Managing Your Portfolio during Correction

Since the beginning of this year 2015, I am busy reviewing Philippine listed companies as I am shifting or incorporating VALUE INVESTING in my dividend portfolio.

During the initial review, I felt disappointed since the companies that I wanted to buy was overvalued as per my valuation methods. However, Philippine stock market has been going down since the second quarter of this year. Hence, with the market corrections I felt like there were so many bargains out there that many companies were worth picking up. At the same time, a lot of Filipino investors panicked – afraid to lose their hard-earned money.

Yet, not all investors are actually worried. I’m pretty sure, members of the truly rich club are eventually glad that stock prices are falling. Subscribers of PinoyInvestor, may likewise be happy since they can buy now their favorite stocks at a discount.

Different reactions of investors and traders creates confusion about when we will hit the bottom and timing a purchase or a sell. With the markets down and the attempt to recovery, it is always helpful, if not the best to create a plan.

Create a Plan to Avoid Emotional Decisions

It is utmost important to be in control always. Below are some steps to be in control

PortfolioManagementStep 1 – Check your portfolio and evaluate. Do you want to be an investor in those companies? Never mind the current performance of your holdings just evaluate the investment on its worth.

Step 2 – Review your sector allocations as some stocks may have been hit more than others.

Step 3 – Evaluate your options. I am assuming you may want to take advantage of the situation considering that some stocks are at bargain. If you have extra money, consider if you want to add to an existing position or add a new stock to your portfolio.

I would like to leave you with this PSEi monthly chart to put everything in perspective.

PSEi

What can you conclude on this chart?

Are you planning to start accumulating? or Wait until a clear signal is obvious?

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