How to Invest in Philippine Stock Market for Beginners
Content
How to Invest in Philippine Stock Market for
Beginners
How to Invest in Philippine Stock Market –
Tips, Tricks, Stock Picks, Recommendations
& Free Online Lessons & Tutorials for
Beginners
If you are
A beginner in the Philippine stock market totally blank and clueless about stocks and
investing in Philippines stocks echange
Or an already-investor but looking to have a more practical understanding of investing in
the Philippine stocks market
then this is definitely the page for you.
Here you’ll finally be able to nail down the basics and essentials of investing in the Philippine
stock market even if you have zero experience.
The goal is to give you as few information as possible so you can start quickly but never
carelessly. Few info lang muna because I want you to avoid information overload which
frustrates newbies that stop them in taking the first steps. Time is your best ally when it comes to
investing, so making sure that you start as soon as possible is of utmost importance for you. With
that said, you can download our quick start guide to investing in Philippine market pdf for
beginners here. It’s the summary form of this page =).
Let’s begin!
In this page, expect that
You’ll be able to confidently start your baby moves as a beginner in the Philippine stock
market world.
You’ll also have access to various tool and resources that will equip and help you more as
you go along your financial journey of investing
You’ll learn where you can get your personal support group to cheer you up, holding your
hands while you’re just starting investing and shortening your learning curve
And lastly and more importantly, you’ll have a sound mindset that will keep pushing and
inspiring you and that is far more rewarding than any profit you can get in the stock
market. Why focus on mindset? Because maniwala ka o sa hindi, your money problems is
90% mind problems. And soon you’ll realize that investing in Philippine stock exchange
has also got to do with controlling this mindset.
Note: What follows are my first-hand experiences when I was starting in this stocks investing
thing. Enclosed in green boxes (like this one) are the actual steps I recommend to you based on
what I have learned so far, with some links to simple tutorials for beginners to help you jump
start your investing journey in Philippine Stock Market. In case you have other questions on each
of those steps, just let me know in the comments below.
My First Days in the Philippine Stock
Market
But before that, let me share my own story how I actually started investing. I was really ignorant
financially before, let alone on investing in the Philippine stock market.Totally had no idea about
financial and investment ek-ek ( I finished a highly technical engineering degree!).
I just first considered thinking about stock investing weeks after I had read Bro Bo’s book which
ignited my financial freedom expedition. Then it was followed by an invitation from one of my
lecturers during my board exam review.
Up to now, I could still clearly remember how that kind professor said his regret on his late entry
to the market. That it took him many long years before he and the stock market met along the
road.
So when I finally decided to give it a try, I went the next day to an online trading brokerage firm.
I started really small – 10k lang. (Yes you can start with as small as 5k lang actually).
Just like starting anew in anything, my clueless personality made all the moves for me in a wide
vast field of unknown.
All I had to hold on was my mustard dream of financial freedom and the belief that stock
investing might be a path for that dream. I managed to cut the chase, and applied for an account.
STEP 1: Assuming you’ve learned the basics of financial planning and decided to go into
directly investing in Philippine Stock Market, the first step you’d need to do is to open a stock
trading account. This account is the one you’re going to use to actually buy and sell stocks or
shares of companies.
For beginners, I recommend opening an ONLINE stock trading account because of the
convenience it offers compared to a traditional broker.
Unlike using traditional brokers which is the practice before where you have to call your live
broker to place stock orders in your behalf, having an online trading account allows you to do the
same on your internet-connected computer/mobile screen on your own, anytime and anywhere
(even if you’re outside the Philippines).
Opening an online trading account is just like opening a regular bank account (think of your
payroll/ATM). All you have to do is go to the website of your preferred online broker, read the
account opening instructions, download all the forms,fill them out and submit it together with all
the other requirements to their office. After submission, you just wait within the next 2-3 days
for their email confirming that your trading account is ready for step 2 – which is funding it.
I have made in this review post a summary of four online brokers you can choose from – COL
Financial, First Metro Securities, Philstocks and BPI Trade, and at the end shared my
recommendation.
You can also check HERE a simple tutorial on completing this first step with the click by click
tutorial shown below that will guide you how to open account in COL Financial (formerly
Citiseconline) as online stock broker.
My First Purchase in Philippine Stock
Market
Philstocks was my first online broker, precisely because it was the one I initially found out in the
net that required only 5000 initial deposit to actually start trading. But now I discovered that you
can start opening your online trading account just by opening a bank account even if you don’t
have 5k, like in the case of online brokerage firms BPI Trade and FirstMetroSec. Currently
though I’m happy as a loyal client of COL Financial, formerly Citiseconline.
Minimum investment required was 5000, but I put down 10k just to put a front that I have more
than the minimum. Pride I guess haha. The lady in charge gracefully accepted it after examining
my forms, then handed me an official receipt, which was also the highest-valued receipt I
received ever since.
With my humble 10k initial investment, I was too excited to buy a company share and brand
myself a part-owner of a giant company. Hard-core traders would laugh on me for that, but I was
already more than happy just giving it a try.
STEP 2: After opening your online trading account and receiving an email confirmation from
your chosen online brokerage firm that your account is ready, the next thing you’d need to do is
to FUND your account.
You can actually do this during your account opening day in their office by making an initial
deposit just like what I did above but you also have the option to postpone this and just do the
funding after you’ve received their email confirmation containing your account details. This
email will include your account number which you’ll use in your funding-your-account step.
Note that your initial deposit already forms part of your investments which you can use to buy
your first stock.
Funding your trading account works via merchant payment through a bank
(BPI/BDO/Metrobank). If you’re aware of paying utility bills(Meralco/Mobile plan) through
banks’ merchant payment, that’s exactly it, with the difference that you use your trading account
details given to you by your broker through your email.
An example taken from online broker COL Financial website is shown below for manual bank
deposits.
What I recommend though is the more convenient option which is doing merchant payment
online with your bank’s online system (ex: via BPI Express Online as below).
There’s NO required monthly funding
How much you’re going to put to your trading account on top of the initial deposit you is
completely up to you. While your online broker may require a minimum of Php5,000 initial
deposit to activate your trading account (activation means your account is ready to buy your first
stock), it’s all your decision whether to add more on that later on. As such, there’s totally NO
required amount you need to add regularly (weekly, monthly, etc) to your investments. However,
take note that your buying power will obviously depend on the amount of fund you put into your
trading account.
Check on the respective procedure of your online broker on this step but this should be a very
simple task.
The moment I received my account details in my email after few days ready with buying power
from my initial 10k deposit, I made my first stock order.
And my first ever transaction: buying 2000 shares of Megaworld Corporation (stock symbol
MEG) at 1.87 per share!
Total cost is 3763.60 only. Wheee!
My first transaction: buying 2000 shares of Megaworld Corporation (code MEG) at 1.87
per share
I was actually totally clueless on what to buy for the first time, and only got the hint of buying
MEG from that same professor who’s teaching in our board exam review.
Recollecting, when the class becomes bored with chemical principles and unit operations stuff,
he would start cracking some jokes, and then afterwards would invite us to try investing. He
suggested that we experiment with MEG. His jokes served its purpose, (he’s actually the first to
laugh out even before delivering the punchline!), but I got more curious and gravitated to his
stocks stories and followed his MEG recommendation.
To see how stupid I was that time, I was not even aware that MEG is a real estate developer
company. Haha. Whenever I see its stock code MEG on my computer screen, Sharon Cuneta
entered my mind, you know, the local MEGastar. Booboo!
But who cares? When I posted it online, my computer screen didn’t ask me anyway!
And when it got matched, my heart jumped with joy. I went back to my work, but I smilingly
secretly applauded myself. Deep inside I was telling myself “I hardy spend 500 pesos for a
purchase, and here I am spending 3.7k for something I can’t even touch!” Whaha!
That was August 31 2010, a different Tuesday for me.
STEP 3: Once you have funded you trading account, you now have the cash power to buy your
first stock. You can check the next tutorial for the step-by-step procedure on how to do this –
How to Place your Buy/Sell Orders in Philippine Stock Market.
There are now three questions now you’ll need to answer at this point:
1. What investment strategy are you going to use? Are you going for long-term, short-term or a
mix of it?
2. With the strategy you have in mind, what stocks will you buy? With more than 200 stocks to
choose from, how do you decide what to buy?
3. Given the strategy and the stocks to buy, WHEN do you buy/sell? In other words, what/when
are your entry and exit points?
It is important that your answers to these questions should reflect your goals, time-horizon and
trading skills that you have. Your answers to these will also help lay down your plan for your
investments (which is critical), how much time you’re going to devote and to what extent your
daily routine will be changed.
For newbies, I recommend starting with Peso-Cost Averaging (PCA) while you’re in your
learning curve. This is a simple strategy that involves investing fixed amount of money in giant
companies at regular intervals (monthly, quarterly, etc) over a long period. This is a totally
passive approach which does not entail daily monitoring. You can learn more about it here.
Personally though, I’m primarily using a modified PCA called Strategic Averaging Method
which answers all the three questions above. It is designed for those who want to maximize their
stock investments without drastically changing your daily routine. You can check here for its
details.
My First Profit from Philippine Stock
Market
Two days after, I checked my account online, and BANG! I saw a shock of my life! The price of
MEG went up to 2.05!
I was thrilled! How can multiplying money be that easy, I thought! Feeling all the excitement, I
decided to sell it right away at that price. I posted a sell off-hour (after trading hours) order at
2.05 per share that afternoon, and was hit the next morning. Paper profits( meaning profits that’s
still virtual until actually sold) became actual realized gains!
I did the math, ‘twas more than 200 pesos gain just for three days. Hmm, not bad at first sight.I
don’t think I can spot the same by whole-day roaming along the busy streets of Metro Manila.
But computing the rate of return, that’s more than 9% gain in just three-day period of time! That
was obviously not REALLY bad! (Note: To compare, your money in your favorite bank grows at
less than 1% a year).
I disclosed below a snapshot of what I have experienced later on that year 2010 just as a
beginner.
As you can see above, my second buy of stock was 2000 shares MPI at 3.55 per share.
I couldn’t remember where I got the inspiration of buying Pangilinan-owned MPI as my next
move, (I guess from some rumors), but elated by price appreciation I had in MEG in just three
days, I purchased 2000 shares of it the next trading day. After just one week and one day, seeing
another good return, I immediately put a sell order, and broom, that’s instantly more than 7%
gain!
The next was even more fantastic and ecstatic.
I still remember when my Math reviewer this time said “Mahina nako pag di umabot ng dose
[yung price] ang SMDC”. He appeared to me as experienced enough to give such a prediction.
So innocently and experimentally relying again on that advise alone and trusting his instincts,
(without knowing yet about fundamental and technical analysis), I entered a buy order for 1000
shares of SMDC. Seeing it was executed, I went back to my job, and waited what would happen
next.
But lo and behold, in only just two weeks, its price went up high to 10.36. Super amazed by the
profits in a very short period of time, I immediately grabbed the chance, and reaped that
whopping 21% gain. Waaah!!!
As you can see from the list, the profits was even followed by other buckets coming from MEG
and FLI.
I bought 3000 shares of FLI and another 3000 shares of MEG at 2.49 at the same day. The 3000
shares of FLI though took a longer time to appreciate, that I needed to average down by buying
another 3000 shares at 1.27 per share until I finally sold it all at 1.35 per share a gain of almost
2% ,still bigger than the interest rate of banks .
But the 3000 MEG shares I sold immediately when made its way up to 2.78 per share at an
enormous 13% gain in just three weeks.
Is your money sleeping in the bank?
Here comes the more interesting part.
You can check the prices of the stocks mentioned above and you’ll find out how stock market
could be a GREAT OPTION when it comes to growing one’s wealth for the LONG TERM.
As of market closing on May 14 2014, MEG’s price is 4.68. FLI is 1.65 while MPI is 5.23.
SMDC had been delisted though while JFC is now 176.
Disclaimer: Past performance doesn’t guarantee that you’ll have the exact same results in the
future.
This does not include yet the dividends given for the last 3+ years.This gives us an insight as to
the common observation that the rich gets richer. The truth is that there are many available
vehicles to ride on that make wealth building and protection a lot easier. And investing in the
stock market is just one of it.
Now digest all those figures and start your imagination.Henry Sy’s BDO and Ayala’s BPI will
never ever offer such interest rate in your savings accounts.
What they would skillfully try to do instead is to attract every individual employee to deposit
their hard-earned money in the form of savings, time-deposit accounts, checking accounts or any
other fancy name, invest them wisely to buy shares just like what I did, obtain that 10%-20%
gain in a matter of DAYS with their trading skills, and as a sign of respect and thanksgiving after
leveraging on your money, give you a 0.5-2.5% ANNUAL interest as consolation and solace.
Now you know how they can afford to build and maintain those large air-conditioned buildings
and pay all their bankers and managers.
Beginner’s Luck
Now I m not sure if those consecutive gains is just what they call beginner’s luck, but that great
performance really caught my interest towards the stock market as a vehicle to achieving some
of my goals.
At this point, it would be careless of me if I would not mention the fact that even though I earned
during my first days in the market, remember that the risk of losing money will always be there.
And so it’s important not to be carried away by the returns mentioned above and balance your
view with the risks always involved.
My Current Investing Strategy
Fast-forward, now I’m still learning, and… earning.
In fact, many times I get surprised when I check my email and be notified by the money being
added into my account as dividends I received as an investor (without doing any active work
except to invest). In the sample below, just the dividend pay-out alone already beats the bank’s
savings account interest! (A dividend is a payment made by a corporation to its shareholders,
usually as a distribution of profits. You’ll learn more about this in the lessons below.)
One way of making money in the stock market is through dividends
As mentioned above, I primarily use now the Strategic Averaging Method (SAM) which has
removed all the stress in all my investing decisions. I believe it’s the easiest way of growing
one’s wealth through the stock market in the long term. (You can learn more about this strategy
here.)
And looking back, I realized I was very lucky I started doing this early in my life. At least, may
napapala ako (investments) kahit papano in my years of working (without so much analysis).
That way I can enjoy my present life without worrying (or sacrificing) my financial future. Many
people I’ve met through this blog actually showed so much regret on their LATE entry in
preparing for their financial future. And this is one of the reason why I started this blog.
To pay it forward, I shared all my learning (mistakes included) in this blog from the point I
started investing with zero knowledge.
So enjoy reading the rest of this page . Share your questions/comments below if you have. Also
subscribe in the form below so you get the latest posts in this site straight in your email.
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Name:
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You can also stop muna at this point and ponder how investing in Philippine stock market may
help you in achieving some of your financial goals.
Pero kung nagmamadali ka na talaga, watch the short introductory video I made here where I
summarized the basics that you need to know and do to actually start investing in Philippine
Stock Market. After watching, just follow the suggestions outlined below for more guidance.
SUGGESTION A: As good introduction into investing in stocks, you can read My Maid Invests
in the Stock Market… and Why You Should, Too! by Bo Sanchez. I personally started with this
tiny book
This is a light very interesting read with not so much financial jargons.
It’s just like you’re reading children story, but this time a story that can change your life.
Download you FREE ebook HERE.
SUGGESTION B: Make sure to download your second investing ebook I published based from
my own experiences.
Your free ebook is specifically designed for absolute beginners, much like an introduction to a
vast knowledge about stock market.
All the basic topics you need to know to start investing are shortly discussed there.
Time to read the ebook is only 15 to 30 minutes, which means you can be mentally prepared
buying your first stock in a matter of less than an hour!
Simply subscribe HERE with your facebook account and the link to download will be sent to
your email inbox right away!
SUGGESTION C: Browse through the outline below to get a more comprehensive discussion
of your selected topic, only if you want.
The eBook above you’ll be receiving should actually be enough for you as a warm-up; but
should you want to upgrade your investing knowledge, simply go through the list of contents
below and find answers to your questions.
SUGGESTION D: Lastly, if you have other more specific questions needing urgent answers,
then let other more experienced investors help you. Who can help you better than those people
doing it now, right?
Meet other Pinoy Investors!
Join me in our facebook group/forum dedicated to readers of this blog- Smart Pinoy Investor
with Omeng Tawid – and be immersed with free information (fun and laughter too!) coming
from those who have already experienced the hang of it. You can access the group here and meet
other Pinoys learning about this Philippine stock market thing. Also like our facebook page for
quick tips through your social network accounts.
Have your personal support group too!
From my personal experience, I realized achieving something is a lot easier if you have a
personal support group to cheer and back you up and a strong commitment statement!
Many are now doing it! Are YOU also
IN(vesting)?
So in the form below, just comment “I’M IN(vesting)!”, tag at least two of your friends, include
your short declaration and start your exciting journey to financial freedom together. (S/he’ll
thank you later on!)
Read more http://www.smartpinoyinvestor.com/beginners
Beginners
How to Invest in Philippine Stock Market –
Tips, Tricks, Stock Picks, Recommendations
& Free Online Lessons & Tutorials for
Beginners
If you are
A beginner in the Philippine stock market totally blank and clueless about stocks and
investing in Philippines stocks echange
Or an already-investor but looking to have a more practical understanding of investing in
the Philippine stocks market
then this is definitely the page for you.
Here you’ll finally be able to nail down the basics and essentials of investing in the Philippine
stock market even if you have zero experience.
The goal is to give you as few information as possible so you can start quickly but never
carelessly. Few info lang muna because I want you to avoid information overload which
frustrates newbies that stop them in taking the first steps. Time is your best ally when it comes to
investing, so making sure that you start as soon as possible is of utmost importance for you. With
that said, you can download our quick start guide to investing in Philippine market pdf for
beginners here. It’s the summary form of this page =).
Let’s begin!
In this page, expect that
You’ll be able to confidently start your baby moves as a beginner in the Philippine stock
market world.
You’ll also have access to various tool and resources that will equip and help you more as
you go along your financial journey of investing
You’ll learn where you can get your personal support group to cheer you up, holding your
hands while you’re just starting investing and shortening your learning curve
And lastly and more importantly, you’ll have a sound mindset that will keep pushing and
inspiring you and that is far more rewarding than any profit you can get in the stock
market. Why focus on mindset? Because maniwala ka o sa hindi, your money problems is
90% mind problems. And soon you’ll realize that investing in Philippine stock exchange
has also got to do with controlling this mindset.
Note: What follows are my first-hand experiences when I was starting in this stocks investing
thing. Enclosed in green boxes (like this one) are the actual steps I recommend to you based on
what I have learned so far, with some links to simple tutorials for beginners to help you jump
start your investing journey in Philippine Stock Market. In case you have other questions on each
of those steps, just let me know in the comments below.
My First Days in the Philippine Stock
Market
But before that, let me share my own story how I actually started investing. I was really ignorant
financially before, let alone on investing in the Philippine stock market.Totally had no idea about
financial and investment ek-ek ( I finished a highly technical engineering degree!).
I just first considered thinking about stock investing weeks after I had read Bro Bo’s book which
ignited my financial freedom expedition. Then it was followed by an invitation from one of my
lecturers during my board exam review.
Up to now, I could still clearly remember how that kind professor said his regret on his late entry
to the market. That it took him many long years before he and the stock market met along the
road.
So when I finally decided to give it a try, I went the next day to an online trading brokerage firm.
I started really small – 10k lang. (Yes you can start with as small as 5k lang actually).
Just like starting anew in anything, my clueless personality made all the moves for me in a wide
vast field of unknown.
All I had to hold on was my mustard dream of financial freedom and the belief that stock
investing might be a path for that dream. I managed to cut the chase, and applied for an account.
STEP 1: Assuming you’ve learned the basics of financial planning and decided to go into
directly investing in Philippine Stock Market, the first step you’d need to do is to open a stock
trading account. This account is the one you’re going to use to actually buy and sell stocks or
shares of companies.
For beginners, I recommend opening an ONLINE stock trading account because of the
convenience it offers compared to a traditional broker.
Unlike using traditional brokers which is the practice before where you have to call your live
broker to place stock orders in your behalf, having an online trading account allows you to do the
same on your internet-connected computer/mobile screen on your own, anytime and anywhere
(even if you’re outside the Philippines).
Opening an online trading account is just like opening a regular bank account (think of your
payroll/ATM). All you have to do is go to the website of your preferred online broker, read the
account opening instructions, download all the forms,fill them out and submit it together with all
the other requirements to their office. After submission, you just wait within the next 2-3 days
for their email confirming that your trading account is ready for step 2 – which is funding it.
I have made in this review post a summary of four online brokers you can choose from – COL
Financial, First Metro Securities, Philstocks and BPI Trade, and at the end shared my
recommendation.
You can also check HERE a simple tutorial on completing this first step with the click by click
tutorial shown below that will guide you how to open account in COL Financial (formerly
Citiseconline) as online stock broker.
My First Purchase in Philippine Stock
Market
Philstocks was my first online broker, precisely because it was the one I initially found out in the
net that required only 5000 initial deposit to actually start trading. But now I discovered that you
can start opening your online trading account just by opening a bank account even if you don’t
have 5k, like in the case of online brokerage firms BPI Trade and FirstMetroSec. Currently
though I’m happy as a loyal client of COL Financial, formerly Citiseconline.
Minimum investment required was 5000, but I put down 10k just to put a front that I have more
than the minimum. Pride I guess haha. The lady in charge gracefully accepted it after examining
my forms, then handed me an official receipt, which was also the highest-valued receipt I
received ever since.
With my humble 10k initial investment, I was too excited to buy a company share and brand
myself a part-owner of a giant company. Hard-core traders would laugh on me for that, but I was
already more than happy just giving it a try.
STEP 2: After opening your online trading account and receiving an email confirmation from
your chosen online brokerage firm that your account is ready, the next thing you’d need to do is
to FUND your account.
You can actually do this during your account opening day in their office by making an initial
deposit just like what I did above but you also have the option to postpone this and just do the
funding after you’ve received their email confirmation containing your account details. This
email will include your account number which you’ll use in your funding-your-account step.
Note that your initial deposit already forms part of your investments which you can use to buy
your first stock.
Funding your trading account works via merchant payment through a bank
(BPI/BDO/Metrobank). If you’re aware of paying utility bills(Meralco/Mobile plan) through
banks’ merchant payment, that’s exactly it, with the difference that you use your trading account
details given to you by your broker through your email.
An example taken from online broker COL Financial website is shown below for manual bank
deposits.
What I recommend though is the more convenient option which is doing merchant payment
online with your bank’s online system (ex: via BPI Express Online as below).
There’s NO required monthly funding
How much you’re going to put to your trading account on top of the initial deposit you is
completely up to you. While your online broker may require a minimum of Php5,000 initial
deposit to activate your trading account (activation means your account is ready to buy your first
stock), it’s all your decision whether to add more on that later on. As such, there’s totally NO
required amount you need to add regularly (weekly, monthly, etc) to your investments. However,
take note that your buying power will obviously depend on the amount of fund you put into your
trading account.
Check on the respective procedure of your online broker on this step but this should be a very
simple task.
The moment I received my account details in my email after few days ready with buying power
from my initial 10k deposit, I made my first stock order.
And my first ever transaction: buying 2000 shares of Megaworld Corporation (stock symbol
MEG) at 1.87 per share!
Total cost is 3763.60 only. Wheee!
My first transaction: buying 2000 shares of Megaworld Corporation (code MEG) at 1.87
per share
I was actually totally clueless on what to buy for the first time, and only got the hint of buying
MEG from that same professor who’s teaching in our board exam review.
Recollecting, when the class becomes bored with chemical principles and unit operations stuff,
he would start cracking some jokes, and then afterwards would invite us to try investing. He
suggested that we experiment with MEG. His jokes served its purpose, (he’s actually the first to
laugh out even before delivering the punchline!), but I got more curious and gravitated to his
stocks stories and followed his MEG recommendation.
To see how stupid I was that time, I was not even aware that MEG is a real estate developer
company. Haha. Whenever I see its stock code MEG on my computer screen, Sharon Cuneta
entered my mind, you know, the local MEGastar. Booboo!
But who cares? When I posted it online, my computer screen didn’t ask me anyway!
And when it got matched, my heart jumped with joy. I went back to my work, but I smilingly
secretly applauded myself. Deep inside I was telling myself “I hardy spend 500 pesos for a
purchase, and here I am spending 3.7k for something I can’t even touch!” Whaha!
That was August 31 2010, a different Tuesday for me.
STEP 3: Once you have funded you trading account, you now have the cash power to buy your
first stock. You can check the next tutorial for the step-by-step procedure on how to do this –
How to Place your Buy/Sell Orders in Philippine Stock Market.
There are now three questions now you’ll need to answer at this point:
1. What investment strategy are you going to use? Are you going for long-term, short-term or a
mix of it?
2. With the strategy you have in mind, what stocks will you buy? With more than 200 stocks to
choose from, how do you decide what to buy?
3. Given the strategy and the stocks to buy, WHEN do you buy/sell? In other words, what/when
are your entry and exit points?
It is important that your answers to these questions should reflect your goals, time-horizon and
trading skills that you have. Your answers to these will also help lay down your plan for your
investments (which is critical), how much time you’re going to devote and to what extent your
daily routine will be changed.
For newbies, I recommend starting with Peso-Cost Averaging (PCA) while you’re in your
learning curve. This is a simple strategy that involves investing fixed amount of money in giant
companies at regular intervals (monthly, quarterly, etc) over a long period. This is a totally
passive approach which does not entail daily monitoring. You can learn more about it here.
Personally though, I’m primarily using a modified PCA called Strategic Averaging Method
which answers all the three questions above. It is designed for those who want to maximize their
stock investments without drastically changing your daily routine. You can check here for its
details.
My First Profit from Philippine Stock
Market
Two days after, I checked my account online, and BANG! I saw a shock of my life! The price of
MEG went up to 2.05!
I was thrilled! How can multiplying money be that easy, I thought! Feeling all the excitement, I
decided to sell it right away at that price. I posted a sell off-hour (after trading hours) order at
2.05 per share that afternoon, and was hit the next morning. Paper profits( meaning profits that’s
still virtual until actually sold) became actual realized gains!
I did the math, ‘twas more than 200 pesos gain just for three days. Hmm, not bad at first sight.I
don’t think I can spot the same by whole-day roaming along the busy streets of Metro Manila.
But computing the rate of return, that’s more than 9% gain in just three-day period of time! That
was obviously not REALLY bad! (Note: To compare, your money in your favorite bank grows at
less than 1% a year).
I disclosed below a snapshot of what I have experienced later on that year 2010 just as a
beginner.
As you can see above, my second buy of stock was 2000 shares MPI at 3.55 per share.
I couldn’t remember where I got the inspiration of buying Pangilinan-owned MPI as my next
move, (I guess from some rumors), but elated by price appreciation I had in MEG in just three
days, I purchased 2000 shares of it the next trading day. After just one week and one day, seeing
another good return, I immediately put a sell order, and broom, that’s instantly more than 7%
gain!
The next was even more fantastic and ecstatic.
I still remember when my Math reviewer this time said “Mahina nako pag di umabot ng dose
[yung price] ang SMDC”. He appeared to me as experienced enough to give such a prediction.
So innocently and experimentally relying again on that advise alone and trusting his instincts,
(without knowing yet about fundamental and technical analysis), I entered a buy order for 1000
shares of SMDC. Seeing it was executed, I went back to my job, and waited what would happen
next.
But lo and behold, in only just two weeks, its price went up high to 10.36. Super amazed by the
profits in a very short period of time, I immediately grabbed the chance, and reaped that
whopping 21% gain. Waaah!!!
As you can see from the list, the profits was even followed by other buckets coming from MEG
and FLI.
I bought 3000 shares of FLI and another 3000 shares of MEG at 2.49 at the same day. The 3000
shares of FLI though took a longer time to appreciate, that I needed to average down by buying
another 3000 shares at 1.27 per share until I finally sold it all at 1.35 per share a gain of almost
2% ,still bigger than the interest rate of banks .
But the 3000 MEG shares I sold immediately when made its way up to 2.78 per share at an
enormous 13% gain in just three weeks.
Is your money sleeping in the bank?
Here comes the more interesting part.
You can check the prices of the stocks mentioned above and you’ll find out how stock market
could be a GREAT OPTION when it comes to growing one’s wealth for the LONG TERM.
As of market closing on May 14 2014, MEG’s price is 4.68. FLI is 1.65 while MPI is 5.23.
SMDC had been delisted though while JFC is now 176.
Disclaimer: Past performance doesn’t guarantee that you’ll have the exact same results in the
future.
This does not include yet the dividends given for the last 3+ years.This gives us an insight as to
the common observation that the rich gets richer. The truth is that there are many available
vehicles to ride on that make wealth building and protection a lot easier. And investing in the
stock market is just one of it.
Now digest all those figures and start your imagination.Henry Sy’s BDO and Ayala’s BPI will
never ever offer such interest rate in your savings accounts.
What they would skillfully try to do instead is to attract every individual employee to deposit
their hard-earned money in the form of savings, time-deposit accounts, checking accounts or any
other fancy name, invest them wisely to buy shares just like what I did, obtain that 10%-20%
gain in a matter of DAYS with their trading skills, and as a sign of respect and thanksgiving after
leveraging on your money, give you a 0.5-2.5% ANNUAL interest as consolation and solace.
Now you know how they can afford to build and maintain those large air-conditioned buildings
and pay all their bankers and managers.
Beginner’s Luck
Now I m not sure if those consecutive gains is just what they call beginner’s luck, but that great
performance really caught my interest towards the stock market as a vehicle to achieving some
of my goals.
At this point, it would be careless of me if I would not mention the fact that even though I earned
during my first days in the market, remember that the risk of losing money will always be there.
And so it’s important not to be carried away by the returns mentioned above and balance your
view with the risks always involved.
My Current Investing Strategy
Fast-forward, now I’m still learning, and… earning.
In fact, many times I get surprised when I check my email and be notified by the money being
added into my account as dividends I received as an investor (without doing any active work
except to invest). In the sample below, just the dividend pay-out alone already beats the bank’s
savings account interest! (A dividend is a payment made by a corporation to its shareholders,
usually as a distribution of profits. You’ll learn more about this in the lessons below.)
One way of making money in the stock market is through dividends
As mentioned above, I primarily use now the Strategic Averaging Method (SAM) which has
removed all the stress in all my investing decisions. I believe it’s the easiest way of growing
one’s wealth through the stock market in the long term. (You can learn more about this strategy
here.)
And looking back, I realized I was very lucky I started doing this early in my life. At least, may
napapala ako (investments) kahit papano in my years of working (without so much analysis).
That way I can enjoy my present life without worrying (or sacrificing) my financial future. Many
people I’ve met through this blog actually showed so much regret on their LATE entry in
preparing for their financial future. And this is one of the reason why I started this blog.
To pay it forward, I shared all my learning (mistakes included) in this blog from the point I
started investing with zero knowledge.
So enjoy reading the rest of this page . Share your questions/comments below if you have. Also
subscribe in the form below so you get the latest posts in this site straight in your email.
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You can also stop muna at this point and ponder how investing in Philippine stock market may
help you in achieving some of your financial goals.
Pero kung nagmamadali ka na talaga, watch the short introductory video I made here where I
summarized the basics that you need to know and do to actually start investing in Philippine
Stock Market. After watching, just follow the suggestions outlined below for more guidance.
SUGGESTION A: As good introduction into investing in stocks, you can read My Maid Invests
in the Stock Market… and Why You Should, Too! by Bo Sanchez. I personally started with this
tiny book
This is a light very interesting read with not so much financial jargons.
It’s just like you’re reading children story, but this time a story that can change your life.
Download you FREE ebook HERE.
SUGGESTION B: Make sure to download your second investing ebook I published based from
my own experiences.
Your free ebook is specifically designed for absolute beginners, much like an introduction to a
vast knowledge about stock market.
All the basic topics you need to know to start investing are shortly discussed there.
Time to read the ebook is only 15 to 30 minutes, which means you can be mentally prepared
buying your first stock in a matter of less than an hour!
Simply subscribe HERE with your facebook account and the link to download will be sent to
your email inbox right away!
SUGGESTION C: Browse through the outline below to get a more comprehensive discussion
of your selected topic, only if you want.
The eBook above you’ll be receiving should actually be enough for you as a warm-up; but
should you want to upgrade your investing knowledge, simply go through the list of contents
below and find answers to your questions.
SUGGESTION D: Lastly, if you have other more specific questions needing urgent answers,
then let other more experienced investors help you. Who can help you better than those people
doing it now, right?
Meet other Pinoy Investors!
Join me in our facebook group/forum dedicated to readers of this blog- Smart Pinoy Investor
with Omeng Tawid – and be immersed with free information (fun and laughter too!) coming
from those who have already experienced the hang of it. You can access the group here and meet
other Pinoys learning about this Philippine stock market thing. Also like our facebook page for
quick tips through your social network accounts.
Have your personal support group too!
From my personal experience, I realized achieving something is a lot easier if you have a
personal support group to cheer and back you up and a strong commitment statement!
Many are now doing it! Are YOU also
IN(vesting)?
So in the form below, just comment “I’M IN(vesting)!”, tag at least two of your friends, include
your short declaration and start your exciting journey to financial freedom together. (S/he’ll
thank you later on!)
Read more http://www.smartpinoyinvestor.com/beginners
