exit decisions, as well as more stress and emotional pressure. On the other hand, trading on longer time frames, such as days or weeks, requires less time and effort, but also less opportunities and slower returns.

Therefore, you should choose the market and time frame that match your goals, risk tolerance, personality, and schedule. For instance, if you have a full-time job that occupies most of your day, you may want to trade on longer time frames in the stock market or the forex market during off-peak hours. If you have more flexible hours or work from home, you may want to trade on shorter time frames in the forex market or the futures market during peak hours.

Plan your trades ahead

Another way to fit trading into a busy lifestyle is to plan your trades ahead of time. This means doing your homework before the market opens or after it closes, depending on your chosen time frame. You should conduct your technical analysis, fundamental analysis, news research, and risk management to identify potential trading opportunities, entry points, exit points, stop-loss levels, and position sizes ahead of time. You should also have a trading plan that outlines your trading strategy, rules, and objective – all of which should be in sync with the time and effort you can realistically give.

Planning your trades ahead can help you focus on just executing the trades onces the opportunity appears. It can also help you stay focused and disciplined on executing your trading plan without being distracted by market noise or external factors.

Use Technology Wisely

Technology can be a great ally or a great enemy for traders who have a busy lifestyle. On one hand, technology can help you access the market anytime and anywhere through various devices and platforms. You can use online brokers, trading software, mobile apps, alerts, signals, indicators, charts, and other tools to facilitate your trading process. You can also use automation tools to execute your trades automatically based on predefined criteria.

If automation isn’t suitable for you, alerts can be the better alternative. Even when you’re in the office or somewhere else, alerts will help you find out if significant moves are happening in the market.

Is it possible to trade successfully while being a busy person?

The answer is most definitely yes! Many well renowned traders have achieved success even as they have other responsibilities to attend to. The Market Wizard Tom Basso perfectly explained it in the Investa Summit 2023 that trading doesn’t need to be all-consuming. According to him, the best strategy will always be the one that you can execute based on your circumstances. Finding that strategy means figuring out what your edge is in the market, and developing a set of rules that will help you turn it into profits.

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Are Stock Screeners Essential for Traders?

Stock screeners are tools that allow traders to filter and sort stocks based on various criteria. Commonly these are factors like price, volume, market cap, earnings, and more. They can help traders find potential trading opportunities, identify trends, and analyze the performance of different stocks.

But, are stock screeners essential for traders? In this article, we will explore some of their benefits and limitations.

Benefits of using stock screeners

Stock screeners can offer A LOT of advantages for traders, such as:

– Saving time and effort: Stock screeners can help traders narrow down their search from thousands of stocks to a few that meet their criteria. This can save a lot of time and effort that would otherwise be spent on manually scanning through stock charts and financial statements.

– Finding hidden gems: Stock screeners can help traders discover stocks that are undervalued, overlooked, or have strong growth potential. These stocks may not be widely covered by the media or analysts, but they may offer attractive returns for traders who are willing to do their own research.

– Testing trading ideas: They can also help traders test their trading hypotheses and strategies by applying different filters and indicators to see how they affect the results. For example, a trader can use a stock screener to see how stocks with high dividend yield and low debt perform compared to stocks with low dividend yield and high debt. By coming up with different lists, it becomes easier to compare the performance of the two sets of stocks.

Limitations of using stock screeners

They are not perfect tools, and they also have some drawbacks that traders should be aware of. Here are some of the challenges that come with using screeners.

– Missing out on opportunities: Stock screeners may not capture all the relevant information or factors that affect prices. For example, a stock screener may not account for news events, analyst ratings, insider transactions, or market sentiment that may influence the demand and supply of a stock. Generally, stock screeners should be a part of the process towards finding opportunities. 

– Getting biased results: A trader may use too many or too few filters that may either exclude or include too many stocks in the results. By trying to perfect the filters too much, the results could already be losing efficacy.

– Following the crowd: Stock screeners may lead to herd behavior among traders who use similar criteria and indicators to select stocks. This may result in increased competition and reduced profitability for those stocks. Therefore, traders should always use their own judgment and creativity and avoid following the crowd blindly.

Should you use them?

Stock screeners are useful tools that can help traders find and analyze stocks based on various criteria. With the vast amount of assets available to be traded, they can be deemed essential for traders of any level. 

Just remember that screeners will always come with limitations. It’s important to remember that it will only remain as a tool – how effective it is towards finding solid trades will still depend on the skill of the trader.

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