In 2018, Marion Evangelista’s sister opened a pharmacy franchise with high hopes. She put in ₱800,000, betting that daily sales would hit at least ₱1,000 to keep things sustainable.
“For the first few months, things looked good,” Evangelista told Financial Adviser PH. “But after half a year, sales slowed down. More cash was poured in just to keep the doors open, and three months later, the business had to close.”
Looking back, Evangelista—now a Registered Financial Planner (RFP)—believes a simple rule could have saved the family hundreds of thousands of pesos: a stop-loss strategy.
Why Stop-Loss Matters More Than You Think
In finance, a stop-loss is a predetermined point where you decide to cut your losses. Traders use it when a stock falls below a set price. But Evangelista says the same idea works for entrepreneurs, investors, and even ordinary Filipinos who lend money.
“Stop-loss is about boundaries,” he said. “You decide ahead of time how much loss you’re willing to take, so you can protect your future instead of letting emotions drain your wallet.”
Don’t Let Hype Empty Your Pocket
Evangelista knows the pain firsthand. Years ago, he bought into an IPO during peak hype. He thought the price would climb, but without a stop-loss, he froze as the stock kept sinking.
“I lost nearly half of my money because I had no plan,” he admitted. “If you don’t set rules for yourself, emotions will control your decisions.”
His advice: never invest just because everyone else is excited. Always pair opportunity with a clear exit strategy.
Even Lending Needs a Stop-Loss
Stop-loss thinking isn’t just for stocks or businesses. Evangelista says it applies even when lending money to friends or family.
“Let’s say a cousin borrows cash and hasn’t fully paid yet but asks again,” he explained. “It’s tough to say no, but that’s when you need a stop-loss rule.”
Financial planners recommend only lending what you can afford to lose. Once that line is crossed, the answer should always be no. Otherwise, your generosity can spiral into financial stress.
What to Do After You Cut Your Losses
Evangelista stresses that stop-loss is only the first step. What comes after matters just as much.
“Traders might shift their money into another sector. Entrepreneurs can park their cash in a digital bank or money market fund while revising their strategy. The idea is: don’t just stop—redirect,” he said.
This approach keeps your capital safe and ready for the next opportunity, instead of letting a failed venture drain everything.
The Big Picture
For Evangelista, stop-loss is not about being risk-averse. It’s about survival.
“Profit will always be the goal—whether you’re a business owner, a trader, or an investor,” he said. “But profit only comes if you protect yourself from catastrophic losses. Stop-loss gives you that protection.”
And his advice for Filipinos trying to build wealth? Keep it simple:
“Maximize your profits, minimize your losses. That’s the end goal. Stop-loss isn’t about being afraid of risk—it’s about living to fight another day.”
