A business blog by an MBA graduate who's currently no longer interested in getting a Ph.D. This blog aims to share insights into the business world such as investments, economic policies, and more. Feel free to poke around, and learn more about what I have and want to say.
My Thoughts on the Misunderstood PHP 8,000.00 Rule in Stock Investments
Get link
Facebook
X
Pinterest
Email
Other Apps
-
I think one of the most misunderstood rules is the PHP 8,000.00 rule. One reason why I decided to reach at least PHP 8,000.00 for my three GInvest funds (ATRAM Global Consumer Trends Feeder Fund, ATRAM Global Technology Feeder Fund, and the Philippine Equity Smart Index Fund) is because of that rule. Though, some people tend to misinterpret it that they shouldn't enter the stock market (in any way either through DIY trading or buying an index fund) until they have PHP 8,000.00. Personally, I took advantage of GInvest's minimum start-up for the local fund (start with PHP 50.00 but it's not going to grow big with just that) and the feeder funds with PHP 1,000.00 each. What I did (instead) was to slowly invest money until the minimum was met.
Why do I feel waiting until you have PHP 8,000.00 before you invest in a bad rule? The fees are there, yes, but you may not be able to take advantage of the low dips. The market is rather unpredictable with the supply and demand. Stocks get affected by company performance, economic performance, industry performance, and public sentiments. Instead, some people suggest doing cost averaging which is to invest the same amount per month.
The NAVPU goes higher or lower per month. Instead, beginners may want to try these two alternatives to reach a minimum of PHP 8,000.00 before adding more than that:
The first rule may be to invest PHP 1,000.00 for eight months.
The second rule may be to invest PHP 2,000.00 for four months.
The third rule may be to invest PHP 4,000.00 for two months.
Of course, I don't say to stop with PHP 8,000.00. Instead, it would be ideal to maintain PHP 8,000.00 for the purchase of a certain stock (for direct trading) or for the purchase of indexes and feeder funds. In my case, I prefer the use of the index fund (and it's Warren Edward Buffett's advice to most investors) and the feeder funds for global stocks. The idea is to try and reach PHP 8,000.00 within with three timeframes that I've mentioned. This is called cost averaging in order to minimize losses. I think waiting until you have PHP 8,000.00 then buying a stock or a stock index that amount during a bull market isn't very advisable. Sure, it's not wrong to buy stocks during a bull market. However, it's very risky to purchase by bulks during a bull market in contrast to a bear market.
For beginners, just think if you bought PHP 1,000.00 for eight months (or PHP 2,000.00 for four months) during a bull market. This would mean minimizing risks for those eight months. Then a bear market strikes and you start investing higher beyond the PHP 8,000.00 that was achieved. The bull market is still subject to lower performances so one may get more units during a bull market. In short, more units are bought when the NAVPU is down. Meanwhile, the bear market would mean getting even more units per PHP 1,000.00 purchased. The risk is rather minimized. Meanwhile, it might be a wise decision to purchase more shares during a dip (but only use the money you don't need now) than to remain investing the same amount. Though, some prefer cost-averaging since it tends to minimize risk. I tend to do a mixture of value averaging and cost averaging.
Though, it's much easier to invest PHP 8,000.00 rule in a wide array of portfolios
It's also right to invest PHP 8,000.00 immediately during a dip. Granted, my access to Philippine-based stocks isn't just my AXA Chinese Tycoon Fund (which uses PHP 3,000.02 regardless of bear or bull, read more here) but also my recent purchase of the Philippine Equity Stock Index Fund (read here). Let's say I decided to invest PHP 8,000.00 immediately in an index fund than individual stocks (which can be a burden for some). This PHP 8,000.00 will be allocated to the Top 30 companies that are in the Philippine Stock Exchange Index (PSEi). It would be interesting to know that you get a basket of stocks from companies like SM Investments, SM Prime Holdings, Banco De Oro (BDO), Ayala Corporation, PLDT, BPI, JG Summit Holdings, and Meralco to name a few out of the 30 companies listed.
One issue I have with direct stock trading is that it's not recommended by Buffett for most investors. Some people do prefer the direct trading approach (where they select their portfolio to buy and hold for some time). However, I prefer the equity fund approach (such as the index fund and feeder fund) to avoid having to do that much research. I think it can be tiresome if I have to slowly choose to invest PHP 1,000.00 until it reaches at least PHP 8,000.00 with one company and then choose the next. It might also mean that I'll have to reach PHP 8,000.00 for each company I'm investing in. Meanwhile, I think spending PHP 8,000.00 immediately over a diverse list can be a better idea. It's because the PHP 8,000.00 will be allocated like this:
SM Prime Holdings (13.2%) -- PHP 1,056.00
SM Prime Holdings (11.1%) -- PHP 888.00
International Services Container Inc. (7.2%) -- PHP 576.00
BDO Unibank Inc. (7.1%) -- PHP 568.00
Ayala Land Inc. (6.9%) -- PHP 552.00
Ayala Corp. (6.4%) -- PHP 512.00
PLDT (6.0%) -- PHP 480.00
BPI (7.0%) -- PHP 560.00
JG Summit Holdings Inc. (4.3%) -- PHP 344.00
Meralco (3.3%) -- PHP 264.00
It all gets allocated into several funds in one basket. It would be easier to apply the PHP 8,000.00 rule with a basket of stocks than to individual stocks. Though, those who are better are more comfortable applying the PHP 8,000.00 rule across various stocks. Personally, I think I'd take the side with the majority in Buffett's advice. I don't intend to stop with PHP 8,000.00 for all three investments. In fact, I placed more than PHP 8,000.00 in my Philippine Equity Smart Index Fund. I want to put more into the feeder funds I just bought but they're not in a dip. So, it might be wise to simply allocate PHP 1,000.00 each until it reaches another certain amount. I'm not going to spill out the final amount either for confidential reasons.
Bombo Radyo Cebu Today is National Heroes Day 2025. Why do I feel that Buwan ng Wika (National Language Month), alternatively called Buwan ng Kasaysayan (National History Month), has been used to justify the Filipino First Policy, which caused the Philippines to fail? Some time ago, and it wasn't Buwan ng Wika, I actually wrote an entry begging Filipinos to abandon the thought that foreign investors are foreign invaders . Whether we want to admit it or not, even the meaning of the words investor and invader are too different. A simple dictionary definition would show that investor and invader are two different words . An investor is "a person or group of people that puts its money into a business or other organization in order to make a profit:", according to the Cambridge Dictionary . Meanwhile, the Cambridge Dictionary defines invader as "an army or country that uses force to enter and take control of another country:". Big difference! Get more dictionaries ...
I wrote a post where I discussed whether or not Alice Guo (and I heard her real name is supposedly Guo Hua Ping) should be a reason to say "No to economic charter change." A certain idiot I've dubbed Porky Madugo even wrote this on his Facebook account: Back on topic, I would like to emphasize that the Filipino First Policy may actually be encouraging dummy investors instead of discouraging them. Some people may use Alice to say, "See, I told you so, you (insert demeaning name)! If Alice can enter so easily, what about we allow 100% FDI and China buy us all!" That's the logic of that certain Porky Madugo, whose name and picture I blocked, despite my immense dislike for his stupidity. If Alice has been faking it by lying she's a Filipino citizen (and sadly, this incident has been used to justify hatred against Chinese Filipinos), then the real root cause is this. The Filipino First Policy makes it too difficult for foreigners to do business in the Phili...
Philippine Anti-Fascist League Above is a meme found on Facebook that I'd dare say reflect epic levels of ignorance. The picture above represents the Spanish conquest of the Philippines. The Philippines was under the Spanish Empire for nearly 300 years. The Philippines gained independence from Spain on June 12, 1898, and from the United States of America (USA) on July 12, 1948. Basic Philippine history has proven that the natives of the Philippines (before being called Filipinos) have been trading with various foreigners before colonization. The Chinese traded with Filipino natives before they were dubbed Filipinos. Did the Chinese Emperor or the Chinese Empire ever have control over the Philippines because of trading? There is no history in China where the Philippines was once a colony of China before Spain took it over. The Chinese merchants were only interested in trading, not conquering, the 7,107 islands that were later collectively named the Philippines after King Philip of...
Art by Hugo Yunzon It's finally August or Buwan Ng Wika (Month of the Language), though it may be better to call it Buwan Ng Kultura (Month of the Culture). Buwan Ng Wika programs tend to focus more on the uniqueness of several types of Filipino people. What I recall back in my high school days (late 1990s) is how I was asked to play an "American" in a Buwan Ng Wika program. There were also other people asked to portray the Chinese traders, Arab traders, Indian traders, and the Japanese occupation. It would be good to do a review of the pre-colonial Philippines. The name Philippines was derived from the Spanish king, King Philip. Back then, the natives were called Indios which sounds very similar to Indonesia . Yes, most Filipinos are either Malay or Indo. A look at the Indonesians and Malaysians would have one mistake them for Filipinos. A note is that the Chinese population there usually speaks Hokkien. From Purdue Filpino --here's some basic information about Fili...
Washington Times It's really entertaining (while it can also be frustrating ) dealing with economic neanderthals from my own country. Such people operate on what I call "Pinoy Pride Economics", never mind its high socio-economic post (read here ). I ended up remembering the now-defunct Philippine Anti-Fascist League old page (and the new page is barely getting any views), which I believe is run by a group of Gen-Z brats blaming the USA for Venezuela's plight. I went Googling and found out that six years ago, President Nicolas Maduro showed he might be the champion of blaming other countries for his own country's poverty. This incident was a massive blackout that hit Venezuela in 2019 . The news from CNN gives this detail why Maduro might win any blame contest if there was one: As the March outages left the country in the dark, Caracas saw dueling protests by supporters of Maduro and of opposition leader Juan Guaidó, who has been recognized as Venezuela’s interi...
I advocate for helping others. I believe in helping others but there were times I overdid it. One time, I gave up so much that I had to be stopped. I was told, "If you gave everything now, how can you help others later?" I would donate some sums here and there, without thinking much. I'm not going to write them all. Some of them left me good while others left a bad taste (and a bad record) for me to endure. Sure, I want to help people but I tend to overlook the consequences. Some of the bad habits I had in the name of helping others are like: Being too generous with buying with credit. Eventually, I lost a lot of money which was never recovered . Some seasoned entrepreneurs may admit their own falls including the credit trap pitfall. Being too willing to give a discount without thinking about how it'd affect profits. Sure, a cheap price can draw people near. However, there are times when the prices of goods and services need to be raised to keep a business running. I ...
Make no mistake that I didn't vote for Robin Padilla. I feel like I've had enough of voting for celebrities, athletes, and those who I felt are know-nothings in the legislative. However, Padilla recently had his proposal to remove the 60-40 restrictions regarding foreign direct investments (FDIs) . Former Philippine Vice President Maria Leonor "Leni" Gerona-Robredo was even in favor of that amendment. I guess that's why Philippine economist Andrew James Masigan endorsed Robredo. I may have not endorsed Robredo while Masigan remains to be one of my favorite local sources. The news from GMA News Online reveals these plans by Padilla himself: Senator Robin Padilla said he wanted to revise the Constitution to scrap the 60-40 rule on foreign ownership of businesses to accelerate job creation and competition among industries . In a Monday interview, Padilla said the move would attract more foreign investments to support the country’s economic recovery. “Para sa akin mas...
I remembered Chatime became my first favorite tea franchise. Sure, there was Moonleaf near the University of San Carlos-Main Campus (USC-Main) which I wonder if it's still open now. Though, Chatime quickly became my personal favorite for a reason. The one I'm most familiar with is the branch in I.T Park which quickly became my after-meal beverage at times. Chatime is a worldwide franchise' in the Philippine business environment Chatime's history is described as follows by U-Franchise which I'll give an excerpt: Since 2005, Chatime franchise has been serving millions of customers with their favorite cup of tea, making it part of every occasion, celebration or simply cupping a busy day at work. Chatime was founded in Taiwan in 2005 and in 2011 opened its doors in the Philippines. With a commitment to a quality of ingredients and mix-ins and a flare for innovative flavor combinations, we set out to brew nothing but the very best bubble teas. Chatime has now opened mor...
One of the greatest news for the Philippines is the Public Service Act of 2022. The following can be read from the Philippine News Agency regarding President Rodrigo R. Duterte's signing of the new law into action: President Rodrigo Roa Duterte on Monday signed into law a measure amending the Public Service Act (PSA), allowing up to 100 percent foreign ownership of public services in the country. Republic Act (RA) No. 11659 or "An Act Amending Commonwealth Act No. 146 otherwise known as the Public Service Act” as amended was signed by Duterte in a ceremony at the Rizal Hall, Malacañan Palace in the presence of lawmakers and other officials. Under the amended PSA, the telecommunications, railways, expressways, airports, and shipping industries will be considered public services, allowing up to 100 percent foreign ownership in these sectors. Duterte also led the ceremonial presentation of newly enacted laws namely RA 11647 which amends the Foreign Investments Act; RA 11650, whic...
The decades of Filipino First Policy really need a clean-up, right? It's really amazing how some people keep blaming the US for Venezuela's current situation. What's next? Will they blame China and South Korea for North Korea being poor? I wrote an article where I discussed Venezuela's pride and protectionism . One of the many sources I cited discussed how frequent blackouts caused Venezuelans to eat rotten meat last 2018 . Are they going to well, blame the USA again , for the frequent blackouts? If Venezuela's basic utilities are all monopolized by the government--how can they blame the US for the crisis that Venezuela caused itself? Did the US tell Venezuela to do its really bad economic policies? I would read the comments made by SJWs on Facebook. They would write all forms of anti-capitalist rants without understanding what capitalism is. They say that competition ruins quality and that things will be better under a welfare state. The video above shows a sample ...
Comments
Post a Comment