Author: Investa

Being able to save money is the very first step you need to take if you want to improve your financial situation. Here are five saving tips you shouldn’t miss out on!

1. Keep track of your money

Among the different saving tips, this is the most important. No matter how good you think you are at keeping track of things mentally, you still need to list down your savings and expenses somewhere. Often times people who don’t keep track of their money tend to overestimate their financial standing. Furthermore, these are the people who are usually unable to save. Since expenses aren’t being tracked, they can often eat away at the money supposedly set aside for savings. 

By regularly monitoring your savings and expenses, you’ll be more aware of how you currently stand financially. In fact, this will also help you better understand your own money habits. You’ll be able to figure out why you usually spend more than you should, and how you can make an adjustment. Always remember that you can’t improve what you don’t keep track of.

2. Start even with just a small amount

Starting to save even with a small amount at first can have a big impact. Of the different saving tips, this can be one of the easiest to start. It can help you establish the habit of saving and can let you become more responsible financially. When you make the conscious effort to save even a small portion, you begin to develop financial discipline. The amount might be small at first, but as time goes on the discipline you gain will help prepare you for when you are able to earn more per month.

3. Use the 3-day rule

Have you ever made a purchase before, only to realize you really didn’t need it? This is where the 3-day rule comes in. This is when you intentionally wait for three days before making a purchase, especially for non-essentials. This strategy works by helping you avoid impulsive purchases. 

It’s important to treat oneself from time to time. We still need to enjoy life even as we work hard towards our goals. However, we can’t just spend all of our money on enjoyment. As we budget our money for non-essentials, the 3-day rule will help us make the most out of it. While you wait before making the purchase, try to think of the use case scenarios the purchase will help you with. If you feel that it will make you happy for a long time and it’s within your budget, then go for it. If not, then it might be worth holding off on the purchase. 

4. Automate how you budget

This saving tip might not be common, but it can also provide a big impact. Whenever you can, try to automate different parts of your cash flow. For example, if you have bills to pay, try to set up an automatic payment system if your debit or credit card allows for it. If your company has an auto-invest program, it might be worthwhile to enroll in it since it will help you invest hassle-free. 

Willpower is a scarce resource. While we need to put in effort to become financially responsible, it’s always better to have a system that makes things easier. Bestselling author David Bach captured this by saying that people sometimes fail to budget because “You’re too busy, and you will just get frustrated and fail.” Experiment with the different features your banks and cards have, and try to make a system that makes budgeting seamless for you.

(P.S. If your company wants to conduct an auto-invest program for its employees, feel free to reach out to us!)

5. Spend more on quality

When people try to save, looking for cheap alternatives is a common way to save more money. However, sometimes paying up a bit more for a better quality product can sometimes be the wiser financial decision. For one, higher quality products sometimes last longer than cheaper ones. A 10-peso ballpen is far cheaper than a 50-peso one. But, if the cheaper one only lasts a week while the 50-peso one lasts for a year, then the more expensive option will actually be more worth it to buy. Always remember that in order to save the most amount of money, you have to be wise with every decision.

How long will it take to reach financial freedom?

Different people have different circumstances. It’s important to remember that you should focus on yourself. The road to financial freedom might be easy for some, and hard for others. Just remember that no matter how long or hard things get, the end goal will always be worth it.

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This course is especially catered for all the newbies in the market who would like to take their trading up a notch by diving into global markets.

For those unaware, Filipinos have their own unique way of saving money. Paluwagan is an informal way of saving as a group. It works based on the trust of each member of the group, usually consisting of at least three people. The participants will pool their funds and will receive lump-sum payouts based on a set interval.

While the practice is unregulated, a financial inclusion survey from the BSP shows that 14.8% of households save their money through paluwagan. Throughout the years, it remains an easy way for Filipinos to become financially responsible while also fostering camaraderie with each other. Even though this is a very simple way to start saving, the more important thing to remember is that it helps people get started.

“Saving a small amount soon builds up to a large amount”

How Paluwagan Works

As mentioned, Paluwagan requires at least 3 people to participate. These people would need to set rules such as 

1. How much the contributions should be
2. When their contributions should be scheduled
3. Who will receive their payouts first, and lastly
4. Who will handle the funds

To give fully showcase how this works, it might be best to explain it through a story:

Jobert, Anne, and Miguel all decided that they want to make a Paluwagan group among themselves. They set that each member will contribute PHP500 every Monday. The payout will be on Fridays, with the order of recipients being Jobert, Anne, then lastly Miguel. Anne volunteers to handle the funds for the group.

With that, on the first Monday, everyone contributes PHP500 with Anne safekeeping the funds. On the first Friday, Jobert will receive PHP1,500 as his payout. Then on the second Monday, everyone will give their contributions again. This time, Anne will receive the PHP1,500 payout on the 2nd Friday. This cycle will continue until each person receives PHP1,500. At the end of the cycle, it’s up to them if they want to do another cycle or if they should stop.

Pros and Cons

One of the main benefits of paluwagan is that it is an inclusive practice. Since the participants themselves set how much contributions can be, low-income households are able to join.

Depending on how strict the group is, the practice also allows Filipinos to benefit from a framework that makes it easier to be responsible with their money. Rather than having to discipline oneself alone, paluwagan creates an accountability group between the participants. Everyone aims to push each other to save since the fault of one will adversely affect others.

On the other hand, the main disadvantage of paluwagan is that fraudulence could happen. Especially if the group isn’t tight-knit, some members could suddenly disappear the moment they receive their share. Since this is just done informally and usually with no written agreements, money could be lost if some members aren’t trustworthy.

Also, since the money is circulated between members, interest isn’t earned. However, some banks have already started providing group-savings accounts that could help with this. The participants would just need to talk about how they will manage the account, and the money that comes in.

Final Thoughts

For those seeking to enhance their finances, Paluwagan can be an appealing option. However, it’s important to take precautions and make wise choices. Making sure the members are trustworthy should be prioritized. Utilizing different tools to keep track of contributions, and even making use of what digital banks offer could be a great way of improving the experience as well.

Overall the practice should be seen as a first step towards financial freedom. Once you’ve got the habit of saving down, it’s important as well to learn how to make your money work for you.

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This course is especially catered for all the newbies in the market who would like to take their trading up a notch by diving into global markets.

This week’s featured trader is @jprado as he spotted a solid trade in $PCOR! As his technical indicators started pointing upward, he was able to tell that there was an opportunity present.

Trading the ascending triangle became a viable option given that the RSI and MACD were giving bullish signs. From there, it was as simple as taking an entry, setting a TP, and making sure to set a cut loss on the break of the market structure – something @jprado clearly stated.

TECHNICALS OF THE TRADE

There were 4 main indicators present in the analysis from @jprado. He made use of the Bollinger Bands, RSI, Moving Averages, and the MACD.

Bollinger bands and moving averages are similar to each other in that they track trends. However, the former has the added function of tracking price volatility. When used together, the Bollinger band can be used as a visual indicator to see if volatility is either contracting or expanding.

It might have not been clear on the weekly chart, but if you check the daily charts, the indicator was able to show that volatility was dying down. A common sign before big moves happen.

The RSI keeps track of a stock’s underlying strength by taking into account price changes and the speed of the price change. While prices consolidated for a rather long time, momentum wasn’t dying down given that prices firmly held above 3.30. The RSI picked this up and was showing that momentum was still strong, giving constant readings above 60 on the weekly chart.

Lastly, the MACD was also used to tell if the consolidation was nearing its end. Another typical behavior of consolidations is that the MACD tends to slope downwards. Usually, big moves happens when ample time is given for profit takers to get out of the market. The indicator can sometimes be used to keep track of that by checking to see how close it has gotten back to 0.

FUNDAMENTALS OF THE TRADE

Petron Corp. is a company involved in oil refining and marketing, offering customer solutions in the energy sector and related industries. The company’s operations are categorized into various segments, namely Petroleum, Insurance, Leasing, Marketing, and Others.

As the pandemic saw motorists travel less, the company saw some hardships. However, as the economy continues to recover, Petron is poised to bounce back. Revenues have already started to recover strongly, with net income expected to follow suit in the future.

Check this out if you want to learn more about Petron. 

WHAT SHOULD BE MY NEXT MOVE

Currently, $PCOR has already rallied well above breakout levels. While there’s still some upside remaining, the risk-reward for traders just looking to get into the stock isn’t great. It would be best to wait for a new consolidation. The best case would be if prices consolidate after testing the 5 peso resistance, since a breakout from there would indicate that prices could head towards a farther target price. 

Once again, KUDOS to @jprados for being this week’s featured trader! Enjoy your 14-day InvestaPrime Access and continue to be an inspiration to the trading community.

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We’ve covered the basics of technical analysis previously, and we’ve even discussed how to use some indicators. As you progress in your trading journey, you’ll undoubtedly learn more indicators along the way. This begs the question, how do use the knowledge you gained to improve your trades?

Usually, people depict professional trading as using a big slew of indicators. Price charts filled to the brim with oscillators, bars, and others. However, something you’ll learn through experience is that you don’t need to know each one. You don’t even need to use all of the technical indicators you know. The more important aspect is your EFFICACY when using technical indicators.

“I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.”

– Bruce Lee

What are indicators and what’s their purpose?

Trading indicators are tools used to analyze the price movement of assets. They are based on calculations based on how prices behave. What’s important to note here is that they are always derived from price action. They mainly serve as heuristics for traders to understand price movements faster. 

As such, using technical indicators is bound to how you analyze price action. If you use momentum indicators, you should have a good grasp of how momentum plays out in the markets to make full use of the indicators. Otherwise, you’re no longer trading the stock’s chart. You’re already trading the indicator itself which could lead to worse performance. 

Deep diving into some technical indicators

MACD

The MACD is a popular technical indicator that keeps track of momentum. What many don’t know is that the MACD itself is only one line. 

The other things that commonly load with the MACD are the signal line and the bars. While it has become a popular strategy to buy and sell whenever the MACD crosses above or below the signal line, this doesn’t fully encapsulate the use of the MACD.

In essence, the technical indicator works by tracking the distance between two moving averages of different time frames. When momentum is strong, short-term moving averages tend to rise faster than long-term moving averages. The MACD captures this by rising as well. On the other hand, when prices consolidate after a strong rally, the moving averages tend to coil together. This often signifies that profit takers are exiting the market. The MACD tends to slope downward closer to zero when it happens.

The MACD buy/sell signal can be a viable strategy. However, it doesn’t do the indicator justice if it’s only used in that way, especially if the underlying market dynamic behind the signal isn’t understood. There are many ways to use the MACD as a tool to keep track of momentum. All you have to do is to try and understand how it tries to encapsulate certain market behaviors.

RSI

The RSI is another popular technical indicator among traders. Like the MACD, it keeps track of momentum. The difference is that it bases readings on the speed and change of price action. It does so by creating a ratio between the average gains and losses for a certain period, then turning it into a scale from 1 to 100. 

One common way to use this is to identify readings above 70 as overbought and below 30 as oversold. While this holds true, only using the RSI for this purpose would be a crude way of using it. You need to understand that during uptrends, the RSI will tend to go and sometimes stay at overbought levels. On the flip side, the RSI will also tend to stay at oversold levels during downtrends.

The key thing to remember when studying the RSI is that it keeps track of the speed and change of price action. The market tends to move in waves. When there’s a disruption in how strong prices are going in one direction, this can be inferred as a very early signal that the tides may turn. Hence, the use of RSI divergences for reversal plays. 

Likewise, RSI consistently at high or low levels signifies the dominance of either buyers or sellers. Many professional traders tend to use this as a tool to screen for trades. Since the trend is your friend, it makes sense that you’d buy those that don’t have low RSI readings.

Different indicators have different nuances. There is usually more than one way to use an indicator other than what is commonly taught. By extensively studying how a technical indicator is derived, you can get a better understanding of how an indicator can help you analyze the markets.

Moving forward

If you want to get better at using indicators, make sure to focus on QUALITY OVER QUANTITY. Focus first on getting a better grasp of market behaviors. Then, try to understand deeply how indicators work and how they can be used in tandem with your price action analysis. 

Check out our different lessons. From educational videos to articles, we provide knowledge applicable to traders of different levels. All it takes to get better as a trader is to put in the work and do so with fervor. 

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This week’s featured trader is @probabilitypilot! He was able to find an accurate entry as $EEI was continuing its rally.

Elegant and simple, he was able to figure out at what point the stock was in the Elliot Wave cycle. Through confluences with the use of moving averages, a precis entry was found.

Let’s take a look at how @probabilitypilot analyzed the high-flying $EEI.

ANALYSIS FROM @probabilitypilot

During the time of his post, $EEI was one of the high-flying names in the local stock market. Prices strongly broke out of a bottom, reaching gains of 100% in only a matter of days. Given that momentum was very strong, prices only made a shallow consolidation – barely even reaching the 10-day EMA. As demand was shown to be strong, it made sense for traders to look for a momentum play in the intraday charts. 

@probabilitypilot did just that and created an intraday count in order to try and forecast the scenarios that might happen. By formulating both a bullish and bearish case, he would be ready for anything that happened to the stock. The analysis was spot-on. Based on the levels provided, traders who attempted the same trade would now have already gained more than 18%!

TECHNICALS OF THE TRADE

The most noticeable part of @probabilitypilot’s analysis has to be his Elliot Wave count of $EEI’s intraday chart. While most people usually employ wave counting to long-term charts to gauge an asset’s general movement, he used wave counting as a means to make micro decisions. Tied in with confluences using moving averages, and he got himself a solid thesis for a trade.

Generally, Elliot Wave counting is a technique used to try and predict the price movements of stocks. The whole theory is based on the idea that prices don’t go in straight lines – they tend to move in waves. Oftentimes, there are motive waves which tells you what the general trend is. There are also corrective waves wherein prices correct or pull-back. By identifying and labeling the different waves, you can work towards a deeper understanding of what the market’s current position is. When used in conjunction with other TA tools, this can become a powerful way of finding and executing trades.

FUNDAMENTALS OF THE TRADE

EEI is local company that provides construction services and supplies manpower both domestically and internationally. Specifically, it specializes in the installation and construction of power generating facilities, oil refineries, food and beverage manufacturing facilities, assembly plants, and many more. 

While the pandemic was hard on the company as most economic activity died down, the lifting of lockdowns and revival of the economy was enough to help EEI get back on its toes. With the resurgence of its cash inflows, the company recently announced that it’s giving out a whopping 5.76% dividend for the quarter. Although bottom-line numbers have yet to turn positive, the dividends are a big sign that the company is heading towards the right direction.

WHAT SHOULD BE YOUR NEXT MOVE

Currently, $EEI prices still continue to rise. If you’re just looking to get into the stock now, it might be best to wait for the pullback. Momentum is currently strong, but as always the market moves in waves. Given that the rally has already overextended, the risk-reward for entries right now is currently low. However, if you already bought shares of the company previously, make sure to trail your stops and to follow your plans for selling closely.

Once again, KUDOS to @probabilitypilot for being this week’s featured trader! Enjoy your 14-day InvestaPrime Access, and continue to be an inspiration to the trading community.

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This week’s featured trader is Jef, also known as @zat0ichi, who is highlighted for using Support and Resistance (S/R) to create a clean and well-organized setup on $MER.

As stated by Nial Fuller, “Support and Resistance are the foundation of technical analysis.” 

Let’s take a look at how @zat0ichi used this indicator to his advantage!

ANALYSIS FROM @ZAT0ICHI

What can be seen from the chart is that $MER is currently ranging from the 297 and 319 levels. @zat0ichi utilizes $MER’s local support and resistance to establish clean entry and exit zones for his trade setup. He has a stop loss set under the 297 level, as it indicates that the price might continue going down. He also states that he is bullish at the 319 level, as a breakthrough through this resistance may connotate a surge in price. Lastly, he has a take-profit level established at the 337 level, the nearest most established resistance. 

At the time of his post, $MER is at the 319 level. The stock rallied subsequent days later and hit its take profit at the 337 level 10 days later for a profit of around 5.5%. The stock also continued to rally until finally peaking at 339, which would have increased by about 6%.

However, the price is currently witnessing a pullback after its recent surge, meaning that @zat0ichi’s disciplined profit-taking at the 337 level not only secures profit but also allows him to reposition his setup after $MER’s most recent movements. 

TECHNICALS OF THE TRADE

Thanks to @zat0ichi’s brilliant usage of support and resistance levels, he was able to execute a clean entry and exit on $MER.

In trading, support and resistance are price levels at which a stock or other asset will likely face buying or selling pressure.

Support is a price level at which demand for a stock is strong enough to keep it from falling lower. It is the price at which buyers are most likely to join the market and acquire the asset, causing the price to stop declining and reverse direction. Support levels are frequently determined by reviewing historical price charts and looking for price levels where the asset has previously rallied back up.

In contrast, resistance is a price level at which the supply for an item is strong enough to prevent the price from increasing. It is the price at which sellers are most likely to enter the market and sell the asset, causing the price to stall and reverse direction. Resistance levels may also be determined by looking at past price charts and searching for price levels the asset previously failed to break through.

Traders frequently use support and resistance levels to identify probable entry and exit positions for trades and construct stop-loss and profit goal orders. When the price of an asset approaches a support or resistance level, traders may look for confirmation signals, such as candlestick patterns or indicators that indicate a potential breakout or reversal, to enter or exit trades.

FUNDAMENTALS OF THE TRADE

Meralco, the Manila Electric Company, has reported a 40% increase in consolidated core net income to P9 billion in the first quarter of 2023, up from P6.4 billion in the same period last year. This growth was primarily driven by a significant increase in power generation contribution, which tripled compared to the same period last year. 

Meanwhile, consolidated reported net income increased by 26% to P8.1 billion in the first quarter of 2023, up from P6.4 billion in the same quarter of 2022. Meralco President and CEO Ray C. Espinosa attributes the growth in energy sales volume to the strong performance of the commercial segment, indicating that public confidence has returned and power demand will continue to increase. 

Meralco Chairman, Manuel V. Pangilinan, commented that the company’s operational and financial performance in the first quarter of 2023 indicates a good start and that they will pursue strategic energy sourcing activities for their medium- and long-term requirements to ensure sufficient and cost-competitive power for their customers.

WHAT SHOULD BE YOUR NEXT MOVE

After its recent increase in price, $MER is currently witnessing a pullback. A pullback in a stock’s price could be a sign of weakness or a temporary market correction, which means that traders must be patient and wait for a confirmation signal before making a trade.

One potential strategy traders could use to wait for the stock’s price to stabilize and begin to trend upward before entering a long position. This could involve waiting for the stock’s price to bounce off a support level or for a bullish candlestick pattern to form.

It is advisable to use additional indicators to confirm the direction of the stock after a recent pullback. This enables traders to make informed decisions that are supported by multiple indicators.

Once again, KUDOS to @zat0ichi for being this week’s featured trader! Enjoy your 14-day InvestaPrime Access, and continue to be an inspiration to the trading community.

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Real Estate Investment Trusts or REITs are investment vehicles that allow individuals to invest in real estate assets. They generate rental income, capital appreciation, and interest income from mortgages. Investing in REITs in the Philippines has become more accessible for individual investors in recent years. It can be a great way to diversify your investment portfolio while earning passive income.

In this article, we will provide a comprehensive guide on how to start investing in REITs in the Philippines. 

Understanding REITs

Before investing in REITs, it’s essential to understand what they are, how they work, and how they generate income. A REIT is a company that owns and operates income-generating real estate properties. By law, a REIT must distribute at least 90% of its taxable income to shareholders as dividends. This makes investing in them an attractive investment for passive income.

Different REIT types exist, namely equity, mortgage, and hybrid. Equity REITs own and operate income-generating real estate properties, while mortgage REITs invest in real estate mortgages. Hybrid REITs combine the features of both equity and mortgage types/

As mentioned, these investments generate rental income, capital appreciation, and mortgage interest income. Rental income is generated from leasing out properties, while capital appreciation is earned through increased property value over time. Interest income is generated from mortgages that the REITs hold. It’s important to note that REITs’ income streams can vary depending on the type and their properties.

Choosing the REIT to fit for you

Choosing the suitable REIT to invest in is crucial in maximizing your returns and minimizing risks. Here are some factors to consider

1. Financial performance – Review the REITs’ financial statements, including income statements, balance sheets, and cash flow statements. This is to evaluate their financial health and performance.
2. Property portfolio – Analyze the quality, location, and types of properties in the REITs’ portfolio. This is in order to assess their potential for generating income and appreciation.
3. Dividend history – Check the REITs’ dividend history to determine their dividend payout stability and growth potential.
4. Market conditions – Consider the current and expected market conditions, including interest rates and economic indicators. This will aid you in evaluating the REITs’ growth potential and risks.
5. Regulatory compliance: Ensure the REITs comply with the Philippine Securities and Exchange Commission (SEC) regulatory requirements and standards.

Considering these factors, you can choose the REITs that align with your investment goals and risk tolerance. It also allows you to maximize your returns while minimizing risks. 

To know more about REITs and their performance, dividend yields, and price, you can check out the Investa Screener or the Investa homepage to make finding these REITs easier.

Steps to start investing in REITs

Here are the steps to get started investing in REITs.

1. Choose a stockbroker – Look for a reputable and licensed stockbroker that offers access to REITs in the Philippine Stock Exchange (PSE). Do your research and compare their fees, services, and reputation.
2. Open a stock trading account – Once you have chosen a stockbroker, you must open a stock trading account with them. Provide documents such as IDs, proof of billing, and other requirements.
3. Fund your account – You need to fund your account with the minimum required amount. You can use online banking or visit the stockbroker’s office to deposit money.
4. Find your REIT of choice – Aside from using the Investa ProScreener to find the list of REITs, you can also find more in-depth details about them on the platform! Simply search for them (ex. $CREIT) and you’ll find everything you need to make an informed decision.
5. Place an order for REIT shares – Once your account is funded, you can now place an order to buy REIT shares. You can choose from the available REITs in the PSE and acknowledge the many shares you can afford.

It is important to note that investing in REITs also involves risks. Hence, it is essential to do your research and seek professional advice before making any investment decisions. Should you want to look for broken-down information, our team of analysts frequently shares insights about the fundamentals of REITs, stocks, and even the overall markets to our Prime subscribers!

Tips for investing in REITs

Here are some additional tips to help you start your REIT investment journey!

1. Do your research – Before investing in any REIT, it is crucial to research the company and the market conditions. Look into your chosen investment’s history, track record, management team, financial statements, and growth potential. Analyze the current market trends and economic conditions that may impact the investment’s performance.

2. Diversify your portfolio – As with any investment, it is advisable to diversify your portfolio to minimize risks. Spread your investments across different sectors and locations.

3. Monitor your investments – Keep track of the performance of your investments regularly. Watch for any news or developments affecting the company’s operations and profitability. You can set alerts on your stockbroker’s trading platform to stay updated on the latest market news and trends. You could also follow Investagrams for financial news, real-time updates, and analysis to make informed investment decisions.

4. Seek professional advice – Seek advice from a licensed financial advisor if you’re new to investing or uncertain about your decisions. They can help you assess your risk tolerance and investment goals and guide you on the best investment strategies.

By following these tips, you can make informed investment decisions and manage the risks of investing in REITs. Remember to keep a long-term perspective and have patience, as real estate investments tend to be slow but steady.

Invest with knowledge and discipline, and success will follow

Putting money into REITs can be a profitable method to diversify your portfolio of investments and generate passive income. However, it’s essential to note that investing involves risks, including market volatility, interest rate fluctuations, and property-specific risks. Therefore, thorough due diligence and research are crucial before making investment decisions.

Investing in REITs can be a profitable and exciting way to grow your wealth in the Philippines. Following the steps outlined in this article, you can start your journey toward financial freedom and achieve your investment goals.

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