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Investing in Stock Market is Not a Sprint, It is a Marathon

I always read this advice from other guru or financial planners that in order to benefit and gain returns from stocks, we should finish the race no matter what. It's not an issue whether you start fast or slow, as long as you reach the finish line. I met a lot of people who do invest their hard-earned money just like what they do in their savings. Remember, when you let your money in the stock market, be ready that it might be wiped out or lost completely. Because, this kind of investment is a lot riskier than these investment vehicles: time deposit, t-bills/bonds (treasury), mutual fund and UITF (Unit Investment Trust Fund). So in order to minimize the risk and take profits, you should equip yourself with the right knowledge (the ins and outs of it).

I also notice that some people decided to put a big chunk of their savings into the stock market, thus, ignoring the principle of Peso-Cost Averaging (I already explained it in this blog post). Doing that will defeat the purpose of buying (blue chip companies only) when the price is low (to accumulate more shares) and selling their shares when the price is high (to gain profits). Also, if you're loyal and faithful to the companies you've invested in, then expect to receive dividends from them (already discussed it here).

People who say and express their hatred on the stock market are those who lost their money from it. Why? Because they did not educate themselves first. As per Chinkee Tan's advice, "Never invest in something that you do not understand no matter how profitable it may be". Why? Because the result is definitely predicted. You will surely lose all your money in an instant.

Invest only your extra money and not your savings (emergency fund, retirement fund and the like) because stock investing will require a longer period of time (most likely 5-10 years). Investing for a long term will help you to get the expected returns. Another reason why I do not encourage older people to put their money into it (people in the prime age like late 40's or early 50's) is due to the chance of losing their money is high and if ever that happens, recovering from losses, given with their age, is difficult. So young people are those who will benefit from it because they have more years in this world. If they get into trouble and make a mistake, they can stand up, learn and continue what they started.

Don't think of it like get-rich-quick scheme or, in other words, easy money because it takes time to earn from it. People are asking me these questions before when I was just starting my investing:

"Is your money doubled?"
"Is it safe to leave your money there?"
"Can I withdraw my money whenever I like?"
and a lot more.

To answer the first question, it's impossible for that thing to happen esp. if you're just investing for a short period of time and then expecting to double your money. Perhaps, what you are referring are those illegal companies who promise you with high returns. Then beware that those companies are most likely to turn into a scam. So be careful when someone offers you a similar business opportunity.

As for the second question, there's no such thing as a safe investment. Even regular savings, time deposits or t-bills/bonds have risk involved because of inflation.

And for the last question, definitely you can get your money but ask yourself first with this question: "Why did I invest my money in stock market if it's just an extra money that I don't need right now?" If that's the case, then you'd better put your money in atm or passbook account because I think, that thing is what you're looking for.

Again I repeat, investing (and not trading) in the stock market is not a sprint, it is a marathon.

Let's get it on!


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