THE OFW INVESTOR: How to Sell Stock after 20 Years of Accumulating

I received an e-mail from Josef Gamboa asking me if after 20 years of buying and accumulating stocks, selling the stocks won’t be a problem. Well, the answer is selling the stocks 20 years from now is as easy as buying the stocks today. Why did I say that? The stock market has been here for decades already and it is still existing and growing. The history tells us that stock market is here to stay. So for all of those people out there, who have been asking themselves if selling the stocks twenty years from now is not a problem, just sit back and relax.

Peso Cost Averaging

What Josef wanted to do is that he will just keep on buying his favorite stocks every month. He doesn’t care whether the stocks are up or down because in the long run, the prices will have an average price that is not too high or too low. It sits right there in the middle of lowest and highest prices of the stock. This type of investing is called peso cost averaging. This type of investment is good for the Filipinos who don’t know much about the stock market. In fact, some of the great investors prefer this type of investing.

Do you know Warren Buffet? He is arguably the most popular investor of all time. He is still alive mind you. He is one of the richest men in the world. He will buy stocks that he believed are cheap and then sell it after a decade, or two decades or three decades or sometimes he doesn’t sell it anymore. One of his mottos is “buy and hold forever”. I hope one of us will become like him. Warren Buffet doesn’t do peso cost averaging but the similarity between his investing style and peso cost averaging is that when you buy a stock, you sell it after a long, long, long, long years.

So to Josef, what you planned to do is actually good. I know most of us are busy with our day jobs and we have limited time to study the stock market. Thus, peso cost averaging will most likely work for all of us. The system is simple but effective.

Buy Blue Chip Companies Only

In order to sell your stocks immediately after 20 years of accumulating them, you need to buy blue chip stocks only. Buy solid companies which will last until the next 50 years or so. Yes, buy blue chip companies only and ignore the rest. These big companies like PLDT, Ayala Land, BPI, Metrobank, URC, etc have big market capitalization. If your chosen company has a big market capitalization, you have a bigger chance of selling it immediately, because you have a lot of buyers that will buy that stock which includes the foreigners.

So how can you determine these blue chip companies? The best way to get the list of these companies is to check the Philippine Stock Index. This is the list of the 30 biggest companies in the Philippines otherwise known as blue chip companies. Sometimes the composition changes because some companies have met the requirements meted by PSE.

4 Steps in getting those 30 companies included in the Philippine Stock Index

1. Go to www2.pse.com.ph (actually this is the old website of PSE, but I prefer to use it because of my familiarity with its functions).

2. Click Stock Quotes

3. Click PSEi

4. The list of blue chip companies will appear

Ripe old age, Sell the shares and enjoy!

Ok, after 20 years you have decided to call it quits and enjoy the hardwork you have toiled in your entire life. You are now ready to retire and sell your stock investments.

As I have said above, in order to sell your stocks immediately, you must own blue chip companies only. For illustration purposes, you bought Megaworld Corporation for the last 20 years and you are ready to sell it. How in the world can you sell those stocks?

Alright, if your stockbroker is Citiseconline which I am very familiar with, just click the sell button, type the current price and sell all your shares. Sometimes, in just a matter of seconds, not minutes, your transaction will be executed and voila, your shares are now transferred to you cash account. Just ask Citiseconline to transfer the money in your bank account.

5 Steps When You Sell Your Stocks on Citiseconline

1. Click Trade/Portfolio