The road to financial independence may be long and tough, but there are actually two proven ways to get there. Launching a business is one. With this choice, you might need to invest time to manage the daily operations. At the same time, you need to have sufficient funds for the working capital and asset acquisition. The second option would be to invest in the Philippine stock market. This option allows you to invest in a range of local and international businesses.
Let’s take for instance Bro. Bo Sanchez. He ventures in both options and has been reaping the rewards of both worlds, earning from at least 16 income sources monthly. In his Truly Rich Club site, he says:
“For twenty years, I was a poor missionary… But over ten years ago, I began to change my beliefs. (Which by the way is where all radical changes start. As the Bible says, “By your faith, it shall be done unto you.”)… I chose to become an entrepreneur. I now run businesses, invest in real estate properties, and invest in stocks and other paper assets.”
As a firm believer of “money as a blessing,” Bro. Bo urges his friends and even his housemaids to invest in stocks and other investment vehicles to increase their net worth. But why should you do the same? How can you be sure that you can emulate the previous successes of other investors?
What are the benefits of investing in stocks
Many who have tried investing in the stock market can attest to the long-term benefits of this kind of venture. Even the process of learning the seemingly intimidating financial terms and concepts can help raise one’s awareness about the importance of handling money. Specifically, these are the four-fold perks stock market investors enjoy:
- Company ownership – Stock investing allows you to bet on large-scale companies with proven track records of good business performance. This is an opportunity ordinary people don’t have access to. If you have a stock trading account, you can buy and sell company shares of the country’s leading companies such as and Jollibee, GMA and the SM retail stores. In short, investing in stocks makes you a part-owner of your company of choice.
Last Year Jollibee stock flow sample:
But why are companies selling their company shares, by the way? Companies submit their business details to the Philippine Stock Exchange to be considered a publicly listed enterprise. This allows them to pool funds from the people, without borrowing high-interest money from banks or ruining their cash flow.
- Liquid funds – Investing in stocks keeps your assets liquid, which means it can easily be convertible to cash. Shares as assets can easily be sold or bought, unlike properties wherein you still need to process legal documents if you decide to buy or sell. This type of investment instrument also has a low startup cost, compared with the bank’s time deposit account.
- Higher earning potential – Stock market investing allows people to take advantage of the company’s real-time market value. Investors will be able to earn by taking advantage of the periodic fluctuations of a company’s value, buying stocks when the price drops and selling stocks when the price increases.
- Easy to get started with – You can open a trading account for as low as PHP 5,000 for initial investment, unlike traditional investing that requires you to put in more money. Investors can add more funds to their account on a monthly basis or as they think necessary to purchase more stocks.
How to Get Started?
The best thing about online stock market investing is the fact that you don’t have to be rich to start betting on the country’s largest corporations. You just need to have at least PHP 5,000, an eagerness to learn more about money and the grit to risk your cash on companies you think will generate high ROI. To get started, here are some basic tips to bear in mind.
- Browse the Philippine Stock Exchange (PSE) Academy website to learn the basic concepts of investing. PSE is the country’s public listing of companies. It is where investors can buy or sell stocks. Its site also features loads of resources and instructional materials investors can use to guide their stock purchases.
- Read company and product reviews. Stay up to date with the performance of the country’s companies and products. You should look into the company profile, growth rate and expansion plans to know how the company would do in the future, especially whether its market value will increase or drop.
- Listen to the experts. As much as possible, follow a few blogs by financial experts to learn some tips and tricks of the trade. Read at least one article related to stock market every day to stay informed about the trends of the performance of the country’s businesses. Experts might also give tips on what company to invest next. So you might want to watch out for these tips. Luis Limlingan of Regina Capital, for instance, advises newbie investors that “patience pays in the stock market.” In actual play, Limlingan suggests the public to “pick only two leading stocks among the industry.”
- Consider different sources of funding. A portion of your savings or monthly salary might be your immediate source of start-up funds. Apart from that, you can also apply for a personal loan or other multi-purpose financing to get access to quick cash. Just make sure to partner with a reliable loan solutions concierge to get the chance to compare the rates and perks of different providers.
- Open a trading account with your online stockbroker of choice. View the latest Stockbroker’s Directory. Weigh the benefits and disadvantages of each option carefully to choose the best brokerage firm to partner with.
- Register your stockbroker account as one of your bank account’s merchant billers. Unless you want to undergo the long process of manually sending your money, you might want to integrate your trading and bank accounts. This will make your transactions digital, paperless and easy, especially as you deposit money, transfer funds and buy or sell stocks.
- Watch and analyze the numbers. Visit the Philippine Stock Exchange Inc. site regularly to keep track of the numbers. You don’t need to worry if you’re not that adept with numbers. PSE has a wide range of investor relation materials and resources you can refer to.
- Start buying and selling stocks. If you’ve already done your research and you’re already confident with your knowledge, start investing as soon as possible to begin growing your money. Leverage your initial investment first then starting putting in additional money in your account to buy more stocks.
Stock marketing investing is certainly a game for the gutsy. Entrepreneurship and stock market investing advocate Mica Tan says “No one ever became successful by playing it safe.” Tan started putting in money in stocks at a young age of 13. Ralph Samson, one of the country’s stock market gurus, is definitely right when he said:
“Start small. Practice. Learn and feel the market”
Yes, investing in stocks might be risky, but it is definitely worth a try. The more you practice, the more likely it is that you’ll win. After all, the road to wealth is marred with challenges and opportunities; failure is only for the quitters.
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- How to Buy, Sell, Trade Stocks in the Philippine Stock Exchange Market
- Investment Tips: Quotes from the Philippines’’ Leading Investment Gurus
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