[dropcap background=”” color=”” circle=”0″]W[/dropcap]hen investing in the stock market, there are two statements one needs to keep in mind, among other things: You won’t get rich and you can’t afford to make big mistakes while you’re young. These are just some of the 12 investing principles award-winning financial analyst Andrew Stotz stressed at the jam-packed Salrial Hall of De La Salle University-Dasmarinas (DLSU-D) on Thursday, October 2. Stotz, president of CFA Society Thailand, flew to Manila, Philippines to talk to over a hundred senior students of accounting, business administration, and economics.
The wonders of compound interest
“You won’t get rich in the stock market unless you change the way you think about it,” Stotz told the students. “Greed is very powerful, it causes people to make mistakes.” The Bangkok-based Thammasat University adjunct professor added that investors should set realistic expected returns when dealing with the unpredictable moves of the stock market. A return of 8 to 10% is ideal, as it is a dramatic jump compared to the usual interest rates of time deposits and savings accounts.
“Compound interest is the only sure-fire way to get rich — it just takes 30 years,” an enthusiastic Stotz kid the young audience. Compound interest is the interest gained on interest when money is invested in for example equities, bonds or both. This makes it advantageous for investors who will start early, as “time is money”, Stotz said. The younger a person is, the longer his investment horizon is.
Age is not an excuse
“Forget about the advice that says you can make mistakes while you’re young,” Stotz told the Filipino students. The award-winning analyst challenged the audience to be responsible enough to avoid big mistakes because a “1,000 lost when you are 25 is actually 10,000 lost at 60.” He also wanted the students to save money early on so they can invest, and avoid unnecessary splurges when they graduate and receive paychecks. “Take pride in spending much less than your monthly income,” Stotz said.
Philippines campus tour
Stotz is touring four other Philippine universities from October 3 to 4, namely University of Mindanao (8 a.m. to 12 p.m. on Friday); Ateneo de Davao University (2 p.m. to 4 p.m. also on Friday); Colegio San Juan de Letran (8 a.m. to 12 p.m. on Saturday); and DLSU Taft Main (2 p.m. to 4 p.m., Saturday). He plans to come back to Manila for another round of talks for students on investing principles as part of his advocacy to teach financial literacy.
Stotz is also set to publish his 12 investing principles book to help simplify stock market knowledge to all ages, particularly to the 20s to 30s age group. “The Philippines is the youngest population in Asia and my target for these talks are the young people. They are also very eager to learn about investing,” the valuation expert said when asked as to why he picked the country for his tour. People interested to know more about Stotz’ investing principles and upcoming events can sign up for free in his website, www.andrewstotz.com. Announcements regarding his book launch will also be distributed first to those who register their email addresses.
Danielle is set to cover the three-day university tour of Andrew Stotz in the Philippines from October 2 to 4, 2014. She will discuss each of Andrew’s 12 investment principles from her perspective. All articles will be posted here on www.andrewstotz.com.