It's hard to time the market. Don't even try.

Here's my experience with the recent Black Monday and how investing in stocks sometimes hurt big time.

I saw my stock portfolio depreciating little by little for one month already. I had some money saved and thought I'd buy more stocks while it's still low. That was Monday morning 9 AM. I entered my buy order on my favorite online broker then let it be.

2 hours later, I wanted to check if my order pushed through. That's when I saw the sea of red numbers all over my screen. Not only it was red, it went down really low. -5% at that time.

I checked again this morning and my portfolio went almost 8% down. All in all, my savings stock profits went almost down since 2 months ago.

I realized that it's so hard to time the market. I thought it was low already and didn't think it could go much lower than that.

I still believe in my financial strategy: buy and hold. I still believe that after a huge market correction like the one we just got, we'll experience a bull run that will lead to new record highs. That's what I experienced with the 2008 market crash. 7 years after, the stocks have reached records highs. I hope we'll experience the same thing again.

As of today, the Philippine Stock Exchange Index is at 6,791 down from a 8,128 back in April. That's roughly a 16% decrease.

I'll review this post next year and compare how the stock market will perform from this point.

Stocks are going down for a big correction, just breathe, don't look and don't stress out

Once in a while, stocks suffer from a major correction. The industry expects this every 5 years.

If you look at it, the major correction was in 2008, 7 years ago. This correction is 2 years overdue.

My advice: don't look at your portfolio, don't panic, don't stress out and DON'T SELL!

Actually, YOU SHOULD BUY!

You need to know that stocks go up and down. Some "experts" will tell you it's because of China if the market gets depressed. They will tell you that China is on a steep decline. The funny thing is, the same experts said the complete opposite last year. They said China is on a steep climb while the US and Europe was doing bad. Can we trust these experts? No.

But they are the reason of these corrections or crash. They just buy and sell based on some news and they always change their mind! They can't keep a good strategy because buying and selling is what they do. It's part of their job. A financial analyst who doesn't advise to buy and sell is an analyst who doesn't make money. So, for any little reason, they'll buy and sell. Remember they make money each time their client make a transaction...

Do you think the company you invested in like Jollibee, BPI and Ayala are being affected by China or Greece's economic performance? NO! They are not so why are
these stocks going down also? Because people don't know what they are doing or they are very greedy...

Let's be smarter than them. Let's stick to our strategy which is buy and hold for a long time so we can finance our retirement.

Look at your portfolio now, take note of it. Check it one year from now and see the difference. I bet you already forgot this correction because stocks go higher and faster after one.

COLfinancial is now selling Mutual funds

Good news for us investors, our favorite Philippine online broker is now offering mutual funds.

Most people don't know what's a mutual fund and what it's used for.

To simplify things, mutual funds pool money in order to buy a basket of stocks. A manager chooses and buys stocks he believes to be most profitable. By investing in a mutual fund, you buy a little bit of all the stocks included in the basket.

Thanks to COL financial, you can now access a list of dozen mutual funds.

I own some mutual funds in my portfolio but there are pros and cons of it.

PRO:

- they are safer because they are more diversified
- they are supposed to be managed by successful portfolio manager

CONS:

- they charge a fee
- you don't have control of what stocks the fund holds
- badly managed funds costs more money to operate
- many studies shows that mutual funds don't outperform the financial market

As you can see, there are more cons than pros but it doesn't mean it's a bad investment. I particularly advise it for beginner investors.

My concerns are more with the fees they charge and how successful is the manager.

Fees range from 1.5 to 3 percents annually. Which means that every year, you must pay the fund 3% of your money which can greatly impact your profitability.

Many studies show that funds underperform compared to the stock market. Mostly because the fees they charge negatively affects the returns on the investment.

I'd advise you to invest in low fee type of funds. They are also called index funds. An index fund is not actively managed so the fund company will charge a lower fee.

The XALSIF is an index fund operated by BPI that invests in the same companies listed in the Philippine Stock Exchange index (PSEi). It's a great way to start investing.

The minimum investment is 5,000 pesos.