01/06/2026
THE STOCK MARKET FELL. SHOULD YOU PANIC?
The Philippine stock market recently fell to one of its lowest levels in months.
Many investors immediately became worried.
"May economic crisis!"
"Baka bumabagsak na ang mga kumpanya."
From what i have read and learned,
much of the recent selling
had little to do with the actual businesses?
A large part of the decline
came from something called MSCI Rebalancing.
In simple English, some of the world's largest investment funds
were required to sell certain stocks
because their investment rules changed-
not because the companies suddenly became weaker.
Did BDO Unibank, Inc.
suddenly stop being one of the country's biggest banks?
Did SM Investments Corporation
suddenly lose its malls, banks, and retail businesses?
Did Jollibee Foods Corporation
suddenly stop serving customers around the world?
Did International Container Terminal Services, Inc.
suddenly stop operating ports?
The businesses were largely the same.
The stock prices simply moved
because large global funds were required to sell.
And this is where many investors get confused.
so a PERAktikal Insight:
The average investor sees a falling stock price and says:
"Naku, bumabagsak na. Benta na!"
The disciplined investor asks:
"May problema ba talaga ang negosyo,
o bumaba lang ang presyo?"
Those are two very different questions.
Remember:
Price is what you see.
Value is what you own.
This is exactly why I often advise ordinary investors
to focus on quality blue-chip companies
and equity-based pooled funds.
If you own shares of companies such as
BDO, SM, Jollibee, ICTSI, Meralco, Ayala,
or similar blue-chip businesses-
or if you invest through equity mutual funds,
UITFs, or PERA equity funds..
your focus should not be on what happened in one day.
Your focus should be on what those businesses can become
over the next 5, 10, or 20 years.
Sometimes stock prices fall because businesses become weaker.
But sometimes stock prices fall
because large institutions are simply forced to sell.
Knowing the difference can prevent costly emotional decisions.
The stock market is the only place where people run away
when quality businesses go on sale.
Before you panic, ask yourself:
Has the business become weaker?
Or has the price simply become cheaper?
Because long-term wealth is often built
by patient investors who can tell the difference.
