Good time now to invest in stock market again?

The Business Mirror reported yesterday that the Philippine Stock Exchange was the best performing stock market in Southeast Asia during the 1st quarter of 2009.

From January to March 2009, the 30-company Philippine Stock Exchange index (PSEi) surged 6.05% — a remarkable performance considering the current worldwide economic recession and the losses in other Asian markets.

Compare the Philippine stock market’s performance below with the other Southeast Asian counterparts.

Performance of Southeast Asian stock markets, January-March 2009

  • Philippines: Philippine Stock Exchange Index … +6.05%
  • Indonesia: Jakarta Composite Index … +5.8%
  • Malaysia: Kuala Lumpur Composite Index … -0.48%
  • Singapore: Straits Times Index … -3.5%
  • Thailand: Stock Exchange of Thailand … -4.1%
  • Vietnam: Vietnam Stock Index … -11.07%

Only two of the six countries registered positive performance during the first three months of 2009. The Philippines is currently leading among the Southeast Asian markets, and if this 3-month performance will continue, the local bourse will most likely end 2009 with a performance similar to the full-year +21.4% performance in 2007.

This surge is currently sparking discussions among local stock traders and analysts on whether the market has bottomed out and if it’s the right time now to buy stocks again.

A friend who trades part-time shared that he already earned 12% during the past 3 weeks and, according to him, he plans to make more stock placements in the coming weeks.

On the other hand, a conservative trader I know warns that the bear market may still not be over so it’s better not to jump full-blown into the trading bandwagon again but rather to do it slowly.

Personally, I’m seeing a renewed interest of traders in the local stock market which I think signals more trading activity, and hopefully, increases in stock prices. My plan is to test the waters again starting this week but won’t do daily trading yet like I did before unless I am fully convinced the bear market has ended.

What about you? What’s your outlook on the stock market?

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23 thoughts on “Good time now to invest in stock market again?”

  1. For me, it is certainly true that the bear market is not yet over. I am on a halt as of now as I have quite huge investments in stocks that are on hold right now since their prices are lower than their acquisition prices.

    I believe to most analysts view that the start of the bear market will be on the 4th quarter of 2009 or most probably next year 2010.

    • @tyrone, you mean start of the bull market, not bear market?

      I believe that those investing in the mid- to long-term can’t really rely on the stock market right now. But if you’re a day trader or a short-term investor, you can make money from stocks even if prices fluctuate unpredictably.

  2. may recession ba? hindi ramdam dito sa Pinas gano. mga walang work, nagnenegosyo. mga walang negosyo, sumasali nalang sa mga contests like wowowee and haha!

  3. James, yup, start of the bullmarket.

    I don’t know if you can fully read it because it was a subscription article but an article posted at which I got just now stated that markets show signs of normality as spreads, volatility and trading volumes return to near pre-crisis levels specifically to levels before Lehman Brothers declare bankruptcy.

    Here is the link:

    • @melrose, yun nga. Yung mga mahihirap sa Pinas, nde talaga mararamdaman ang recession kasi araw-araw ng buhay nila, recession.

      @tyrone, unfortunately, I can’t read it in its entirety. But I think it’s summarizing what most of my trader and investor friends have been saying during the past few weeks. Markets are starting to normalize and probably – just probably – the market has indeed bottomed out. The only thing that can pull markets down now is if another big bank or big company declared bankruptcy or announced that they manipulated their financial statements.

  4. I like the thought that we are ahead but the question is what are the stocks to consider? To somehow earn at least 12%! Thanks.

    • That, foxsugar, is the ultimate question! 🙂 I think your choice of stocks will depend on your own analysis of the stocks. Some may opt for junk stocks which can provide high returns in a short time but at the same time risky while some invest for the long-term and go for blue chip stocks.

  5. I believe that those investing in the mid- to long-term can’t really rely on the stock market right now. But if you’re a day trader or a short-term investor, you can make money from stocks even if prices fluctuate unpredictably.

    Makes sense.

  6. What is wrong with these kind of articles is that these journalists themselves are most likely NOT investors. As for the stock market, we are currently on an uptrend short term on an overall downtrend. Meaning to say what we are seeing right now is a rally from very battered stocks. Stocks can go as low as it can until buyers think it is cheap enough to buy in consideration with the economic situation.

    @foxsugar, you need to understand how the market works and how to gain that 12% before you can pick the right stocks.

    @jay, you are right. long term investors should not go in yet since you are looking at a long term perspective, why would anyone rush? the market is good for short-term traders.

  7. Thanks to JonatsGonats’ newsletter, I was able to make a profit with my AGI shares in just one day. If I only had the excess cash, I would be investing short term right now.

    my two cents. 🙂

  8. Some trading activities may offer little regard for the level of the general market. I resumed my stock trading operations last January 2009 and obtained a 12 per cent capital gains as of the second week of April, similar to that one you mentioned. I do swing trades and profit from the price fluctuations.

    I invested for the long hold early in 2007 when the market level was high and promptly got a paper loss of 52 per cent as of the end of March 2009.

    Hence, there is money to be made in trading at this time, and definitely more capital gains from lower stock prices in the long term.

  9. I agree. There seems to be renewed energy from investors to go into stock trading again. Hoping na at the year end eh back to normal na ang stock market. This is for us Filipinos feeling the effect of this recession.

  10. I’ve hit a jackpot in hitting PAX recently and on AGI early this month and still counting. My next big hitter seems to be my core NRCP and maybe some at MEG or more on AGI. So far my Year-to-Date gain now is at stunning 52%. Definitely, the stock market is the place to fast track your wealth creation.

  11. I started trading this February and I like what I’m seeing so far. I’ve gained 20% on the average so far. That’s mainly because I usually sell my shares already when I reach that level. Most say that the market has bottomed out. But there are still news looming around that the Phils. might suffer a recession this year. If that happens, the market would surely go down again. I hope it doesn’t come!

  12. Very good news is that”Good time now to invest in stock market again”.I hope this is good time for the traders who invest in stock market.I also know a website which give very good details about the stock market.for more details of invest in stock market please visit link.. .

  13. According to me make a proper analysis of sectors where you want to invest and also see the compatibility and the profitability of that sectors is the perfect way to invest. The professional attitude of investment is like you should invest for long term and don’t follow the crowd.

  14. 9:05 am Thursday 23 July 2009 Philippine Stock Exchange 2612.38

    The main Philippine index closed near its recent high yesterday. A closer look will tell us, however, that the more widely followed stocks are still below their recent highs. I’m refering to the heavy weights like PLDT (TEL), Ayala Corp. (AC), Globetelecom (GLO), Metrobank (MBT), Ayala Land (ALI), SM Prime (SMPH), Bank of P.I. (BPI), SM investments (SM), and Banco de Oro (BDO). What has brought the index this high were Meralco and the Lopez stocks. The market have been very skewed the past few days and I think it is giving some investors a difficult time to call the broad movement.

    Nevertheless, I would not want to miss the big picture which today will be strongly affected by the possible reduction of reserve requirements for bank deposits. This will have a strong impact on short term interest rates and bond yields in general. It will also affect the Peso/US Dollar rate. Instinctively, I think that this will be good for the market because it generates more cash available for investments.

    The market has been looking overbought and is close to the upper target of its trading range, so I expect it to trade a bit softer today. I would be a buyer on weakness anyway since my longer term view is very constructive. I also believe that there will be another surge of demestic liquidity as banks reduce their funding cost over the next few months. With so much money being pumped into the system, there is no other way to go but buy good yielding stocks. After all, if we are looking at the long run, our journey has just begun. We have miles to go before we sleep.

    See other notes on

  15. Investors will pay a dear price for a cherry consensus, It is best to invest when there is fear in the market and end of the world scenarios .

  16. The best time to invest in the market is when you have the money and when the stock is available at an attractive price that suits your book.

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