How Do I Start Investing in the Philippine Stock Market

In the BusinessCoach’s How to Invest in the Stock Market seminar I attended last April 16, 2011, Jay G. Peñaflor, a Philippine Stock Exchange Sr. Market Education Specialist, told us participants that getting started in the stock market is a simple process. He revealed to us the four-step process and i.e:

1. Choosing a stockbroker or trading participant.
2. Opening a stockbrokerage account.
3. Placing order to buy best stocks or sell stocks either online or by making a phone call to stock broker.
4. Monitoring and keeping tract of investments.

How do I Choose a Stockbroker?
Mr. Peñaflor told us that there are over 100 licensed stockbrokers accredited by the PSE. Our choice of stockbroker should depend on the type of service we will require and who will best suit our needs. The types of stockbrokers can be classified into Traditional and Online (via Internet).

Traditional brokers are those who assign a licensed salesman to handle our account and take our orders via a written or through phone call.

While Online brokers are those whose main interface with their customer is through the internet. Clients execute their orders and access market information directly online.

Stockbrokers vary in the range of services they offer and the types of customers they serve such as:
*Handling institutional or corporate accounts versus individual retail customers
*Providing advisory services
*Providing research and analysis
*Providing investor education seminars and market briefings

Mr. Peñaflor said that we can get a complete list of accredited stockbrokers of the Philippine Stock Exchange either by visiting www.pse.com.ph or contacting the PSE at (632) 688-7600.

Learn Who are the Stock Market Participants >>>

 

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Investing in the Stock Market: How Much of my Savings Should I Invest

Jay G. Peñaflor, a Philippine Stock Exchange Sr. Market Education Specialist and who is also a Certified Securities Specialist (CSS), our speaker in the BusinessCoach’s How to Invest in the Stock Market seminar last April 16, 2011, gave us tips on how to determine how much we can afford to invest.

To determine how much we can afford to invest, we need to determine our financial net worth (what we own minus what we owe).

Mr. Peñaflor suggested that a portion of our funds should be in short-term liquid investments, such as bank savings time deposits, and Treasury bills to cover living expenses, and any possible emergencies. The amount to keep will vary according to our individual lifestyle. A practical rule of thumb is to keep at least 6 to 12 month’s worth of living expenses in short-term liquid investments. The remainder of our savings can be invested in medium or long-term instruments such as bonds, stocks or both, depending on the time horizon of our financial goals.

He said that a more conservative approach is to keep at least 75% of our savings in short to medium-term fixed income instruments. The balance of 25% can be set aside for our investment in the stock market.

Mr. Peñaflor explained to us that we can begin investing in the stock market for as low as Php5,000.00.

Additional readings… How do I Start Investing in the Philippine Stock Market >>>

 

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Investing in the Stock Market: When Should We Start Investing Money

Investing in the Stock Market — Jay G. Peñaflor, a Philippine Stock Exchange Sr. Market Education Specialist and who is also a Certified Securities Specialist (CSS), our speaker in the BusinessCoach’s How to Invest in the Stock Market seminar last April 16, 2011, told us that when it comes to investing in the stock market, time is our most precious asset. The longer our time horizon is, the more time we have to make our money grow.

Mr. Peñaflor revealed to us 10 participants that compounding is, in fact, the single most important reason for me to start investing right now in the stock market. It is the multiplier effect that occurs when earnings or dividends in my investments begin to generate their own earnings.

Every day we invested is a day that our money is working for us. Investing helps us ensure a financially secure and stable future.

Mr. Peñaflor says that those who start investing sooner rather than later have a tremendous advantage. If we keep our money in the good quality stocks over the long-term, and then reinvest the dividends earned as we receive them, our investment grows exponentiallly over time.

Additional post to read: How Much of Your Savings Should You Invest in the Stock Market? >>>

 

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Investing in Stocks: How Can You Make Money

Before attending the BusinessCoach’s How to Invest in the Stock Market seminar last April 16, 2011, I asked myself how can I make money in the stock market. And this question was answered by our speaker, Jay G. Peñaflor, a Philippine Stock Exchange Sr. Market Education Specialist and who is also a Certified Securities Specialist (CSS).

Mr. Peñaflor revealed to us 10 participants, how we can make our money grow in the stock market. He said that there are two ways to make our money grow in the stock market. With his detailed explanation, I understand that I can make money through capital appreciation or when there is an increase in the market price of my stocks and through dividends by the company I invested in. Read below Mr. Peñaflor’s explanation…

Two Ways to Make Your Money Grow in the Stock Market:

1. Through an increase in stock price or capital appreciation
Capital appreciation is an increase in the market price of your stock. It is the difference between the amount you paid when buying shares and the current market price of the stock. However, if the company doesn’t perform as expected, the stock’s price may go down below your purchase price.

2. Through dividends declared by the company
Dividends are paid out to shareholders, representing earnings of the company that is not going to be reinvested in their business. There are two types of dividends that can be given by companies: cash and stock dividends.

Cash dividends is the earning of every share of stock declared by the company. So, if the company declares a dividend of 25 centavos per share, a stockholder with 10,000 shares will receive a cash dividend of P2,500.00, gross of tax (Php 0.25 x 10,000) in cash.

Stock dividends are additional shares given to shareholders at no cost. If the company declares a 25 percent stock dividend, a stockholder with 10,000 shares will be entitled to an additional 2,500 shares of stock. These shares can also be sold anytime after the shares have been issued.

Mr. Peñaflor also revealed to us that Philippine Long Distance Company stocks has the highest market price of all Philippine Stock Exchange (PSE) listed companies. With big earnings, PLDT is one of the most profitable companies in the Philippines and no doubt it is also the best dividend paying stocks company in the Philippine Stock Market.

Additional post to read: When Should We Start Investing Money in the Stock Market >>>

 

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