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What the Philippine Stock Market Taught Me About Patience

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.

Like most stock market traders, I also started as a long-term investor before transitioning to be a trader. 

But let me clarify, being a trader is not gambling. We still follow 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 that I initially learned from several market gurus after realizing that it has more downsides when applied in the Philippine Market, which I already tried to explain in this previous post.

Trading in the Philippine Stock Exchange

The Philippines is still an emerging market, so we don’t attract a lot of foreign investors. Also, with so many uncertainties in the country, it is impossible to guess what will happen in the next few months or years, especially since 2022 is an election year.

Our local market also has extremely low participation of local retail investors. Many Filipinos usually have an inaccurate understanding, misconceptions, or 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.

To add, during the start of the pandemic lockdown in the whole island of Luzon last March 16, 2020, the Philippine Stock Exchange index or the PSEi crashed from the 7000 levels to as low as 4,000 levels, tallying to more than 40% loss in market value.

Philippine Stock Market (PSEi) Chart (2018-2020). Screenshot from Investagrams.com/Chart

Learning Patience Through the Stock Market

Though I stopped being a long-term 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 trading strategy that works best for me is suitably used for uptrending stocks.

Meaning, 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 a downtrend.

To emphasize patience when trading, the great investor Charlie Munger 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. 

So as I already mentioned, it is essential to wait for the right time to enter a trade. We can’t just enter a trade based on a hunch or Facebook, YouTube, or TikTok recommendations. Think about the hundreds or thousands of people who fall victim to hypes every year.

According to Warren Buffet, the stock market is a device for transferring 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 to always 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 that I know from different trading communities would often say that waiting is vital in trading. 

Ever since I have progressed more in my trading journey, my patience has also improved, translating into patience in real life.

I often think of the times when I have to wait for weeks or months before I can trade my setup, and I compare it for an 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 to be, but with a little more time, they may also understand.

Taking patience into perspective keeps our eyes closer to the goal.

In many things that we do, we need to understand that there is no overnight success. Just ask the people scammed by different investment schemes because they wanted to grow their money as quickly as possible.

If we want to be great in anything, we need to put in the time and effort necessary to produce significant improvement.

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 for the betterment of our areas of influence and our society.

God bless!

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