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Why I'd Listen to Warren Buffett About the Current PSEi in Red Over Social Media Naysayers

Business World Online

I was looking at the election results where Ferdinand R. Marcos Jr. and Sara Duterte-Carpio are in the lead. Right now, the Philippine Stock Exchange Index (PSEi) is open but mostly in red. It's very common to see panic such as when the war in Ukraine started (and no, Vladimir Putin isn't investing in Ukraine, he's invading it). It's very easy to get carried by hearsay. However, we need to listen to the experts about stock market crashes and how to maneuver the recent crisis. We need to talk with the experts rather than the gossipmongers on social media such as Twitter and Facebook to get answers.

Learning from Warren Buffett over social media naysayers

One such experienced businessman is Warren Buffett. Buffett himself is a stock market legend. If I keep listening to the naysayers then I get nothing profitable. The Buffalo News reveals Buffett's three reasons not to worry about something like the current PSEi being mostly in red:

1. Investing is a long-term strategy

It's easy to get caught up in the day-to-day market fluctuations, and it can be nerve-wracking when prices start to fall. But one of Warren Buffett's hallmark investing strategies is to buy solid companies and hold them for the long term. 
If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes. -- Warren Buffett
Despite short-term volatility, the stock market has a long history of earning positive average returns over time. Even if the market crashes, there's a very good chance it will recover eventually. By maintaining a long-term outlook and avoiding any knee-jerk reactions to daily fluctuations, your investments have a better chance of recovering from any potential volatility.

2. Downturns can be a smart buying opportunity

While it may sound counterintuitive, market downturns can actually be a great chance to buy more. Stock prices are lower during market dips, meaning you can load up on high-quality investments at a lower cost.

Warren Buffett doesn't fear market crashes and corrections. In fact, he embraces them, taking the opportunity to invest heavily at a discount.
Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble. -- Warren Buffett
Before you buy, though, make sure you can afford to invest right now. You should be caught up on all your bills, and it's also wise to have an emergency fund with at least six months' worth of savings set aside. If your financials are healthy and you have cash to spare, then you can consider investing it to take advantage of the lower prices.

3. Research can help your investments thrive

It's always important to research your investments before you buy, but it's especially critical during periods of volatility. When the market is thriving, even subpar stocks can perform well. But not all stocks can survive downturns, and weaker companies are less likely to rebound.

Before you invest, make sure you're researching the business behind the stock. Strong organizations make for strong investments, and if the company's underlying fundamentals are solid, that stock has a better chance of recovering from a market crash.
We own stocks based upon our expectations about their long-term business performance and not because we view them as vehicles for timely market moves. That point is crucial: Charlie [Munger] and I are not stock-pickers; we are business-pickers. -- Warren Buffett
It's a challenging time right now to be an investor. While nobody knows for certain whether a market crash is on the horizon or not, downturns are not as daunting as they may seem. By keeping Warren Buffett's advice in mind, you can rest easier knowing you're prepared for whatever may happen with the market.
If your report card is mostly in red then that's something to worry about. This isn't an academic report card. We're talking about stock performances here and red means prices are going down. 

My experience with indirect stock handling

Granted, I had so many misconceptions about the stock market so I preferred to use some managed funds such as the index fund. I have opened up a Retail Treasury Bond (for government spending) and Long Term Negotiable Certificate of Deposit (LTNCD) for the past few years. The maturity is still to arrive and I plan to sell them if ever there's a good opportunity. However, I'm just holding on to them for as long as possible. I felt like I didn't have the expertise to handle stocks so I decided to buy AXA Chinese Tycoon. I think this Bill Baker guy on Youtube probably has very little knowledge of what he was buying so he thought it was a "scam". I read through the comments and they didn't realize one thing--premium charges are made to buy insurance just in case. So, if I invest PHP 3,000.02 per month into Chinese tycoon--there's a good chance that some of that money will go to administration fees and premium charges. The amount of money available for withdrawal varies per day based on the price per unit.

The stock market right now is mostly in red. Is it time to really withdraw my AXA? Instead, it would be best to think long-term with my AXA Chinese Tycoon. Right now, I decided to buy some more GInvest due to how low the Net Asset Value Per Unit (NAVPU) has become though not too many since I still need savings. I decided to add more money to the ATRAM Equity Smart Index Fund (which uses diversified stocks from the PSEi) and the ATRAM Global Consumer Trends Feeder Fund. However, I'm still hesitant to put more money into the Philippine Stock Index Fund even when it's down right now. I think it's best I buy and hold my GInvest since I've practically placed money equivalent to one month's worth of salary. GCash is handled by ATRAM managers so I don't have to worry. I may get a trust fee payment but it's better than handling everything myself. Stock market trading still has the brokerage fees, right?

Right now, I even think panic sellers might be my "best friends now". The reason is that some people sell their stocks in a panic without understanding long-term investment. I probably wouldn't get more units to buy if there weren't panic sellers themselves. I think it might be an advantage to financial managers and managed funds too. It would be a good time to buy more funds if there are a lot of people who are panic selling. The panic selling will end up increasing the supply of stocks. If the supply of stocks increases then prices will go low. Some of these include stocks from blue-chip companies in which AXA Chinese Tycoon invests in. 

It would be best for me to hold on to both my AXA (which started last 2018) and to my GInvest funds. It might also be time to get some money any time soon to be invested more into another product. Buffett said dividends are your friends so I might consider investing in ATRAM Global Multi-Asset Income Fund to get some dividends. Small as the dividends are but it could grow any time soon. After all, stocks are still involved in the managed funds. Though, some would prefer to do it hands-on approach or a combination of both would be better. As said, never put all your eggs in one basket. 

References

"3 Reasons Not to Worry About a Stock Market Crash, According to Warren Buffett" by Katie Brockman (March 30, 2022)

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