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Gambling or Investing During This Still Ongoing Bear Market?

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Right now, I decided to monitor the stock market opening and closing almost daily. It looks like the bear market is far from over. I decided to Google "bear market not yet over". This is the latest report from the Philippine Stock Exchange Index (PSEi) website:


The recent observation has some scores in green but the percentage changes are anything but significant. In short, the bear market is still on. It's a good time to buy more stocks (either through DIY or through a stock index fund). The PSEi's overall change is barely one percent. I feel Warren Edward Buffett's excitement right now since it might mean, "I'll probably buy in bulk yet again." In another case, the AXA Chinese Tycoon Fund will end up buying more units per month than it was during the bull market. I would dare say that the bear market is far from over based on the scores. True, they are in green (signifying an increase) but the increase is far from significant. 

This would be a good question to ask. Are you gambling or investing in this bear market? I was thinking of possible reckless moves that people could be doing during the bear market:
  1. Some people may have decided to withdraw their AXA funds to play Axie Infinity thinking it's an "investment" (read here).
  2. Some people may have decided to panic-sell their stocks because the value went down (read here). My assumption is that these people are more on day traders than those who choose to invest long-term (read here).
  3. Some people may have chosen to stop investing altogether (because the values went down) and decide to do gambling instead (read here). 
  4. Some people may have decided to withdraw their investments to transfer them to get rich quick schemes (read here).
  5. Some people may have decided to go with cryptocurrency instead of regular investments. I think these people decided to go for cryptocurrency based on social media gossip (read here).
All the moves above are financially stupid. Yet, the allure of instant riches is always there, right? Sometimes, those who are lured into it are highly intelligent people. That's why Buffett said that temperament plays a better part than intellect. One needs a good temperament to survive this ongoing bear market (read here). One can have straight As but a bad temperament can mislead one into a get rich quick scheme or to move from investing to gambling. Part of this gambling includes day trading which I don't recommend at all (read here). None of the moves I mentioned are investing--only gambling. True, there can be gains but it's very short-term. 

Buffett recommends investing over gambling


Meanwhile, what does it mean to invest during a bear market? It's seeing the opportunities of the stock market. Rather than panic, Buffett says, "If there's blood on the streets, buy stocks." Blood on the streets is an idiomatic expression. The stocks are in red? It's not a sarcastic yehey but a real yehey. There are some stocks from good companies in red. What happens is that it's a perfect buying opportunity to buy in bulk. If one's having a stock fund--a good opportunity for that stock fund to earn more in the long run. 

There's always the option to invest in an index fund. Granted, there's the PHP 8,000.00 rule in investing in stocks. One can always work to start with PHP 1,000.00 and then slowly put more on the same stock. For example, I buy stocks from Jollibee with PHP 2,000.00 during the first month and then PHP 6,000.00 because the bull market got hit by a bear market. Though, Buffett's other advice has been to buy an index fund if you don't want to do all the work in the stock trade. For PHP 8,000.00--I could buy an index containing the Top 30 companies in the PSEi. That would be easier than having to make sure I get a minimum of PHP 8,000.00 per stock to minimize losses. 

What I saw was the sale of the Philippine Smart Equity Index Fund (read here). I pretty much got excited that I decided to reach the PHP 8,000.00 goal and go beyond it. It would be interesting to think about the list of companies invested in the PSEi. So, for every PHP 1,000.00 or higher I plan to add-- I practically buy a basket of stocks per transaction. The top picks would be companies like SM Investments Inc., Ayala Corporation, and JG Summit Holdings. If I continue to put money into it--I'm practically letting the money grow in the long run. This is very different if I decided to play day trading with SM Investments stocks only to risk losing all my money in the long run.

This is the question right now. Are you investing or gambling? If you're gambling then I'm sorry--you're at a loss. In my case, I'd invest and wait. It would be boring but there are other sources of excitement. I can still play games, watch shows, etc. and then monitor investments to see if there's still more room for more units. I guess I can take comfort that when people gamble--it means investors will just invest more for the long-term.

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