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5 Ways to the Best Investment Ever

Here in Investa, we’re all about investing. We understand the value in devoting time and effort into something that will deliver a worthwhile result. But sometimes, in our rush and devotion to increase our wealth and finances, we often forget our most valuable asset we possess: OURSELVES. 

Investing in ourselves enables us to gain more control over our life and change its potential exponentially. Out of all the investment opportunities out there, investing in yourself will always be the most important one that’s absolutely worth the time and the risk to do. 

Often, you don’t have to wait for months or years for returns on investing in yourself as pay-off can be seen almost immediately. 

Here are 5 different ways you can invest in yourself:

Nurturing both your body and mind

In today’s day and age, everything is extremely fast-paced and hectic. Practicing meditation and mindfulness will have a positive impact on your stressful daily routines. Science has proven that meditation reduces stress, controls anxiety, promotes emotional health, enhances self-awareness and even generates kindness. Make an effort to eat healthy as it improves your body now and in the future. Having a balanced diet makes you look and feel great, too! 

Read books

Always look for ways to educate yourself. Reading is an amazing way to invest in yourself because it’s often cheap and extremely informative. School ends, but learning doesn’t have to. Strive to improve your general knowledge and vocabulary by reading books that stimulate your imagination and entertain you.

Strive to learn something new

Try to develop a skill that’s different from what you’re used to. Constantly learning and developing new skills gives you the advantage that others don’t have. Get creative when learning new things and always remember to have fun!

Set goals

Be realistic and time-sensitive when setting goals. Arrange them based on their priority and divide them into different properties such as personal, career, or business goals. Create a vision board to get a better understanding of the things you truly want to achieve in life.

Prioritize self-care

We’re all about the #hustlelife, but it’s also important to indulge in ourselves once in a while. You can do this by really resting on your days off and doing things that help you unwind and enjoy life! Find that balance, and whenever it tips, ask yourself if you work to live or live to work.

Bonus:

Invest in your future

We always strive to live in the present, but that doesn’t mean we only think of the present. Even at a young age, it’s important to think about your future finances and how to afford that future lifestyle you want to have. Don’t wait until you’re near retirement to think about your life in retirement!  

Doing these simple steps will assure you a better quality of life moving forward. And even simply incorporating one or two steps into your routine will deliver a positive effect in your life. All these take time and effort to accomplish, but with all things worth investing in, it is worth to put in the work to achieve them.

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Feeling FOMO?

Ever felt like missing out on a trade or a possible investment? Of course you have. 

If you’re not new to trading or investing, you must be pretty familiar with the fear of missing out on a breakout stock or a breakout cryptocurrency. This has been even more common in the resurgences as of lately in the Philippine stock market where most stock prices have greatly recovered after a long and deep slump brought about by the effects of the still-ongoing pandemic.

This is also evident in the cryptocurrency scene wherein the volatility of some cryptocurrencies can mean big payouts, and missing out on this can feel like a massive opportunity cost, and as they say, “opportunities don’t come around too often.”

While this is a perfectly natural response, it’s an overall dangerous mindset to feed into that can lead to a lot of irrational and overly spontaneous choices like buying at the peak only to lose money once the high projections begin to subside.

Most traders and investors, especially beginners, have lost a lot of money doing this, sometimes losing a lot more than what they could’ve made if they had bought in earlier. So what do we do when we feel like missing out?

Keep Calm

As always, it’s important to keep a calm and collected composure. You can’t let emotions cloud your judgement especially in the matters of your hard-earned money. Decisions made at the spur of the moment often do not end well because they were not thought through prior to making them.

Stick To Your Strategies

Stick to indicators to properly evaluate whether getting into a position would be an ideal and realistic move. Monitor charts and the news to get a clearer affirmation on whether buying a possible stock would prove profitable or not.

Relying on a good set of strategies of your own to help you out in your investment or trading journey can not only help guide you in avoiding loss, but can also open up the chances of finding upcoming possible breakouts.

Think Ahead

Giving in to FOMO is like chasing a ride that has already taken off. You have to realize that there are many more opportunities to bank in the market, you just have to look at the bigger picture. While not all opportunities are as momentous as others, it’s important to remember that profit is profit, and “missing out” on a certain breakout isn’t the end of the world.

The fear of missing out on trades is a familiar but dangerous feeling. It can lead to a lot of rash decisions so it’s important to maintain control at all times by keeping calm, relying on rational strategies, and by looking beyond just the opportunity at hand. This way, you not only safeguard your money, but you also open your eyes to other possible opportunities.

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Why You Need to Journal Your Trades Now

First things first, how do stock traders journal their trades? A good trading journal has information about every single one of your trades. Journaling is something that needs to be done religiously whether it’s a profit or a loss since a trading journal is not something that you keep as a source of pride or proof of just your successes.

With that out of the way, here are some reasons to consider starting or continuing your stock trading journey.

Help Set Up Gradual Goals

A trading journal can help you set step-by-step goals to not put unnecessary pressure on yourself while you’re still in the learning process. It’s a great way for you to filter the goals you would like to pursue, how you will measure your progress, and what you can do in order to achieve those goals. With a journal, there is a visual understanding of what you need to work on if you want to hit your next goal and the goal after that.

Manage Risk More Efficiently

A lot of stock trading beginners don’t realize that their initial risk management technique costs them a lot of money. A trading journal can help you see where you might be making mistakes with the handling of risk. An example would be that you’re not taking a big enough risk to generate your target profit because you set the stop loss too close to the current price.

Assist in Working on Your Mistakes

“Failure is a great teacher and if you’re open to it, every lesson has a lesson to offer” – Oprah.

Keep in mind that all trading strategies will fail eventually so you must always strive in finding new ones to replace the failing strategies. A trading journal gives you documentation to help you review all of your trades to see where you went wrong and compare the performance of any two periods to see if you have experienced any improvement from assessing your mistakes.

Holds Accountability and Brings Consistency

For most traders, impulsive trades are usually the root of their losses. Having a trading journal means that you’re less likely to make trades that aren’t part of your trading plan because you review those impulse trades to help you be ready if the same scenario arises again.

Eventually, as you continue to use your trading journal, your bad habits will start to diminish and you’ll stop losing money because you’ll be able to see the mistakes that you’re making and make sure to try to avoid them in future trading sessions.

These are just some of the reasons why traders keep a trading journal and it could be beneficial for you too. Remember that to avail of the full benefits of a trading journal, you need to remain consistent in keeping a completely unbiased and comprehensive journal. The purpose of the trading journal is to help you review your weaknesses in your trading strategy and help you right those wrongs for future success.

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Third Side of the Coin

As a self-proclaimed bounce specialist, or how my teammates like to call me, “bounzerizt,” most traders ask me, “Sir how can you be so good at picking the bottoms? What is the secret?”

To the best of my knowledge, I don’t have any. What you know about trading more times than not are the same things that I know. See, I don’t really consider too much variables before I enter a trade. When I see a signal, I execute with no questions asked. People who know me always hear me say, “execute now, ask questions later.” because that’s how I think it should be, trading without hesitation.

My philosophy is this: fundamentals don’t necessarily matter, technicals don’t necessarily matter. What matters is the crowd psychology manifested through price action.

Cliché as it may seem, but I believe that Price Action is King. Some of you may argue, “isn’t price action a part of technical analysis?” and I would respond, “I don’t think so.”

Technical Analysis for me falls under the belly of price action and not the other way around. Phrasing it this way makes it clear that price action towers over technical analysis.

I know you think that sounded weird but don’t worry, most people do. My thoughts have always been plagued by criticism and skepticism not only from beginners but also from experts in the field. The very main reason is the counter-intuitiveness and seemingly illogical ideas that I present. Most of the ideas I say contradict common knowledge yet agreeing with it at the same time. I don’t have any words, but I think this may describe it lightly—paradoxical.

Now, going back, how the heck do fundamentals and technicals seem to not matter in my eyes? Let me tell you what I think about them.

Fundamental Analysis or Fundamentals is anchored to the idea of valuations. Using balance sheets, cash flows, or whatever, fundamental analysis aims to give intrinsic value to the company. The calculated “value” of the company then gives the analysts an idea of the cheapness or expensiveness of a stock.

On the other side, we have Technical Analysis or Technicals. Technical Analysts use various mathematical indicators like RSI, Stochastics, Moving Averages, and artistic models like, Harmonics, Elliott Waves, etc. to tell whether the price will go up or down in the future.

You might ask what kind of trader am I between the two—I am neither.

See, both fundamentals and technicals suffer the same fate. They aim to PREDICT what is about to happen, they predict future prices of stocks based on their calculations. They are trapped in the future where they think price will be. They seem to be disconnected from the present moment. 

“WhAt dO yoU uSe Th3n?!”

What I have for you is a third kind of analysis that differs significantly from the two. What I propose is price action trading—understanding the psychology of the crowd.

Contrary to both Fundamentals and Technicals, Price action trading anchors to the idea that the current price is the only true price. Anything before or after that, have no significance whatsoever. The idea is to NOT think about the future price, but rather to accept that what you see is the only truth and that you have no control over what will happen next. What you only know is what it currently does. This removes the disconnect from your mind on what the price SHOULD BE and where it’s currently at.

Price action analysis deals with the collective behavior of the market participants, being in synch with the market at any instance. To not think about the future or the past. To be present in the moment. To enjoy, feel, and taste every bit of the movement. To have an intimate relationship with price. To be one with the market.

Knowing that you don’t have to know is one of the greatest discoveries I had, and it changed me forever. 

That for me is the third side of the coin. Both fundamentals and technicals have long been crowned as the only types of analyses there are. I think it’s time to honor the third side of the coin, the price action. And call for a separate study of it, divulging from its commonality with technical analysis.

Price action trading gives you insights about the behavior of the crowd behind the movement. The fear, the greed, the denial, the despair behind the price. Technical analysis just fails to do that.

To end, I would like to give you a quote that I think most of the traders reading this would need to ponder upon.

“It is not that we know too little, it is because we know too much.”

Think about it for a moment, do you really think you know too little? Or are you just learning too many at the same time?

Lessen your analysis and focus on price. Who knows what things you’ll uncover?

Contributor:

Full Name: Geyzson Kristoffer S. Homena
Investagrams username: @GeyzsonKristoffer

Channels:
Investa: bit.ly/GeyzsonKristoffer_Investa

Facebook: bit.ly/GeyzsonKristoffer_FB

YouTube: bit.ly/GeyzsonKristoffer_YT

About the Contributor:

An Applied Mathematics graduate and a full-time teacher, Geyzson Kristoffer is a part-time trader who has been an active user of Investagrams since 2017. He spends his mornings, afternoons, and evenings learning about trading and reading books: Alexander Elder’s Trading for a Living being his favorite. Cohering to his passion and profession, he set his heart on teaching and helping newbies, but only the dedicated ones.

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Which Equity Mutual Fund Is For You?

First things first, what is an equity mutual fund? An equity fund, also known as stock funds, is a mutual fund that invests principally in stocks. The fund manager tries to offer great returns by spreading the investment across companies from different sectors or with varying market capitalizations.

Typically, equity funds are known to generate better returns than term deposits or debt-based funds but there is still a considerable amount of risk associated with these funds since their performance depends on various market conditions. Without further ado, here are the different types of equity mutual funds.

INVESTMENT STRATEGY-BASED CATEGORIZATION

Sectoral Fund

Also known as a theme fund, sector funds follow a specific investment theme like an international theme or local theme. Some themes might also invest in a particular sector of the market like technology or pharmaceutical. It is important to note that these funds carry a higher risk since they focus on a specific sector or theme.

Contra Equity Fund

As the name suggests, contra equity funds follow a contrarian or nonconformist strategy of investing. These equity funds analyze the market to find under-performing stocks and purchase them at low prices. This would be under the assumption that these stocks will recover in the long term.

MARKET CAPITALIZATION-BASED CATEGORIZATION

Large-Cap Fund

Typically, the large-cap fund invests a minimum of 80% of the investment in equity shares of the top 100 countries according to market capitalization. This strategy is considered to be more stable than the mid-cap and small-cap focused funds.

Mid-Cap Fund

Mid-cap funds invest around 65% of the total assets in equity shares of the top 101 to 250 companies according to market capitalization. These schemes tend to offer better returns than the large-cap strategy but tend to also become more volatile.

Small-Cap Fund

Considered the most volatile out of the three, the small-cap fund invests about 65% of the asset in equity shares of companies ranking 251 and below according to market capitalization. If done right, small-cap funds tend to offer the most returns compared to large-cap and mid-cap funds.

Multi-Cap Fund

Multi-cap funds usually invest in a mix of equity shares from large-cap, mid-cap, and small-cap companies in varying proportions. With this type of fund, the fund manager keeps rebalancing the portfolio to match the market and economic conditions as well as the investment objective of the scheme.

INVESTMENT STYLE-BASED CATEGORIZATION

Active Fund

These schemes are actively managed by the fund managers who handpick the stocks that they want to invest in.

Passive Fund

Passive funds usually track a market index which determines the list of stock that the scheme will invest in. Unlike active funds, this strategy does not require the fund manager to have an active role in the selection of the stocks.

Now, the choice is yours, Ka-Investa. Do you want to get into Mutual Funds? If yes, which one would you like to explore on?

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Top Long-Term Investments

“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” — Robert Kiyosaki

Long-term investments refer to saving for an extended period of time. The range for long-term investments can be at least 10 years or more. The goal of long-term investments is mainly for big-picture costs such as retirement or for the future generation.

Often, long-term investors will use the buy and hold strategy where selected investments are purchased but not significantly changed for up to several years or more. Here are some great options for long-term investments.

MUTUAL FUNDS

With so many different types of mutual funds, the ideal mutual fund of long-term investors is stock mutual funds. Stock mutual funds, especially growth stock funds and aggressive growth stock funds, are suitable because they have historically achieved higher average rates of return than other investing and saving vehicles. Many long-term investors also like to invest in index funds for their low cost and their tendency to average good returns over long periods.

REAL ESTATE

All over the world, real estate is considered one of the safest sectors to invest in. The greatest appeal of real estate is that it doesn’t require any special skills. If you look at it from a statistics standpoint, the population is growing while the supply of land stays the same. Because of that, the demand will continue to grow meaning the returns from real estate will also continue to yield great returns in the long term.

INSURANCE

Like mutual funds, there are many great options of insurance both in short term and the long term. Life insurance is the most common type because it provides a measure of security for your loved ones. When deciding whether life insurance is a good investment, it’s important to understand that the variations of insurance plans generally fall into two categories, permanent, and term.

Because term life is designed to cover you for a set term, they are typically less expensive than permanent life insurance premiums. Because term life is designed to cover you for a set term, they are typically less expensive and more flexible than permanent life insurance.

STOCKS

The main reason to buy and hold stocks over the long term is that long-term investments almost always outperform the market when investors time their investments correctly. It isn’t unusual for stocks to drop 10% or 20% over a shorter period of time but riding out temporary market downswings is considered a sign of a good investor.

It is important to note that stocks rise and fall every day so knowledge of the companies you invest in would be key to looking at high returns. Compared to other investments like real estate, trading in stocks is still considered a risky game and requires a significant number of skills to be learned to truly master stock trading.

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Is Your Insurance Policy Right For You? (Part 2)

Although we can’t predict the future, we can protect ourselves if something unexpected were to happen. Insurance is meant to safeguard us from fortuitous events financially. Here are some insurance options you’ll want to look into and purchase.

Life Insurance

This is considered the most common type of insurance where you pay premiums to receive protection in case you pass away. The greatest benefits of life insurance include the ability to cover your funeral expenses as well as provide for your beneficiaries. Within life insurance, there are multiple types of policies to choose from. The two basic types are traditional whole life and term life. Traditional whole life is used as an income tool and an insurance investment. Term life insurance, on the other hand, is a policy that covers you for a set amount of time.

Health Insurance

Health insurance typically pays or helps pay for medical, surgical, and sometimes even dental expenses. This can cover you and your immediate family to be able to pay less on check-ups or in case someone gets hospitalized. The Philippine government actually has universal health coverage, PhilHealth, that Filipinos are entitled to.

Educational Insurance

As the name suggests, this type of insurance can cover education fees. With the inflation of tuition fees, educational insurance lets you save money in advance. The money you put in will be invested by your policyholder and can be cashed out for tuition payments, school allowances, and other educational expenses. Educational insurance can be started as early as possible to get the best prices.

Vehicle Insurance

When buying a car, motorcycle, or any type of vehicle, it’s important to also buy insurance that will cover that investment. This insurance can offer reassurance in case you get into an accident, your vehicle gets stolen, vandalized, or damaged by a natural disaster. There are two types of vehicle insurance you’ll need to consider. Compulsory Third Party Liability (CTPL), the most basic and least expensive car insurance in the Philippines, is not only government-mandated but also covers the interest of the third party in the event of an accident. Comprehensive Car Insurance (Compre) is not mandatory but is highly recommended because this protects you, your cars, and your passengers.

Property Insurance

Property insurance is a broad term for a series of policies needed for property protection coverage. Within property insurance includes policies like renters insurance, flood insurance, and earthquake insurance. This is needed for cases such as fire, floods, earthquakes, and theft. This type of insurance gives you coverage of your house and the furniture inside.

Travel Insurance

Got the travel bug lately? Well, before you book the ticket or board the plane, don’t forget that there’s insurance for that too. Travel insurance gives you traveling protection locally and abroad. In case you lose your luggage, have a delay in your flight, and run into accidents while traveling, this insurance will come in handy.

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