Below is the 1 year chart for the PSE index: (credit: ATR Kim Eng)
Anyway, going back to the PSEi, the index performed a year-to-date gain of 37.62%. The index is composed mostly by blue chip companies and other sectoral representatives that could best describe total market performance in the Philippines.
Since I have only started 5 months ago, I should compare my performance to at least the 6 month gain of the PSEi which is at 24.56%. The goal of an equity trader is to beat the market, meaning to have higher gains compared that to the index or to any other Mutual fund available. ATR Kim Eng's Equity fund, which I also have since Dec 2007, reports a YTD (2010) gain of 51.75% (wow!) or a 6 month performance of 26.55%, still higher than the index.
Given the above figures, my performance then shows a dismal rate at only 13.24%. Actual profit gains (cash outs) are at 12.28%. Despite the relative low performance, I should bear in mind that my investment cost wasn't all the same from the start. In fact, I had more than doubled the investment at the 3rd month, which was already too late for the bull run; thus, in effect only diluted the figures. My computation for my equity performance is basically just dividing the current equity value (or cash outs) divided by the total cost of investment, regardless of the time of additional entry.
Anyway, I would still like to stick with the current figures as my YTD performance, to encourage me more to surpass these levels next year. These first few months in trading serves as a test-run for my trading system, considering that I am also now doing full time in graduate studies. At least now, I am able to understand and feel the market; hopefully, leading me on to wiser trades on the following months.
As part of my year-end analysis, I shall list down what I had experienced below:
1.) I started as a short term trader, being able to monitor the market daily, as a bum (not working, but waiting until classes start). As soon as classes have started, and going on from midterms to finals, I was no longer able to religiously monitor the market. Thus, I have decided to shift from being a short term trader to a mid-term/long term. Doing short-term trading while not being able to monitor the market daily would only lead me to losses and/or missing out on swings.
2.) I still have problems in cutting my losses, always hoping that stocks would rebound in a while. Quite easy on a bull run, but bulls aren't always there. I have experienced this during the market correction last Nov-Dec, losing around 17% from URC and 9% from DGTL. If only I was able to define my stops (i.e. -8% in 1 month), then I would have managed to reduce my losses.
3.) I am still practicing with Fundamental and Technical Analyses. Before I enter a stock, I should at least have studied it well. "Trade with a Plan".
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Others to follow.
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