PinoyInvestor Special Report: Top Stock Picks beat PSEi, Mutual Funds, UITF

James Ryan Jonas

Local stock market resource PinoyInvestor recently published a report summarizing the performance of the stock recommendation of their partner brokers during the first 6 months of 2014. The results show that the recommendations were able to outperform the benchmark Philippine Stock Exchange index (PSEi) and even actively-managed mutual funds and Unit Investment Trust Funds as well.

6-month Returns versus PSE index

From January until end-June this year, the 30-company PSEi increased value by 16.21%. In contrast, the “Top 10 PSEi Stock Picks” of PinoyInvestor’s partner brokers performed better, growing by 26.28%.

Comparing this with the returns of Equity mutual funds and UITF in the country, it still shows that the PinoyInvestor Top PSEi Stocks outperformed actively-managed investment funds in the Philippines. (See 1st Half 2014 Returns of UITF and Mutual Funds Performance here.)

The best performing set of stocks were PinoyInvestor’s Top 10 Speculative Stocks. On average, the portfolio grew by a whopping 38.18%, more than double the returns of the PSEi in the same period. These stocks are composed of companies that may be considered high-yield and high-risk, so do note that the astounding returns of Speculative Stocks come with a bigger amount of risk or possibility of loss.

The third set of PinoyInvestor’s stocks are the Growth/Value Stocks, comprised of local companies not included in the PSE index but with opportunity for growth as deemed by stock brokers. This set also booked double-digit gains from January to June 2014, registering a 15% return.

The chart below summarizes the performance of PinoyInvestor’s Top Stocks versus the benchmark PSE index.

What’s good about PinoyInvestor’s Special Report is that it does not merely hype gains or make unfounded promises of better returns. The report ends with lessons that stock market investors can appreciate.

Lessons for Stock Market Investors

For example, one lesson reiterate a very good nugget of wisdom about investing:

As always, no one can accurately predict how stock prices will move. Yes, our partner brokers can make their best efforts to determine the fair value or target price of a stock, but DON’T EVER let anyone fool you into believing that they can correctly predict stock prices all the time!

Also, they warn that:

You probably noticed that Speculative Stocks produced the highest gains, but if you are a conservative, long-term investor, you should known that Speculative Stocks are not appropriate in your portfolio. Discipline is key, and real smart stock investors stay true to their chosen Investment Objective and Investment Strategy!

These are truly useful lessons that investors can imbibe to become successful in the stock market.

If you want to read the full PinoyInvestor Special Report, you may click the link and access it for Free.

James Ryan Jonas teaches business management, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.2 Billion ($56.4 Million) worth of retirement funds on behalf of thousands of UP employees.