As the eerie specter of “Ghost Month” looms on the horizon, BDO Securities urges investors to maintain a resolute stance on their investment strategies and not be swayed by superstitions. This annual observance, often associated with bad luck, tends to trigger cautious behaviors and market anxieties.
Navigating Financial Superstitions: Ghost Month and Your Investment Strategy
However, John Michael Raz, Assistant Vice President and Head of Online Sales at BDO Securities Corp., the stock brokerage arm of BDO Unibank, emphasizes the importance of rational decision-making regardless of the time of year.
Historical data suggests that the 30-stock Philippine Stock Exchange index has displayed weakness during the month of August, approximately 60% of the time. Presently, the market hovers in the 6,350-6,750 range, with established support at the 6,350 level. Despite the prevalent market uncertainty, Raz reassures investors that there is no steadfast rule against making investments in August.
Rather than succumbing to superstition-induced fear, Raz encourages investors to view Ghost Month as an opportunity for bargain-hunting. He suggests that investors consider utilizing this period of historical weakness to purchase stocks at lower prices, potentially improving their cost basis.
For those seeking sectors with strong growth potential, Raz recommends focusing on the financial and power sectors, with selective investments in conglomerates. The financial sector is favored due to its healthy loan growth and improving lending margins, while the power sector stands to benefit from inelastic power demand and higher spot market prices. Additionally, conglomerates with consumer-centric portfolios are poised to benefit from the country’s economic resilience.
BDO Securities emphasizes that a down or flat market can still provide investors with reasonable returns. Raz advises active investors to take advantage of flat markets by trading within established ranges, buying near support levels, and selling near resistance. Even in a declining market, opportunities for decent returns exist; investors should simply be more selective about their stock choices and manage their return expectations.
For those with a long-term investment horizon, BDO Securities offers comprehensive research coverage and up-to-date fair value estimates to help identify opportunities at attractive prices. They provide guidance through various resources, including the Weekly Wrap and Technically Speaking articles, tailored to individual investment objectives and risk preferences.
In conclusion, as Ghost Month is upon us1, BDO Securities reminds investors that maintaining a rational and data-driven investment strategy is paramount. Superstitions should not deter investors from seizing opportunities in the market. Whether actively trading or holding for the long term, informed decision-making and selective investing remain key to achieving financial success.
As the year progresses, BDO’s brokerage arm anticipates an index level of 7,700, based on an average earnings growth estimate of 15%, providing investors with a positive outlook for their investment journey.
About BDO Unibank, Inc.
BDO is a full-service universal bank which provides a wide range of corporate and retail services such as traditional loan and deposit products, treasury, trust banking, investment banking, private banking, rural banking and microfinance, cash management, leasing and finance, remittance, insurance, cash cards, credit cards, and online and non-online brokerage services.
BDO has the country’s largest distribution network, with over 1,600 consolidated operating branches and more than 4,700 ATMs nationwide. It also has 16 international offices (including full-service branches in Hong Kong and Singapore) in Asia, Europe, North America and the Middle East.
The Bank also offers digital banking solutions to make banking easier, faster, and more secure for its clients.
BDO ranked as the largest bank in terms of total assets, loans, deposits and trust funds under management based on published statements of condition as of March 31, 2023. For more information, please visit www.bdo.com.ph.
