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Excerpt
Do you suggest that relatively new business owners become an investor or a trader?
Many people believe that the stock market is where the money is. To be successful in trading the stock market, you just have to learn about technical analysis and watch a few tutorials about it.
However, based on one of the best stock market analysts and traders in the Philippines, Marvin Germo, the most effective way to trade is for you to do what you’re good at. Keep in mind that like any business and craft, trading in the stock market is still skill-based.
This means that if you, as a business owner, can’t watch over your business or stocks in a certain period of time or do your due diligence to study and analyze them, then maybe you should focus on something more passive.
It might be better to buy stocks with high dividends, or the cheaper ones.
It primarily depends on the level of studying that you are willing to do. Stocks need different levels of guarding and studying. You only have to choose if you want to focus on the one that needs 5 minutes every day, or 5 minutes every week for you to check if it’s still good.
This is particularly important for investors because the fundamentals of a company do not change on a weekly or monthly basis. It depends on who they are, what their style is, and many other branching factors that make it extremely hard to define.
If you want to be an investor that focuses on dividends, then you don’t necessarily need to check the status of your stocks every day. Rather you’ll be just as efficient when you take a look at it every 6 months. As long as they give dividends and the company he bought the stocks from is growing. Then you will still get additional earnings year on year.
You can treat these dividends as a sort of time deposit. Bear in mind that that means there’s a chance that it can be lower or higher than the initial amount. However, if you have other business sources and you don’t touch the money for the next few years, then it will surely become much better. Provided that the company has great fundamentals
Six months of dividends sound really good. What companies provide a good return on dividends without having to worry about them for a time?
Before answering the question, Marvin wanted to clarify that stocks are not as easy as how he says it is. He has done this his whole life, and the experience and focus that he has on stocks can easily help him get the very best of trades and such.
However, if you plan on doing stocks on the sidelines, you should understand that they still need some of your focus. Checking up on your stocks may just take a few minutes, but if you’re not focused, you might end up going with the wrong decision.
When it comes to dividends, you should still find time to study the company of the stocks that you bought. The simplest way to find companies that have a high percentage of giving back good dividends is by finding consistency. An even better sign would be if a company is consistent with its dividends, and shows signs of increasing its value as well. You don’t even need to watch many companies. You can focus on 1 or 2 companies. Study their history, then check on them at least once every quarter.
Going back to the question at hand, Marvin Germo likes Globe. They have a consistent PHP91.00 per share value for the past three years and the stock price gives appreciation as well.
Budding dividend investors should also look for companies that are growing. Because in the long run, the dividends that they provide can double. For example, if you bought Jollibee stocks in the past for PHP50 and today it’s valued at PHP200, then the dividends will have increased as well.
What Marvin is trying to say is that by buying the cheap stocks of growing companies, there will come a time when those dividends will be in a good enough position to give better dividends than other companies.
For people who want to earn from dividends this year, some of the historically good companies include SPC, Meralco, and GMA 7 though, take note that with the digital shift to podcasts and Youtube, GMA 7 might become inconsistent in 5 years.
You can also buy the preferred shares if you’re a very busy person. Marvin Germo got only one preferred share last year, and that was the Phoenix preferred share which was at 7%+, making it better than bonds, time deposits, and few other rates of return as well.
Another option that seems to be very fixed, low risk, and higher rates of return than other ventures, then they should take a look at Pag-Ibig MP2. It’s not talked about as much but there was one year that they had 8.4% and another one with 7%. The best part is that this program is tax-free. The only downside is that the money that you commit to MP2, you can’t touch for 5 years. As of January 2020, Pag-Ibig MP2 is in a very good position.
