Friday, August 21, 2015

Money in the Game

An old instructor of mine mentioned once how having money in the game can drastically change your outlook at events. His experience had to do with horse racing. A friend invited him to the track one time. All around him, people were screaming and shouting, and he wondered what the fuss was all about. Then his friend told him to place a bet on a horse, any horse. "I tell you, by the next race, I was yelling myself hoarse," he said.

I'm still not one for the races or the cockpit, but over the past couple of years, I can relate to the experience. I put some of my extra money in an indexed equity fund, and I fell like my insides have been alternately heaving and swelling with every uptick or downtick of the stock market. Talk about involvement!

Its genesis had to do with a friend who played the stocks. Somehow, he had parlayed an investment of P60,000 (or something) to P200,000 (or something). It got me to thinking why I couldn't do the same. "But you have to have an iron stomach," he warned.

I never did get around to enrolling my trading account. Apprehension, ennui, work: you can name whatever reason, you'll probably land one close. But the alternative opportunity came after I invited a banker to talk about investment instruments to my technopreneurship class.

The talk came about around the time I had a small windfall from a project. All my life, I'd placed myself in the conservative risk appetite category. Perhaps it was time to go aggressive? I held my breath and I took the plunge.

And what do you know? Within a month, I'd already gotten some paper gains, more than I would have received from a time deposit. I was stoked! Then a month later, the stock market went down and I suddenly found myself with paper losses, down from my initial investment. My first instinct was to pull out my money. Then I recalled the words of my friend. "Iron stomach," I reminded myself, "iron stomach." So I kept it in.

By the tail end of 2014, I was back in the black, and how! The stock market was on the rise, and so was my investment. By the early part of 2015, I put in a little bit more. The stock market was white hot. My combined placements were netting me a nice sum. The index was past 8,000 and optimistic forecasts had it going to 8,500!

Then, bam. Down again. Stupid PNoy. Shouldn't have rung that opening bell. That well just jinxed it.

Times like these, I wish I'd learned the basics of finance and investment early on. Unfortunately, they don't teach it in school, not unless you're a business major. There's that curse of overspecialization again. Which is a darned shame, because handling money (and risk) beyond the basic household budget is something everyone should know. I wish we'd get these lessons from reputable sources. Instead, we have to learn these from friends, charlatans, and feel-good prophets who mix business with religion. It's hard to tell which is which.

Then again, experience is still the best teacher. Right now, I'm still in the black, but not by much. I lost more than half the paper gains I made at the height of the index, but that's how it goes. "Iron stomach, iron stomach," I chant to myself. However this turns out, it really has put me in touch with the rest of the world. A few years ago, I would have wondered what all the fuss with Greece was all about; now I feel the jitters every time I read about China's shenanigans. Nothing quite like having money in the game to change your outlook on events.