BDO Securities Corp., the stock brokerage arm of BDO Unibank Inc., encourages investors to make investment decisions based on sound assessment of market conditions rather than on superstitions such as the Ghost Month popular among the Chinese.
The period, incidentally, runs through September 15. “Making investment decisions based on sound research, diversification and long-term goals are crucial, regardless of the time of the year,” John Michael Raz, assistant vice president and head of online sales at BDO Securities, said.
The ghost month is a curious annual observance associated with cautious behavior and superstition that impact financial markets.
Raz said the 30-stock Philippine Stock Exchange index generally exhibits weakness in August, which historically happens 60 percent of the time.
The PSEi closed on Friday at 6,181.06
“This range may persist if participants continue to stay on the sidelines due to lack of catalysts.
There’s really no rule against buying in the month of August,” he said.
Raz said investors should instead consider the supposed ghost month as an opportunity to go bargain-hunting instead.
“While historically weak, investors should take it as an opportunity to buy the dips and initiate positions in their favorite stocks. For a lot of investors, they see weakness as an opportunity to even improve their cost,” he stressed.
According to the stock broker, even a down or flat market still provides investors with decent returns and should not be a reason for anyone to stay on the sidelines.
“For active investors who like trading, a flat market offers an opportunity to trade in and out of a well-established range–buying near support and selling at or near resistance. A down market doesn’t mean no opportunities to make decent returns. Rather, you just need to be more selective of the stocks to buy and manage your expectations in terms of returns,” Raz explained.
“For investors with a long-term view, our comprehensive research coverage provides up-to-date fair value estimates. This aids our clients in identifying opportunities at bargain prices.”
By yearend, BDO Securities projects an index level of 7,700 based on average earnings growth estimate of 15 percent.
