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Saturday, May 28, 2016

Step-by-Step Guide to Investing in the Philippine Stock Market






Many people are doubted to invest in the stock market because they heard that the rich people are the ones who can only invest in the stock market. Others are afraid to lose their money in the stock market. However, if you are being equipped with the financial knowledge and right mindset, you will be discovered that the stock market is the place where you can make money.



Now, I will tell you the step-by-step procedure on how to start investing in the Philippine Stock Market.

Step 1: Have an emergency fund first.

Before you invest in the stock market, please make sure that you have an emergency fund first. An emergency fund is a savings that you keep in your pocket more likely 3 to 6 months of your salary, so that it will protect your investment from withdrawing your shares in the stock market.

Step 2: Have an effective strategy in the stock market.

Once you already have an emergency fund, now ask yourself, "What strategy that I am going to use in the stock market?" What is the most effective strategy to follow? How do I do it?

There are 3 common strategies in the stock market: Buy and Hold, Peso Cost Averaging, and Market Timing.


Buy and Hold is the passive investment strategy that the investor buy shares of stock, and hold it for long term. 
For example, if Luffy bought 10,000 shares of stock ABC, and then he hold it for 20 years. His earning is through dividends. Dividends is the amount of money paid by a company to the shareholders. If Luffy has 10,000 shares and company ABC declared 10 pesos per share, then it calculate as 10,000 X 10 = 100,000 pesos dividends of company ABC. Therefore, Luffy has 100,000 pesos in his dividends.

Peso Cost Averaging is a wealth-building strategy that the investor will invest a fixed amount of stock shares in a certain period of time or interval or regular schedule.
Below is the good example of Peso Cost Averaging:





Market Timing is an active investment strategy that the investor or trader will buy a share of stock at a low price, and sell it in a higher price.
For example, if Luffy buy 1000 shares of stock ABC at a price of 10 pesos per share, then after few hours, the stock price of ABC increase to 15 per share. Luffy sell it at 15 pesos per share. He has capital gain of 5 pesos per share.

Step 3: Invest in Financial or Money Education

Now, you already know the different strategies used in the stock market. But before you start investing in the stock market, you need acquire more knowledge in the stock market. You need to read more articles about Philippine Stock Market, Pesos and Sense, and/or any articles you found in the internet. Try to watch Youtube videos too. You need to build up proper mindset to achieve your goal.

Step 4 : Decide and Take Action.

You need to decide the right strategy that fit into your lifestyle. Take action today to achieve financial freedom. 


Work hard, work smart, and let your assets work hard for you. Happy Investing! 


Related Article:

Learn on how to open an account on COL Financial (The # 1 Stock Broker in the Philippines.)



Source: 
Investopedia
COL Financial