Stock Values Rolled Up
The stock market went up for the third straight day after a seven-day slide in the last two weeks that brought the index to its lowest level since August 2007. Whew!
Last January 25, Friday, share prices closed at 2.9% higher. The market began to recover last January 23, Wednesday, with a 5% increase.
Last week, I observed in the PSE trading floor the uneasiness among the traders, investors and speculators.
The first decline was blamed to the destabilization plots against the government. However, the plunge was worldwide. The fall of the U.S. stock market triggered the frantic selling of shares from all over the world. It was even feared that there will be a possible recession in the U.S. economy. The country was affected since our economy is dependent to the U.S. being one of our strong trading partners.
Last Tuesday, the PSEi hit a cumulative 24.19% decline from its peak. We were in bear market phase.
Our government, however, is confident that we can surpass the possible U.S. recession.
The good news here is the market always bounces back after the meltdown.
An investor friend explained it to me very well before. I want to share it to you.
He said that, “It is a natural law. It bounces back because people and companies eventually find the products and services that will thrive in whatever prevailing circumstances.
No storm, how violent it may be, lasts long. The harsher the storm, the shorter it will be. And if the storm takes you into the deep blue sea, you only get drowned and eaten by the shark if you jump off the boat.”
It may be hard to comprehend ninety percent of the investment jargons. But the winning principle remains: Do not sell when the price is low. Buy shares when the price is low and sell when the price is high.
From the recent book I read, it is stated as: Be the first to buy after the market hit bottom (though I am wondering here how I should know when the unpredictable market already hit bottom). Be the first to sell before the prices decline.
Now, the market is perking up again. The Philippine stock Market is back on the radar screen of foreign investors.
Recently I eyed a certain BPO company in the PSE listing. It just started to open their shares to the public last March 2007, with a good stock value. This is just great!
BPO’s were among the major players in our economy last year. And they are still booming. I am actually planning to start a career in this industry. Or, I may just invest to them. In that way, I can still ride with their success even without groping in the dark.
I am optimistic that 2008 will be another bull market for the Philippines. It may fall sometimes. But it will surely bounce back. It is natural law.
By: Sr. Mary Irene Rafer at January 26, 2008
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