Updated: June 22, 2020
It was September 2010, and the Philippines just elected a new president. Noynoy Aquino is set to deliver his first 100 days report in a few weeks, and the Philippine Stock Market is going up and hoping to reach an all-time record high.
Everyone in the stock market were excited… and relieved, because 2008 was a bad year for us. After reaching a record high of 3,750 in October 2007, the index dropped and dipped to 1,825 by January 2009.
To give you a clearer perspective, if you invested P100,000 in October 2007 in the stock market, then its value would only be around P48,600 by January 2009. Yes, your portfolio would have lost more than half of its value.
A lot of people got scared, and withdrew their investments in the stock market. But some remained hopeful and optimistic — I was one of them.
And so came that fateful month of September 2010, stock prices have been rallying and everything is up. But the question in everyone’s mind is will it break out and reach a new high?
I have been cost-averaging on SM shares for the past couple of years, and I’m excited for it to reach a new high. My hope was for it to close at P480, and it did!
And after a few weeks, the Philippine Stock Market Index eventually broke out to an all-time high of 4,100. Again, to put that into perspective, if you invested P100,000 in October 2007 and held your shares and sold it three years after on September 2010, then you would have received around P109,300.
That’s not really spectacular but if you just put that P100,000 in a savings account with 1% interest per year, you would only have around P103,000. So the stock market still wins in this case versus a savings account.
The story for me does not end there. I’ve been investing in the stock market since 2004, when the index was around 1,500. I’ve been disciplined enough to do cost averaging so it’s really no surprise that by September 2010 when the index reached an all-time record high of 4,100 — my stock portfolio went up 200% or simply 3x its value.
Fast Forward to 2016
It’s June 2016, and the Philippines just elected a new president. Even before Rody Duterte is sworn to office, the Philippine Stock Market is already going up and hoping to reach an all-time record high.
Everyone in the stock market is excited… and relieved, because 2015 was a bad year for us. After reaching a record high of 7,900 in March 2015, the index dropped and dipped to 6,670 by February 2016.
A lot of people got scared, and withdrew their investments in the stock market in 2015. But some remained hopeful and optimistic — I am one of them.
And so now, stock prices have been rallying and everything is up. But the question in everyone’s mind is will it break out and reach a new high?
But I’m a stock market investor and have been holding my shares for more than a decade now. My stock portfolio is up more than 400% or has passively grown more than 5x its value — and that’s my retirement fund right there.
How about you? What were you doing in 2010? Were you already making money in the stock market back then?
What about now? Are you just going to watch traders and investors make money again in the stock market this 2016?
Year 2018 Update:
This post was written in Year 2016. So what has happened since then. As of writing, SM stocks are worth P903 per share — up from P450 back in Year 2010, and P600 from Year 2016.
Meanwhile, despite the volatility in recent years, the index is currently 7,541 — up from 4,100 back in Year 2010, and 6,670 from Year 2016.
Year 2020 Update:
It’s now June 2020. The COVID19 pandemic has caused markets to crash. In March 2020, the price of SM stocks fell to P667.
Despite that massive fall, my SM shares remained positive (because I started buying it at P450). And as of writing, SM stocks recently closed at P949 per share. And the index is at 6,315.
Investing in the stock market is not a sprint, but a marathon. Your time in the market is more important than timing the market.
Below has been the 10-year journey so far, of me and SM: