3 Painful (but Important) Stock Trading Lessons I’ve Learned

Apparently, I’ve been doing stock investing for more than 15 years now!

Back then, I was searching the internet for income opportunities. Yes, I was a salaried employee then earning a relatively decent amount, but I still was not convinced that I can retire comfortably given that level of income.

I wanted a faster way to make my money grow, and that’s how I discovered stock trading!

Looking back, the past 15 years have surely been a rollercoaster ride.

A few years ago, I made 200-300% return from my then (and still) favorite stocks SM Prime Holdings (SMPH) and Megaworld Corp. (MEG).

I lost huge money from the speculative stock Agri-Nurture Inc. (ANI) and also — surprisingly! — lost 60% of my investment in one of the supposedly blue chip stocks, PLDT (TEL)!

There certainly were a lot of delightful, depressing, and awful stories in between, but I never regretted the experience and, at the moment, I look forward to the next 15 years of stock trading.

Given the experience, I’d like to share three (3) stock market lessons I’ve learned the hard way which I use as my trading and investing guide right now.

These 3 lessons best summarize my stock market experiences in the past 15 years. And I hope you also learn from these lessons!

Lesson #1: Stock trading gains are not guaranteed

Prior to 2008, making money was easy since the Philippine stock market was experiencing a bull run. But in 2008, the global economic recession kicked in due to the subprime mortgage mess in the U.S. I wasn’t trained yet back then to sell at a loss and so I decided to hold on to my losing investments.

The consequence: I lost 40% of my entire investment in just one year.

How long did it take me to recover those losses? Three (3) years.

Main lesson: stock investments could result in a huge loss. Stock prices will not always go up, and even if stock prices are already declining, they may continue to reach the bottom.

(What I usually tell newbie investors is that, the stock price may be 10 cents right now, yes, that’s cheap, but what prevents it from falling further to 1 cent?)

Thus, if you’re not comfortable dealing with risk and are afraid of losing your capital, think twice about investing in stocks.

Lesson #2: It’s not easy to make a profit week after week after week


In the past years, many Filipinos were lured into stock investing because of the promise of “quick profits”. Indeed during the first half of 2013, a period of all-time highs in the PSE, making money was easy because almost all stock prices were going up.

But in the latter half of 2013, it seemed like everything reversed. The U.S. Fed’s decision to wind down Quantitative Easing (QE3) caused uncertainty and volatility, sending investors into panic selling mode and, unfortunately, locking in real losses.

Thus, we can see that profits are not always sustainable especially in the short run.

It’s not entirely impossible, though — we’ve seen excellent chartists and technical traders regularly beating the market — but the average stock investor may not be equipped to constantly make winning trades week after week.

Thus, my advise: if you are to invest in stocks, go long-term.

Make sure you do not need the money in the next 6 months or 1 year or even 2 years. Otherwise, you might have to liquidate a loss in case you’ll need to pull out the investment.

Only venture in stocks if you’re willing to trade short-term paper losses for gains that may come a lot later — perhaps in 3 or 5 or 10 years’ time.

Lesson #3: Stock trading is not for everyone


I’ve realized that there’s a certain investment profile that matches stock investing. Not everyone has the risk tolerance, investment personality, and financial capacity to venture in stocks.

Unfortunately, many Filipinos who tried stock trading do not recognize this. Many simply jumped on the bandwagon because they were convinced by a friend who supposedly “made millions of money” or were promised guidance by “gurus” or “mentors” who can supposedly give infallible advice. Of course, we learn now, this is not true all the time.

Stock trading is risky and you could lose money. So if you are to dabble in stock investing, ensure that you have the risk appetite to swallow possible losses.

Do not try stock trading just because it’s “cool” or “everyone’s doing it”. If you fear losses, you’re better off investing in relatively safer assets such as time deposits, bonds, government securities, or money market instruments.

That’s it! Those are my 3 biggest stock trading lessons. What’s yours?

Share your own stock trading lessons below!

Must read these other awesome articles!

About the Author


PSEi support seen at 6,200 and 6,000 amid weaker Peso

In a not-so-surprising move, the U.S. Federal Reserve (Fed) yesterday raised interest rates by 75 basis points (bps) or 0.75% in a bid to tame rising inflation in the United States. This was the third consecutive 0.75% rate hike by the Fed, which brings the federal funds rate, the central bank’s benchmark interest rate, to ... Read more

Official SWIFT Code of BDO, BPI, Metrobank, Philippine banks

When sending cash remittances or wire transfer to a bank account in the Philippines (such as BDO, BPI, Metrobank, Landbank, DBP, etc.), you’ll surely need the SWIFT Code of the bank. Look no further because you can find all the SWIFT Codes you need in this list! Make sure you’re using the right bank code ... Read more

How to Waive your Credit Card Annual Fee (BDO, BPI, Metrobank, RCBC, Citibank, UnionBank)

Without a doubt, one of the most annoying fees that credit cardholders have to pay is the annual fee. Majority of cardholders are familiar with this fee and majority of us likely pay this grudgingly year after year after year. In the case of my credit card with BPI (Bank of the Philippine Islands), I’m ... Read more

Why Filipinos do not become business owners or entrepreneurs

For a majority of Filipinos, entrepreneurship does not seem to be a typical, expected path. This is not surprising, considering that in school, students are primarily taught to become employees after graduation. Students train for years to become staff workers, reporting to a supervisor, and just waiting to receive their wages or salaries every month. ... Read more

My experience investing in Mutual Funds in the Philippines

I started investing in mutual funds when I was 22 years old. As an Overseas Filipino Worker (OFW) then, I was fortunate to be able to save some money at that young age because of my work abroad. One time while I was on vacation in the Philippines, I saw a large billboard in EDSA ... Read more

Income Tax Tables in the Philippines (2022)

The Philippines’ new tax reform bill, known as TRAIN or Tax Reform for Acceleration and Inclusion, was signed into law on December 19, 2017 and its implementation began on January 1, 2018. What are the new income tax rates under the TRAIN law? How will TRAIN affect income taxes of individuals and corporations? How is the ... Read more

PSE Stocks Performance under each Philippine President (1987-2021)

Did you know that Philippine stocks were able to achieve an astounding growth of 800% in a span of 30 years? From 1987 until 2018, the Philippine Stock Exchange index (PSEi) rose from 1,000 points to a peak of 9,000 points — generating a return of 800% over 30 years. (The PSEi is an index ... Read more

SSL 2022: Salary Increases for Teachers, Nurses, Gov’t Employees

Good news to all government employees! There’s a new round of salary increases beginning January 1, 2022! Millions of employees of the Philippine government — including public school teachers, nurses and staff of government hospitals, and workers in local and national government agencies, etc. — will be getting an automatic salary adjustment this 2022 under ... Read more

PSE Trading Hours in 2022: What time open, when closed?

Before you take the plunge into stock trading and investing, make sure you understand what stocks are and how the Philippine Stock Exchange (PSE) operates. Unlike other investments that are relatively safe, stock trading is risky and loss of money is a possibility. So before you deep dive into the exciting world of stock trading, ... Read more

Price Floor and Price Ceiling of PSE Stocks

Trading bands in the PSE come in two forms: Price Ceiling, or the upper price limit, and Price Floor, or the lower price limit.

2 thoughts on “3 Painful (but Important) Stock Trading Lessons I’ve Learned”

  1. Hi, how did you learn stock trading? I am asking because i want to learn. I am currently considering investing in stocks, but i want to trade eventually.


Leave a Comment