While many investors are afraid to invest in the stock market because of the current bearish conditions, BDO Securities Corporation said it is actually a good time for beginners to seriously consider buying stocks.
From a high of 9,078.37 in January 2018, the 30-stock Philippine Stock Exchange index (PSEi) has since plunged by 32 percent as of the end of October 2022.
The index was not immune to the global markets sell-off due to looming concerns of high inflation, the hawkish stance of global central banks, and a strong US Dollar against other major currencies.
While this big index drop could be discouraging to a number of portfolio investors, some market pundits point out that now is actually a good time to start considering adding stocks to one’s investment portfolio as shares of blue chip companies are at “bargain prices.”
"If you start accumulating blue chip shares now when its current value is lower than its medium-term historical average, just imagine the potential earnings upside should the index return to the 9,000 level as a result of our country's unique business prospects," said BDO Securities Chief Operating Officer Bernhard Tsai.
He noted that, "The PSEi may finally carry out a more significant rally once a successful re-test of the 5,700 support area is done.”
“Once confirmed, take advantage of this unique opportunity to buy good valued stocks at levels lower than its medium-term historical average. Because in the long run, good companies like these blue chip stocks are expected to rise," Tsai added.
BDO Securities is a full-service, multi-product brokerage firm, and a wholly-owned subsidiary of BDO Unibank’s investment banking arm BDO Capital & Investment Corporation.
As part of its value proposition of providing easy access to stock trading via online platform, it also offers valuable market information, insights and analysis through research reports, trading commentaries, educational webinars and market related vlogs.
Such analyses are mainly known as either fundamental or technical analyses-based reports/commentaries.
Its fundamental analysis-based report, titled Weekly Wrap, contains the company coverage of BDO Securities Research.
In this report, clients can see analysts' rating, target price for each stock, and other fundamental analysis-based data that can aide the investment decision-making of investors.
On the other hand, its technical analysis-based reports, called Technically Speaking, features short-term trade ideas best suited for both technical analysis experts and for those just beginning to learn the technique.
"Although it takes time for someone to master technical analysis, the Technically Speaking report is formatted in such way that a beginner will be able to follow. Patterns are drawn in the chart while entry and exit prices are clearly indicated," Tsai explained.
As final advice, Tsai said, "You will never learn stock market trading or investing if you don’t try it out yourself. Learning comes with experience. The more trades you execute and learn from the mistakes associated with these trade, the more you will improve in your decision making. Just know your initial objectives and have realistic expectations."