What are Hot Money in the Stock Market?

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To put it simply, these are the foreign investments inflow in Philippine Stock Market. They are so called hot money because they can be pulled out easily from the stock market. The top five foreign investors came from the US, the United Kingdom, Singapore, Luxembourg and Hong Kong. Data from the Bangko Sentral ng Pilipinas (BSP) showed that as of August 19, 2011 FPI or hot money yielded a net inflow of $3.065 billion, up 99.6 percent from $756.58 million a year ago. 


The stock market recently experienced downturns in the month of August. It went down heavily and small investors like me sweated profusely waiting for the chaos to stop. Thankfully, this week we have seen some upswing in the market and I think the bullish market is about to unfold. 


The bloody August we have experienced is because of the hot money pulled out from the stock market. The foreign investors got scared because they fear that US might go in recession again. Coupled with the US Debt downgrade and European Debt Crisis, foreign investors pulled out their money from the stock market.


Foreign investors are unlike the average Filipino investors; they (foreign investors) are not that concerned about the losses recorded as long as they can still get some value out of the market.


There is nothing wrong with the fundamentals of our stock market. The problem is most of us Filipinos do not know how to invest in the stock market. There is no real or new money coming into the market, particularly for long term investment. 


What drives the stock market right now are the hot money from foreign investors that have the funds to move the market.We’re part of the global economy so we really cannot limit our exposure to foreign funds. There is a limit of liquidity we can get from Filipino investors. So it is best to open our market to foreigners. It will actually help the economy as a whole because it means that investors have confidence in our economy and we should encourage them to come in and leave when they want. I think the important thing is to manage the inflow and outflow of foreign funds so that it doesn’t come in as hot money which will give the market a boost at one point and also expose the market to global risk.


http://www.manilatimes.net/index.php/business/6227-hot-money-inflows-nearly-double-halfway-through-august
http://www.philstar.com/Article.aspx?articleId=715842&publicationSubCategoryId=63

Money Blueprint

Whew! I just came from a two weeks vacation in the Philippines and it feels right good for me. Somehow my batteries are recharged and is now ready to pounce on every opportunity I might bump.

Within the two weeks vacation I took, I observed some of the thinking or mentality of most of the people I have talked to. In that period, I have noticed that around 99% of the people I have met have what I call the "Poverty Blueprint".

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I talked to one of my relatives and asked how his one million peso was spent. Let's call him Uncle John. Nine months ago, Uncle John just sold his parcel of land he owns for one million pesos. He needed the money because he doesn't have any job and they need it to get by through the day. His plan was to buy a jeepney worth two hundred fifty thousand pesos and rent it to others so that he can have a daily income to sustain their daily food expenses. The seven hundred fifty thousand pesos left from the sale of land will be deposited in the bank for emergency purposes. Uncle John thought he could live comfortably from that day on.

He bought a jeepney for two hundred fifty thousand pesos and deposited the rest in the bank. Following his plan, he rented the jeepney to others and collects the daily "boundary" from the driver. Things are going very well.

Two months later, he bought an owner type jeepney with a reason that since he is already fifty years old, he needed a vehicle that would transport him to locations so that he can avoid the daily commute. He spends fifty thousand pesos for that vehicle. This is the first time that he owned a vehicle for his personal use. He uses the owner jeep to go to destinations he likes to see. Uncle John is now brimming with confidence and soon follows a woman who rides on his owner jeep.He told the woman that she should not worry about anything and he will take care of her since he has money in the bank.

He continued with his life and nine months after the sale of his land, he is almost back to his old financial situation when the land is not yet sold. Bank account is now fifty thousand pesos and the jeepney is needing some major repair. Things are getting ugly. He asked me if I could lend him but I told him, "No".

What happened to Uncle John? A man who has a million pesos in his pocket, did some business (jeepney), is now back to his old financial situation. Why do you think had happened? Hindi niya swerte?

What happened to Uncle John and to many Uncle Johns of the world is not because of fate or luck or tadhana. Uncle "Jigs" told me that even if you will give Uncle John ten million pesos he will still be back to his old financial situation.

Uncle John's money blueprint is not for millions but for thousands only. He lives and earns in thousands before and even when his parents are alive, they don't live by the millions. His life has been molded to earn and be comfortable in thousands that's why when he got a million, no matter what his reasons are he will be back to his old financial ways. It's deep within him and it is the subconscious mind embedded within him that Uncle John will always look for thousands not millions.

I have seen in others as well and it is really pathetic. What is more troubling is that they held firmly on their beliefs. The only way to get out of this is to follow the mindset of successful people. Learn from them and act.

What You Must Avoid

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It is natural that when the unforeseen happens we are far more likely to react in a negative way. However this need not be so, this blog reveals ways to achieve your goal harmoniously and diligently.

The following are some pointers that will be most helpful:

1. When things go wrong do not overreact. Think positively and calmly.

2. Do not be over judgmental, and over critical.

3. Try not to ignore a bad situation, beware of the comfort zone.

4. Wisdom and strength alone can help you overcome much of life’s imminent problems.

5. Tackle problems head on.

6. Avoid greed and conceit of any kind.

There is a business ethics and a businessman should practice this ethics. Those who are strictly honest and truthful will flourish in business. Let us once again consider art as an example to highlight what has been discussed thus far. As we all know we have innate powers – within each and everyone of us lies the storehouse of latent energy bursting to be ‘awakened’.

Let us assume that you have the creative power, and that being an artist for example you can virtually paint and draw any subject or theme.

Fair enough, it is obvious that you have considerable talent as not all artists have this ability. Since you are aware of this, you may assume that because your artwork is good it has good potential to be sold. True, but let us consider all factors that need to be taken into account a step at a time.

1. You may be a very good artist, but if your work does not get noticed and appreciated, it is of no real benefit. It is important therefore that your work gets noticed (through maximum exposure) and the way to do this is get your name established.

This requires that you contact the right sources and approach artists who have been through the ‘same’ learning curve as it were to reach the path of prosperity. You must take into consideration competition that may exist in your chosen field. You must prepare a good foundation – this can be done using the information within the pages of this blog.

2. Your artwork may be exceptionally beautiful, but without understanding the dynamics of the market place your work may not blossom.

3. From your personal perspective your work may seem to have great potential. However, it is relevant to appreciate the views of the general public – in other words your potential buyers.

Do not get into the rut that most do, “hearing what we want to hear” this is a type of preconditioning that can bring untold misery.

4. You must look into other areas to develop your potential. Expand on subject category/theme, use of various different types of media (e.g. acrylics, oils. Mixed media etc.), deciding on how to promote your work, you may even want to sell originals or reproduce prints perhaps… The possibilities are endless, the question is how determined you are in your quest to succeed.

The psychology of success depends on number of factors, but the one I believe that is most vital is self-belief. Most people never get the first stage of success because they lack this characteristic, which is essential.
Such conditioning often stems from your personal experiences, but the causative factor is environment, which has already been discussed. Though it is good to be cautious about anything that you do in life, it is equally essential that you do not get tangled into the technicalities of the ‘process’, but rather focus on the benefits and the ultimate reward that it yields.

Dedicate your goal to achieving success by implementing the five cardinal words beginning with the letter D to your success, namely Devotion, Discrimination, Discipline, Determination and Duty.

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There is no harm in raising questions regarding proposals that come your way or even business opportunities you intend pursuing. So long as these questions afford all the answers and that you decide to follow through considering all the factors, then it is all well and good.

However, when your questions defeat the very purpose of your inquiry then it becomes a ‘vicious cycle’.
Why, what, where, when, who are words that we often use to ascertain information about everything in life including business ventures – thus giving rise to questions

The question with the word why is a necessity for it will help us draw a perfect conclusion and help us overcome doubts. The problem with this is that if you are not clear about your goal(s), then the very question why you wish to even pursue the venture becomes meaningless.

What you must consider are probable long-term goals, benefits and how your first step to wealth and success will enable you to enjoy greater heights.