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The Road to Becoming Stocks Smart

By Tara Cabullo, Brighterlife.com.ph

Comments (11)

Smart-Pig-Bunny“When you’re ready, the teacher will come,” said my yoga teacher, when about two years ago, I began going to Ashtanga Yoga.

One Saturday some months ago, while my friends were busy preparing for a half marathon, I was conquering a different fear: getting to know the ropes of the stock market. It was after six months of debacles with a friend to get me into the world of stock market.

Fifteen years after my first ever stock certificate, I am finally getting to know the Philippine Stock Market, thanks to a friend, Marvin Germo, who is doing a great job in educating the Philippine market about the world of stocks.

As a newbie, I thought I’d share some of the stuff I learned over the weekend:

1. Companies who go into stock market sell their shares for the public to buy it. The money they raise from the IPO (Initial Public Offering) is often used for expansion projects or looking for additional financial capital.

2. A stock market is like an actual market: there are buyers and sellers, who will trade for a certain price.

3. Before thinking of all the money you can earn in the stock market, list down your goals first on why you want to earn money.

4. Make sure you’ve stashed away your emergency fund and that you’re not using it to invest. This keeps you from giving yourself mini heart stress when the stock market goes up and down. 

5. There are two ways to earn from the stock market:

a) Capital Appreciation – say you buy Stock A at PHP 1.00 today. When its price goes up to say, PHP 1.20 and you sell your shares, you earn PHP 0.20. The same way, you can also lose, if you buy at PHP 1.20, its price goes back to PHP 1.00 the next day and you sell.

b) Dividends. When the stocks you buy are what they call “Preferred Stocks,” the company owning the preferred stocks release dividends, usually annually. As a word of advice though, always check the track record of the company when buying preferred stocks for dividends.

6. A stock’s price is not dictated by the actual worth of the company. Often, it is dictated by the market’s pulse: on how much should it cost per share.

7. The Philippine Stock Exchange Index (PSEi) is the list of top 30 most active companies in the stock market. It tells one at a glance where the market is going, up or down. If you’re a newbie, best to invest in PSEi-listed companies first, according to Marvin Germo.

8. One’s reason for investing (buying a company’s stock) should be based on a grounded reasoning and strong belief that THAT company will get better. This will help one tide over some days when the stock market fluctuates due to speculations and external factors. It is for this reason that investors should always be in the know of things. Read the news always and conduct your research well.

9. A bullish market is when there are more buyers than sellers. A bearish market is when there are more sellers than buyers. It is a simple application of the law of supply and demand.

10. There are two kinds of traders: the short term and the long-term investors. As I had discovered, while the stock market is deemed volatile, the stock market is a friend for the long haul. While they will NOT always behave like this, it is good to note that things do go up after a long time.

 

Image credit: Tumblr

Elvin @ Journey To Millions on

I totally agree with #3. Before investing in the stock market, be sure to have a clear set of goals first.

My road to stock market started when I bought Bo Sanchez’ book entitled 8 Secrets of the Truly Rich.

Astrid El-khatib on

It’s also important to take note that the emotions fear and greed are your enemies in investing as it will make you choose poor decisions. Invest only what you don’t need in the near future so you won’t be very fearful and have a lot of patience, don’t adapt the get-rich-quick mentality.

    Arnold Billones on

    Hi Eric Vitingco, I’m a Sunlife Financial Advisor and I would be glad to assist you regarding your queries on investment. You can add me on Facebook and message me your contact number. we can start from there. Thanks and God Bless!

      Chad on

      I am interested but I don’t know how and where to start

    Arnold Billones on

    Hi Eric Vitingco, I’m a Sunlife Financial Advisor and I would be glad to assist you regarding your queries on investment. You can add me on Facebook and message me your contact number. we can start from there. Or you can just pm me your contact number. Thanks and God Bless!

    Arnold Billones on

    Hi Eric Vitingco, im a Sunlife financial Advisor and I would be glad to assist you ron your queries regarding investment. You can add me on facebook and pm me your contact number. We can start from there. Thanks and. God Bless

Make Easy Money Fast on

You may certainly visit knowledge of the actual artwork you are submitting. Your segment hopes for much more fervent authors that you that may not be scared to convey that they think. At all times observe the soul.

    Chum Ocenar on

    I am planning to save more money and invest them in stock market. It’s very hard to make your money grow if you only depend on your salary. I honestly don’t know where to start. I know that investing can be risky but I am willing to get myself educated about the game.

ronrico bernal on

help me regarding stock market… minimum requirement amount?

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