Recently updated on: October 2, 2023
I've been investing and trading in the stock market for quite some time, and it has been a roller coaster ride since the first year of the journey. It has also been a way to learn more about patience and real life.
Like most stock market traders, I also started as a long-term investor before becoming a position trader and stock dividend investor.
But let me clarify, being a trader is not gambling. We still follow the rules and strategies when executing a trade, including the probabilities of winning and losing.
So when I started trading, I stopped following the peso-cost averaging (PCA) strategy I initially learned from several market gurus after realizing that PCA has more downsides when applied in the Philippine stock market.
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Trading in the Philippine Stock Exchange
The Philippines is still an emerging market, so we only attract a few foreign investors.
Also, with so many uncertainties in the country, like elections and high inflation, it is impossible to guess what will happen in the next few months or years.
Our local market also has extremely low participation of local retail investors. Many Filipinos usually have an inaccurate understanding or misconceptions or have just heard a bad reputation of how the stock market works.
While the stock market is a great way to maximize your time to achieve financial freedom, the Philippine Stock Exchange has not been great in the past few years since coming down from its all-time high in January 2018.
In addition, during the start of the pandemic lockdown, the Philippine Stock Exchange Index (PSEi) crashed from 7000 levels to as low as 4,000 levels, tallying a 45% loss in market value.
Learning Patience Through the Stock Market
Though I stopped being a peso-cost average investor, there are still other ways to learn patience in the stock market.
First, it is crucial to understand market timing and its cycles.
You need to know when is the right time to enter a trade and when to get out. I learned this (and still learning this) through consecutive losses during the choppy markets of the previous years.
I also learned that the best trading strategy for me is suitably used for uptrending stocks.
This means that during the weeks or months that nothing is happening in the market, I must be patient and wait for stocks to enter my trading parameters.
Generally, it is best to be very selective in stock picking or avoid trading altogether during the downtimes of the market.
The PSE is a long-only market, so there is no short selling yet, indicating that investors and traders won't earn if the market is downtrend.
To emphasize patience when trading, the great investor Charlie Munger, and long-term investment partner of Warren Buffet, said that big money is not in the buying and the selling but in the waiting.
Practicing Patience in the Stock Market
I am a full-time employee, so I don't have the luxury of monitoring the market for the whole day, and I can only trade on the side.
As I already mentioned, waiting for the right time to enter a trade is essential.
We can't just enter a trade based on social media hype, like Facebook Groups, YouTube, or TikTok recommendations.
Think about the hundreds or thousands of people falling victim to hype yearly.
According to Warren Buffet, the stock market transfers money from the impatient to the patient.
While he is known to hold a stock for years or even decades, that may not apply in the Philippine Market.
So, a rule that I follow is always to follow the uptrend. Wait for the right time to execute and maximize the trend.
Patience in the Stock Market vs. in Real Life
As an old saying goes, patience is a virtue, but often it is tough to do.
We live in a world where almost everything is instant, and there are fewer ways to practice patience.
But the successful stock traders I know from different trading communities often say that waiting is vital in trading.
Since I have progressed more in my trading journey, my patience has also improved, translating into patience in real life.
I often think of when I have to wait for weeks or months before I can trade my setup, and I compare it, for instance, when I have to wait in line or wait for my food to arrive. The few minutes of waiting are almost insignificant.
As a teacher, I also learned to be more patient with my students. Not everyone has the same ability to grasp a lesson as quickly as we would want, but with a little more time, they may also understand.
Taking patience into perspective keeps our eyes closer to the goal.
We must understand that there is no overnight success in many things we do.
Just ask the people scammed by different investment schemes because they want to grow their money as quickly as possible.
If we want to be great in anything, we must put in the time and effort necessary to improve significantly.
Final Thought
The stock market is one of the greatest equalizers, where skills in trading can be leveraged to improve our quality of life.
The relatively short time that I've been in the stock market taught me more about myself, like how to better handle my emotions, be more patient, be more systematic, and be a perpetual student of the market.
Remember that money is never the goal. It is merely the by-product of understanding how the financial markets work and how they can be maximized to improve our areas of influence and our society.
God bless!