10 Common Investing Problems To Avoid, Starting Today!

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 10 Common Investing Problems To Avoid, Starting Today!

Copyright © 2019
All rights reserved. No part of this book may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, electronic, mechanical,
photocopying, recording, scanning, or otherwise, without the prior written
permission of the publisher.

Disclaimer
All the material contained in this book is provided for educational and
informational purposes only. No responsibility can be taken for any results or
outcomes resulting from the use of this material.

While every attempt has been made to provide information that is both accurate
and effective, the author does not assume any responsibility for the accuracy or
use/misuse of this information.

The purpose of this eBook is to educate. Therefore, it should be used as a guide –

not as the ultimate source.

You are encouraged to print this book for easy reading.

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 10 Common Investing Problems To Avoid, Starting Today!

Table of Contents

1. Investing In Something You Don’t Understand ………………………………………4

2. Capital …………………………………………………………………………………………………..5
3. No Emergency Fund ……………………………………………………………………………..8
4. Not Paying Attention To The Risk ………………………………………………………..10
5. Failing To Have An Investing Plan or Strategy ……………………………………..12
6. Failing To Diversify ………………………………………………………………………………13
7. Lacks Patience …………………………………………………………………………………….13
8. Timing The Market ……………………………………………………………………………..14
9. Letting Your Emotions Rule The Process ……………………………………………..16
10. Not Seeking For Help ………………………………………………………………………….17
Conclusion …………………………………………………………………………………………..19

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 10 Common Investing Problems To Avoid, Starting Today!

Many things can ruin your investments, but the ones that I believe to be the most
significant are those listed above. However, I do not guarantee that if you prevent
each of these areas that you will already make money. One thing is for sure,
avoiding these investing problems will put yourself in a much better position, and
you should be well on your way to stock market success.
Here is a breakdown of each of the common investing problems listed above.

1. Investing In Something You Don’t Understand

Beginners should always remember to never invest in
something they do not understand, no matter how
profitable it may be.
When it comes to investing you should be very careful.
Sometimes we ask ourselves “Is the stock market risky?
Is it safe to invest in the stock market? etc..
Well, how can you answer those questions if in the
first place you are already in doubt?
Most people don’t do their research before
investing.
Why? Because they like the feeling of being up to date, “Sabay sa uso.”
There are a lot of people out there investing in the stock market, mutual funds,
VUL, etc. without knowing why they’ve availed such investments.
They don’t know what investing is and why it’s essential.
Again, do not invest if you don’t have any idea about investments.
Start by learning things one step at a time.

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Knowledge is what can separate you from the rest.

As what Benjamin Franklin said: “An investment in
knowledge pays the best interest.”
The feeling is different when you know what you’re
doing.

So what are the ways for you to educate yourself with investing?
One of the main reasons why I created this eBook is to equip and empower you
with stock market principles and concepts so that you’ll be financially educated
and later on have a sound financial decision.

• Reading eBooks and Blogs about Personal Finance and Investing.

• Buying Books about Money Management and Entrepreneurship.

• Attending Seminars, Events, and Workshops.

• Joining Forums, Facebook Groups / Facebook Pages, Subscribing to

Newsletters.

• Lastly, regularly check your email because it’s where I will share with you
the critical concepts you need to learn and understand before investing in
the Philippine Stock Market.

2. Capital
This is quite simple, you need money.
You need money to invest in the stock market.
For you to do that, you need to develop the habit
of saving money.

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Money is the lifeblood of any investor.

You need it to start your stock market investments.
However, it’s not us who decides the minimum capital needed for you to invest;
it’s the online stock broker.
For example, COL Financial (the online
trading account I’m using) has a minimum
investment of P1, 000 as the COL
Starter account type.
Way back 2013 when I opened an
account, I can still remember that
their minimum investment at that time
was P5, 000. This is so far one of the
cheapest online broker I know for you
to open an account with.
Other online stock broker companies
offer you a starter account ranging
from P5, 000 – P25, 000.
But the question here should not be pointed out on the amount for starting or
opening an account in order for you to invest.
It should be apparent at first on how much money you are
willing to set aside regularly for your long-term
investment in the stock market.
I know for sure with P1, 000 you can easily open an
online trading account already but, how about the
needed capital for you to continue investing regularly
in the long-run?
When I say long-term here, it means you are willing to invest in the stock market
for a minimum of 7 years and above regularly, like in a monthly, quarterly, semi-
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annual or yearly basis. But what I mostly recommend is for you to invest in a
monthly basis.
For example, currently I am 28 years old and my
goal why I’m investing in the stock market is to
have a comfortable retirement.
I’m planning to retire at 60 so I still have 32
years left (Retirement Age 60 – Current Age 28 =
32).
Therefore, I will save P5, 000 monthly and
invest it in the stock market for the next 32
years.
Yes, this will require a lot of discipline.
Thirty-two years of saving and investing money regularly is not a joke. Many
people are having difficulty completing the 52-week money challenge, how much
more with 32 years?
What I want you to know is that, this is not a get rich quick scheme. I will teach
you how you can succeed in stock market through long-term investing.
Now going back, other people cannot save money because they have too many
expenses, including inconsistent income.
Some have very little savings which for them is not
enough to invest. There are times as well that
emergencies often happen which prevents you
from investing regularly.
If this is your case, forget about investing and
just focus first on forming the habit of saving
money regularly.

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You should keep track of your income and

record all your expenses. With your list in
hand, try to categorize each item as a NEED
or WANT. Need is something you can’t live
without, WANT is the other way around.
Doing this will help you manage your
finances better by avoiding those
unnecessary expenses and also find or
create other sources of income. The goal
here is to live BELOW your means so that
you’ll have something to save every single month which will later become the
money you’ll invest in the stock market.
Again, saving money and investing money is a HABIT and all habits can be learned.

3. No Emergency Fund
Wouldn’t it be great to have a little bit of extra money set aside that you could
use to cover any misfortunes in life?
First let’s define what an emergency
fund is. An emergency fund is a
reserve of money that covers expenses
you wouldn’t typically plan for. These
are things like a car trouble that might
not have enough car insurance to
cover, or an expensive medical bill,
loss of job, etc.
A trip to Disney Land is not an emergency; neither is Fiesta Celebration,
Birthdays, Weddings or Christmas. All those things are plannable, and you need to
plan for them. Emergencies are urgent and unexpected.

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The reason to have one is straightforward. You don’t know what’s going to
happen in your life, and sometimes you just need a little extra, and it’s excellent
to be prepared.
I don’t want you to be in a situation where you had an emergency requiring a
tremendous amount of money; then since you didn’t prepare an emergency fund,
it leaves you no other choice but to withdraw all of your investments in the stock
market. But, we still don’t know if at that particular time your investments
performed well or not.
Remember that the stock market is
volatile, meaning it can go up and down
at any point in time, that’s why I
encouraged you to do long-term as what
I’m doing, in order to minimize the risk.
You didn’t involve yourself into stock
market investing just to have some
money in cases of emergencies. You
invested because you have a long-term
goal in mind that you wanted to achieve.
Having an emergency fund will help you sleep better at night, and this will serve
also as you buffer fund so that your stock market investments will not be pulled
out in times of emergencies.

So how big should your fund be?

Most people will tell you to have at least 3-6 months
living expenses, but it all depends on your financial
situation. If things are pretty stable, you may only
need three months. If you’re the only earner in the
household, then you maybe need to save some more.

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The funds should be liquid, meaning you can access to them quickly like putting it
in a regular savings account. Remember not to touch it unless you have to have it
because that’s the whole point.

Here’s what you need to do:

• Sit down and calculate how much you need to live

for three to six months. The list of expenses I taught
you to do in number 2 will be of great help.

• Every time you receive your salary, make it a habit to

immediately save a portion of it to build your
emergency fund. It’s up to you if all other monetary
benefits you’ll receive such as bonuses and
incentives will be placed on your emergency funds
so that you can build it faster.
Always keep in mind you need to do what’s best for you. It might
seem like your fund is sitting there doing nothing, but it’s giving you some great
peace of mind.

4. Not Paying Attention To The Risk

All of us wanted to make our money grow. We
want gains, not losses. But here’s the
problem, sometimes people go into
investing without knowing the risks
involved.
In any form of investment vehicle, risk is always
present. It only matters on the type of risk
involved – high risk, medium risk, or

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low risk. Even in our everyday life, we are experiencing risks. How?
The moment you’re crossing the pedestrian lane, there’s a risk for you to get
bumped by a vehicle.
By not investing at all has the risk of your money being eaten up by inflation.
Now, 95% of stock market beginners would ask, “Is the stock market is risky?”
According to Robert Kiyosaki, it’s not the investment that’s risky; it’s the investor.
What he wants to say here is that you need to stop blaming the investment,
because the risk belongs to the investor.
Investing in the stock market is just like driving a car, there
are risky drivers (don’t follow the traffic rules), and
there are safe drivers (follows speed limit, uses
signal lights, observing traffic rules). In this guide,
I’ll teach you how to become a safe and wise
investor.

So what are the stock market risks and how to minimize it?

Problems Solutions

1. The possibility of losing some or all of 1. Go long-term investing, diversify and

your money. have a trusted investing strategy.

2. The possibility of withdrawing your 2. Have an emergency fund.

money due to emergency situation.

3. Asking on social media about what 3. Financial education and learning

stocks to buy and sell. from experts.

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The primary source of risk is Ignorance. Therefore, you need to educate yourself.

5. Failing To Have An Investing Plan Or Strategy

Another problem is not making your own plan or strategy. It’s like following
random people’s pieces of advice. Your main goal is to get an idea of what’s the
trending stock in the News, Facebook groups, etc. without doing further research
about it.
You know what, at the end of the day you need
to have your plan and strategies. You cannot
allow other people especially the non-
experts to do the planning for you
because they don’t live your life. They don’t know your
financial plan. They don’t know your financial target.
If currently you have no plan, please
don’t invest yet. Continue reading this
eBook.

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6. Failing To Diversify
Another way to minimize the risk of losing money in the stock
market as written in number 4 is to diversify or what we call
diversification. It means managing the risks by having a wide
variety of investments within a portfolio. It simply means not
putting all your eggs in one basket.
For example, when you invest in the stock market, you
don’t only invest in one or two companies. You should
choose other good companies out there who are doing
great in their respective industry.
So what comes first into your mind when you think of a
great fast food chain business? Do you consider Jollibee
as one of your answers?
How about in the Banking and Finance Industry? Do you think of the blue logo? Or
the red logo company?
These companies had built their reputation over time, and when people come to
think of something close to it, it’s their brand that comes out first from their
mouth.

7. Lacks Patience
When it comes to investing, it takes a lot of
patience. Not only in terms of money, but it
also takes a lot of time.
The problem here is that most people want
to invest now and reap their profits
immediately. They want to invest today and
become millionaire tomorrow. Investing in the

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stock market for long-term investors doesn’t work that way.

Most knowledgeable persons and reasonable companies out there has a lot of
patience, and they allow time and money to work for them, instead of them being
stressed out.
That’s why it’s vital for you to know your investing horizon.
So what type of investor are you?

• Short-term investor – investing in the stock market for 3-5 years.

• Medium-term investor – investing in the stock market for 6-9 years.

• Long-term investor – investing in the stock market for 10 years or more.

I’m a long-term investor because I’m investing for my retirement which is exactly
32 years from now. Again, Patience is Needed.

8. Timing The Market

Being able to time the stock

market which means
predicting when it’s going to
crash and then invest accordingly
is very difficult. No matter what some
analyst tell you, timing the market is impossible. Nobody has the
crystal ball in the stock market.
Now the perception of timing the stock market is often
misunderstood. Many investors think about timing the market to be
predicting when a crash is going to take place, and selling before it
does.

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Predicting stock market crashes are impossible, nobody can predict them. It’s a
lot more beneficial to time the market by buying after a crash. Stock market
crashes present an excellent opportunity to buy precious companies at Super
Discounted prices.

After the market comes down, this is the best time to buy companies you
believed in. Companies that will still be there 10, 20 or even 30 years from now.
And these companies are called Blue-chip stocks.
That’s the essence of being a long-term investor, not only going
through the good times but also surviving the tough times
together with these companies.
Timing the market in that manner – predicting that you have
gains after a crash, rather than anticipating the crash itself – is
the most effective way to time the market.
However, I do not recommend beginners to do trading or
market timing; instead I highly encourage you to invest
regularly with Blue-chip companies over the long-term.
Trust me, it works!

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9. Letting Your Emotions Rule The Process

No one can control the stock market or exactly how an investment can perform.
And feeling a lack of control can lead to making emotional and impulsive investing
decisions. So even though we are trying to avoid potential declines, the most
significant risk to the success of our investments may not be market fluctuations
themselves, but it’s our reactions to these fluctuations.
However, when we can identify and understand emotional investing behaviors,
we can help to avoid making these mistakes in the future.
I remember the time I was still
new to investing. I checked my
portfolio, and then I saw bloody
numbers – meaning, I was losing.
Gosh! I was in panic mode already.
I can’t express the feeling seeing
your investments losing day after
day.
Guess what?
I sold some of them, and yes, I lost money because of being emotionally unstable.
But now whenever I see the stock market dropped, I smile and keep my emotions
in control because I know that for me to reach my long-term financial goals, it’s
crucial to stay in the game.
On any given day, you’ll see a negative headline about the Philippine economy,
Terrorism, Political Uncertainty, and Market Volatility. And while it is tempting to
move out of the market and wait for things to get better, it’s nearly impossible
when to exactly exit and when to re-renter the market.

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Unfortunately, many people tend to invest

based on their emotions. They buy when it feels
good and sell when it feels terrible. This type of
emotional response can lead to buying high and
selling low, certainly not a recipe for successful
investment strategy.
Now avoiding the impulse of emotional
investing requires discipline.
Having a clear picture of why you are investing as well as how your decisions may
affect your ability to reach your long-term objectives can help a lot.
So if you feel that your emotions are starting to get the better of you, take a step
back and have clarity. Always remember to stay focused on reaching your
financial goals.

10. Not Seeking An Expert Advice

When it comes to stock market, you might get
overwhelmed because it seems complicated most
especially if you’re still a beginner.
That’s the reason why I would always tell people that
it’s not wise to learn things from scratch on your own.
It’s much wiser to learn from other people’s failures and mistakes. In that
manner, you’ll save a lot of time and money.
It also gives you a lot of advantage to seek for expert advice to people who are
already investing in the stock market, to people who already have a significant
amount of money in their stock market portfolio, to people who are continually
investing in the Philippine stock market.

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That’s the reason why I created this eBook to

provide some information and guide you on how
you can really avoid mistakes in investments.
Let me tell you this as a final word, If you didn’t read
financial blogs, books, seek help from financially
literate people, or watched financial literacy videos;
I’m 100% sure that you’ll make financial mistakes.
Now as a word of caution, especially to those OFW’s and Retirees. Financial
mistakes are Painful and Costly. Why?
It’s painful because all your hard-earned money will be drained, most especially if
you’ve got scammed. It’s costly because you cannot anymore recover from that
loss.

Have you ever watched news of people getting scammed?

Imagine this, 30 years of your retired income
got vanished in just a single transaction. So
sad, but it is happening. I don’t want you to
experience that, never!
In cases of some OFW’s, all their savings and
hard-earned money that has been used to
put up business in the Philippines got
vanished as well, just like that.
The struggle is real.
So don’t commit these mistakes. It’s much wiser to learn from the mistakes and
failures of other people.

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Conclusion
By avoiding these ten common investing problems of beginners in the stock
market, you’ll have a much better chance at becoming a successful stock market
investor.
You Can Do This!
It’s going to take some work, especially at the beginning, but it will all be worth it
in the long run.

My question to you right now is this:

• What is your current Financial Journey?

You may send your answer at support@glennchavez.com

I will read and reply to your answers personally.
Thank you so much for reading this eBook.

For more great information on How To Successfully Invest in the Philippine Stock
Market, be sure to check out my future emails.
If you have enjoyed reading this eBook, kindly do me a favor. Share it with your
closest friends and family so they can also grab a FREE copy.
Just tell them to go to glennchavez.com

“Always remember that Wealth does not happen by Chance,

it happens by CHOICE.” – Glenn Chavez

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