#024: Stock Market Newbie & Financial Literacy Tips, and RRR Updates
Read Time: 7 minutes
Speaking Time: 10 minutes
Here are the two better-performing articles for the week:
3 Mistakes Stock Market Newcomers Make That Costs Them Money
4 Simple Steps to Improve Your Financial Literacy if You're Just Getting Started
You’ll also find:
Rat Race Running Update
RRR Thread of the Week - 3 Reasons to Build an Emergency Fund Before Investing
RRR Trade of the Week
RRR Investment Update for the Week
RRR Updates:
Facebook: The Rat Race Running Facebook Page has reached the 20K mark and even crossed the 21K followers count in the same week! Thank you for your continuous support for the page.
Did you know it took this page longer to reach 500 to 1,000 followers than 10,000 to 20,000? So, if you still have a small following, give it time.
Here are some interesting numbers:
0 to 500 Followers = 3 months
500 to 1,000 Followers = 1 year, two months
From 0 to 10,000 = 3 years and two months
From 10,000 to 20,000 = 1 year and one month
Typeshare: My writing streak in Typeshare has reached 225 consecutive days, with over 91,000 words written. I am also currently #16 in the ranking, with the longest streak among 76,000 writers on the platform.
Travel Journal: My wife and I have been traveling in Australia (Sydney and Newcastle; up next this week is Brisbane + Gold Coast; last is Canberra). Aside from the public transport and educated drivers, another thing I liked about New South Wales (NSW) is its efficient garbage segregation process. I was watching Atom Araullo Especial last night entitled, “Republika ng Plastik,” and it’s heartbreaking to see that our country, with many eco-tourism spots to offer, is also filled with plastics.
Article #1 - 4 Simple Steps to Improve Your Financial Literacy if You're Just Getting Started
How would you score yourself if you rate your financial literacy from 1-10 (10 is expert and 1 is an absolute beginner)?
If you're in five and above, great! If you're below five, you need to learn and unlearn many things. Since financial literacy is a lifelong journey, what I'll share is just how to get started.
Don't worry; it's just four simple steps.
Step 1: Optimize Your Social Media Feed.
Everything starts with social media these days, including financial literacy.
So, if you're figuring out how to improve your financial quotient as a beginner, it would be to follow the right people. Social media content can teach you how to increase your income, budget, save, and invest. You can also join social media groups and pages dedicated to financial literacy.
Follow those teaching sound financial lessons, and unfollow those who are not helpful.
Step 2: Watch, Listen, and Read.
Garbage in, garbage out, so be careful what information you consume.
You can learn about financial literacy almost everywhere, thanks to the Internet. The challenge, however, is how you'll filter what to watch, listen, and read. It will initially be overwhelming, so start reading the basics and slowly progress to advanced topics.
As you grow your knowledge, you'll realize there's much more you need to learn, leading to the next step.
Step 3: Attend Seminars and Join a Community.
Joining seminars and communities, whether online or in-person, are great avenues to mingle with like-minded people.
I recommend joining free events first and learning the basics. Afterward, you can join paid seminars or online communities connected to financial literacy. A great community of learners will shorten your learning curve as you avoid the common pitfalls.
Seminars may sometimes cost you money, but it's part of the learning process.
Step 4: Teach What You Know.
Teaching is one of the best ways to crystallize your learning.
As you learn more about financial literacy from different sources and media, the next step is to teach it. Remember, you don't need to be an expert before you can teach; you just need the willingness to share your understanding. Be the teacher your younger self needs.
Once you start teaching what you learned, you'll realize that absorbing the concepts you studied is easier - a win-win.
Article #2 - 3 Mistakes Stock Market Newcomers Make That Costs Them Money
Every January, new investors enter the stock market as part of their New Year's Resolutions; by March, they are out.
It's almost an annual tradition for Filipinos to start investing in the stock market. It's so simple, they thought: you open an account, buy low, sell high, then get rich - well, that's what the person on a TikTok video said. Sadly, it almost always doesn't go well for many, resulting in hatred in the financial markets after losing over half their money.
Here are three mistakes I noticed from stock market newcomers that kill their enthusiasm in the stock market.
Mistake #1: They Follow Blind Recommendations on Social Media.
"What's a good stock to buy today?"
This is a common question by stock market beginners on Facebook Groups, asking anyone for guidance on what stock to buy. Then, one by one, vultures dressed as doves enter the scene to recommend stocks that will "go up" - maybe at first. Then, when the newcomer starts gaining confidence, thinking the stock market is easy, they remove their masks and profit off the unsuspecting prey.
Social media is a good place to learn, but never trust any blind recommendations without proper research - you are responsible for your own trades.
Mistake #2: They Buy the Most Popular Stocks Without Any Research.
"Do you think Jollibee or SM or BDO will close in the next ten years?"
If you're like me, this is one of the more popular arguments for buying popular stocks even without proper research. I was also guilty of this; some of my first stocks were BPI (our payroll) and Jollibee (I liked their chicken joy), which sadly tanked. However, a company's popularity doesn't always translate to its stock price.
So, if you're buying a popular stock, thinking it will automatically be a bagger, then prepare to wait a long time for your exit.
Mistake #3: Not Cutting Losses Early (or if at All)
"You don't lose money unless you sell it."
This quote is from someone down by more than 50% on a stock he bought five years ago. This happens because many investors don't understand the importance of cutting your losses to preserve their capital. Instead, they hold on to their losing stocks because they want to preserve their ego and pride.
Not cutting your losses early will result in opportunity costs to stocks that would have made profits rather than waiting for a losing stock to break even.
RRR Thread of the Week:
Read the full thread here:
RRR Trade of the Week
Disclaimer: This is strictly educational and is not a recommendation to buy or sell. I share both of my wins and losses to show new traders and investors the reality of the stock market.
I don’t have a trading plan in particular for this week, as we have an upcoming hectic travel itinerary scheduled. However, I’ll continue to monitor the market to see if any opportunities arise.
I’m also reviewing a couple of my dividend stock holdings in my portfolio, as they are approaching 1.5x my yield on cost. I might sell half to lock in my gains and position it into another stock.
RRR Investment Update
Dividend Update: I have two dividend payments coming in October, so I have something to be excited about. I’m also waiting for more dividend announcements by next month.
There have not been a lot of movements in my stock portfolio asset allocations for this week, as many stocks are too overpriced for me. However, let’s see what happens next week.
REIT Updates: $VREIT, $DDMPR, and $FILRT continue to have the largest annualized yields among the eight REITs but don’t be blinded by those numbers, especially if they are not backed by fundamentals.
The SEC has approved $AREIT’s ₱28.6B property injection, which is great news for holders as it will increase its dividend yield.
Filinvest Land board approves tender offer via Share-Swap using FILRT. Boss
has a great explainer for this in his Sept. 26 issue.
DISCLAIMER: This is not a recommendation to buy, sell, or hold. I am only sharing this to show the difference between each REIT’s current dividend yield.
See you again next Monday at 8 AM Philippine Time — RRR
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