How to Build Equity for Your Speculative Stock Trading

The Starter Investor Strategy for Building Equity

Effective from our update on April 5, 2023, we have rebranded from Marginal Investor to The Starter Investor. For additional details, please visit our About Us page.

STRATEGIES FOR BUILDING YOUR EQUITY for the purpose of stock trading are derived from what I shall call the Marginal Investor Triangle.

We start out with generating savings being our main objective, hence making us Savers.

Since savings does not offer protection against inflation, we seek a complementary activity that shall serve as a hedge. Thus, we become attracted to the hedge provided by capital gains obtained from engaging ourselves in the stock trading business, partly transforming us into Traders.

When the saver and the trader are placed in the presence of each other, they attract one another and from their union is born the Investor and his investments. This point completes the formation of our Marginal Investor Triangle. 

Saver

Clearly, the starting point for the investor described in my previous post Finding the Money for Investment is generating savings. Set aside no less than 275 pesos monthly and within a year, we shall have a desirable balance for opening a BPI Expressteller Savings account: 3,000 pesos.

Investor

Continue with your savings program and by the second year, we shall be ready to open our BPITrade account in preparation for our stock trading operations.

 

The First Step: Starter Stock Trader

By the third year of our savings program, we shall have the equity for speculative stock trading. From being savers, we now become swing traders looking for buying opportunities and capital gains by investing in the Philippine Stock Exchange.

The Goal: Intermediate Stock Trader

We shall continue with our saving and trading activities until we can build a fund of over 50,000 pesos. Why this amount? Because this is the minimum price of our ticket to the world of BPI Investment Funds.