Trying to Plan Out What to Do as a Bull Market Starts
I was laughing just thinking about ignorance about the bear and bull markets. Yes, we know about social media gossipers (seldom called a marites in Filipino) tend to spread gossip. I ran into several people panicking when the Philippine Stock Exchange Index (PSEi) was mostly red. Others would panic but Warren Edward Buffett recommends, "Be fearful when others are greedy. Be greedy when others are fearful." That's the best market timing. Some people do cost averaging because it's practically less risky in contrast to lump sum investing. Buffett recommends that non-technical people should periodically invest in a low-cost index fund over a period of ten years.
Most stock markets have undergone a dramatic shift to start the year, transitioning from a bear market to a bull market. Peak inflation, a slower pace of interest rate hikes, a reversal in the value of the US dollar, and China’s reopening have attracted investors back to stocks. Note that 74 percent of the 50 countries that compose the MSCI All-Country Weighted Index (ACWI) are already in a bull market. A bullish stock market is defined as a market index rising at least 20 percent from its lows.
Philippine stocks have also entered a bull market, with the PSE Index climbing 25 percent from its October low and the iShares MSCI Philippines ETF (EPHE) rising 33 percent.
The article came out on January 23, 2023, and its recent lunar date is January 1, 2023, in the Lunar Chinese Calendar. I did invest some money into several UITFs such as the ATRAM Philippine Equity Smart Index Fund. I did some cost averaging and a few lump sums during the bear market. When I looked at the bear market, I decided not to listen to the mariteses (and they're probably not even financially healthy) and chose to listen to Buffett. I did buy some units from the ATRAM Consumer Trends fund and the ATRAM Technology Fund since America was also hit by the bull market. Now, it's time to hold.
Back then, I was scared of stock trading because of stock market losses. It turns out that such people were doing day trading instead of long-term investments. Some people end up buying stocks from companies with questionable records such as high debts. Meanwhile, the alternative is getting a low-cost equity fund (though some are slightly higher due to some active fees). A Philippine stock index fund would mean investing in the Top 30 best companies in the country. That means I get Jollibee, Ayala, SM, Gokongwei, and Globe in that portfolio.
Should I just sell my index fund yet? In my case, I want to do some long-term as it has helped curb my spendthrift tendencies (read the article here). That's why I continued with the AXA Chinese Tycoon Fund. It's because I want to focus on time in the stock market over timing the stock market. The only good market timing is what Buffett says, "Be greedy when others are fearful. Be fearful when others are greedy." It's like buying a lot of devalued stocks from good companies either by direct picking or focusing on an equity fund. Meanwhile, I was thinking maybe I should cost the average instead into the index fund (PHP 1,000 per month) for another 12 months while waiting for a bigger index score. Though, I could pull out some of the investments (when the NAVPU gets higher) while maintaining cost averaging to a single (or another) index fund.
Yet, it doesn't mean I can't do some "short-term" equity investing. Maybe, I could sell some funds when their NAVPU gets higher due to the stock performance. Maybe, I can profit from the bear-to-bull market (though better wait for a higher score) one way or another. But as Buffett would say, patience is key in stock market profits (read the article here).
