Taking the casino mindset out of investing

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ONE might think that investing and trading in the stock market would be the fastest way to make money and see it grow as each day passes, but market experts say that’s not always the case.

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Lawrence Lee, vice president of brokerage firm Citisecurities Inc., said that the secret to trading in the stock market is having both short-term and long-term peso cost averaging but taking a long-term mindset.

“The smartest way to trade in the stock market is through long-term peso cost averaging. We want to shift away from the perception of the casino. In the casino, they want you to stay until you run out of money. But in the stock market, the companies you invest in will be able to eventually grow,” Lee said.

Long-term peso cost averaging entails buying into certain stocks on a regular basis—usually when share prices fall—and letting your holdings yield significantly over a long period of time.

Lee hopes that ordinary working-class Filipinos would eventually adopt this long-term mentality if they want to be a winner in the market because “trading short-term requires huge amounts of capital” and is not applicable to retail investors who have just started trading in stocks.

Edmund Lee, president of Citisecurities’ educational arm Caylum Trading Institute, said that the number of retail or independent investors in the Philippines remains low, with just 7 percent of the population trading independently in the stock market.

“In the US, over 50 percent are already trading retail. In Australia, it is about 38 percent and in China, approximately 30 percent to 40 percent. The Philippines is behind with only 7 percent or 700,000 of the total population engaging in retail trading,” he said.

He added that more and more Filipinos should be educated to invest in the stock market and become financially literate so that they can take advantage of the bullish market that is expected the next few years.

“There are more opportunities for Filipinos to grow their finances aside from savings and working hard alone,” Lawrence Lee said.

Returns at the Philippine Stock Exchange index (PSEi) have ranged from 15 percent to 20 percent in the past few years, he said. “What we aspire for in our executive program here at Caylum is to expand investor gains beyond the 15-20 percent returns. So we’re pushing Filipinos to trade actively,” he added.

The newly launched Caylum Trading Institute is offering two courses to train potential investors and brokers to be able to successfully trade in the market.

The two courses include the Recruitment Program, which is the main graduate course of Caylum and stretches to eight weeks, whole day M-W-F, to focus on developing a student’s skills in trading.

The other course, called the Executive Course, is a four-day program held during Saturdays. It is a short lecture series to give students the know-how and basics of proper stock investing.

Caylum Trading Institute was founded by the Lee family in 2013 as a private financial educational institute that focuses on the stock market as a primary tool for financial success. It is under the Citisecurities Group and is also affiliated with listed online brokerage firm COL Financial Group Inc.

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