The SharePHIL advocacy pillars and your investment journey

When the Shareholders Association of the Philippines (SharePHIL) was organized in 2010, it was envisioned to complete the institutional governance infrastructure necessary to promote capital market development and to pursue the creation of a level playing field among shareholders. Thus, it is the aim of SharePHIL to serve as a catalyst for a more dynamic and sustainable capital market through investor education and advocating for the protection of shareholders’ rights and promotion of positive shareholder activism. With this in mind, the organization seeks to enable Filipinos to invest wisely, achieve financial security, and contribute to the sustainable socio-economic growth of the country through its strategic pillars:

Educate: provide relevant and enriching content and knowledge support

Equip: provide a framework to adopt an investing mindset and the tools to progress

Empower: promote behavioral change towards a culture of investing, and support policy reforms that benefit retail investors

Engage: nurture a culture of engaged investing where investors are active and informed

Your investment journey: Are you a Buffett or a Soros?

Investors often ask SharePHIL:

 “How do I begin my investment journey”

 “What are the ins and outs of capital markets?

 “What should I look out for? “

 “How can I become a successful investor ?

In response to these questions, let me share these thoughts and my key takeaways from the talk of Mr. Anton Periquet, chairman and CEO of AB Capital & Investment Corp. at SharePHIL’s GMM last June:

 Start with a plan and define your investment horizon so you can establish a framework to achieve your goals. Your investment plan will guide you in navigating the capital markets.

 Study to understand the capital market and equip yourself with tools, as investing is both a science and an art. Read up on finance and relevant topics and do not be threatened by seemingly complicated finance concepts. While Mr. Periquet does not think a recession will occur in the next 12 to 18 months, he expects the Philippine markets to remain flat. However, with the appreciation of the US dollar and the further weakening of the peso, there will be pressure on share prices, and as local interest rates increase to keep up with global markets, local fixed income options will struggle to be an attractive option to investors.

 Define your investment strategy and philosophy. When asked about his investment philosophy Anton Periquet shared that he considers himself an investor who looks at a company’s fundamentals, adopting the perspective of someone acquiring a small piece of the business. He keeps his investment through “ups and downs” until these bear fruit. Like Warren Buffet, one of the most successful investors in the world who employs a value investing strategy by seeking out companies that exhibit strong fundamentals. Buffet’s simple investment style is summed up in his philosophy to “never invest in a business you cannot understand.”

On the other hand a “trader” is someone who is volatile and strong-willed, who enters and exits rising and falling markets to take positions over a shorter time frame, while taking smaller and more frequent profits. This is a key characteristic of George Soros who has been described as a speculator who relies on short-term volatility and highly leveraged transactions.

Choose your investment based on your level of knowledge, personality, and resources. Do you prefer to diversify or “put all your eggs in one basket”? One could start by having a low-risk diversified portfolio and as you gain more experience, you could take more active and aggressive positions.

On how to choose industries for investment consideration, Mr. Periquet looks not only at growth potential, but also puts importance on the degree of concentration and level of competition, as a business in a highly competitive industry may not be sustainable. Specific to the renewable energy industry, he spoke of a “revolution,” which will have survivors and casualties as only a few can deliver the quality required, so his advice is to choose companies carefully in these industries.

On examining the corporate governance practices of a company, especially family-owned businesses, he cited the increasing focus on the oversight of related party transactions under the leadership of independent directors, which bodes well for the protection of minority shareholders, which includes retail investors. He added that there are many family-owned and managed businesses that have performed well and survived despite the common belief that such businesses do not last longer than the first or second generations.

Take advice from trusted sources and deal only with investment professionals with whom you share a common interest. In the end, the decision is for you to make if you remain honest with yourself and your motivations.

Be on this journey for the “long haul” as the investment process is long and success will not come easy. You will likely make mistakes, but these will be a good source of lessons . Remember that the market is volatile and many factors are outside of your control.

That said, would you like to be an investor like Warren Buffet who made his first investment at the age of 11 and whose holding company Berkshire Hathaway is estimated to have a value of more than $760 billion as of April 2022 or a trader like George Soros who manages several hedge funds, managing about $8.4 billion in assets? Despite their different investment strategies, both men are regarded as two of the most brilliant investing minds who are both successful in their own right.

Whatever path you choose to take, success in your investment journey will not happen overnight. You will need patience to learn the ropes of this challenging space.

View the full discussion with Mr. Periquet on the SharePHIL YouTube channel https://youtu.be/NecEZ3vq1nk?t=1193. To learn more about SharePHIL, visit us at https://sharephil.org.

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The author, Ma. Aurora “Boots” Geotina-Garcia is vice chairperson of SharePHIL, and vice chairperson and president of the Institute of Corporate Directors. She is also president of Mageo Consulting Inc., a corporate finance advisory services firm.