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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One Best Way to Invest Money With Good Return on Investment

Investing in Stocks — I attended BusinessCoach’s How to Invest in the Stock Market seminar last April 16, 2011. The speaker, Jay G. Peñaflor, a Philippine Stock Exchange Sr. Market Education Specialist and who is also a Certified Securities Specialist (CSS), revealed to us attendees one of the best ways to invest money. And that is investing in the stock market.

The San Beda College faculty member said that history has proven that investing in stocks over the long-term provides greater returns and protection against inflation than other fixed-income instruments, such as savings accounts, time deposits, government securities, and bonds.

I learned from his lecture that stocks are shares of ownership in a corporation. When I buy stocks of a publicly listed companies like Jollibee Foods or Philippine Long Distance Company (PLDT), I become a stockholder or shareholder of these profitable companies. As an owner, I can participate in the Philippine’s leading food and telecommunication company’s growth and future profits. Though, I may also lose money if these companies suffer losses or perform below market expectations.

Where I can buy stocks? Well, it’s in the Philippine Stock Market. It’s the place where investors can buy and sell stocks of publicly listed companies in the Philippine Stock Exchange (PSE)

Mr. Peñaflor adviced us all 10 participants of that day to invest in the stock market because it’s one of the best ways to invest money. For it’s possible to get 50% return of investments even in 1 day. But as a stock market beginner, I need to be careful and become an intelligent investor. Like in business, it’s better to start small. Maybe P5,000.00 a month and learn the nitty-gritty side of compound investment.

As a new stock investor,  I should study first what’s the best stocks to buy that I can sell when I hit my target return on investments or hold on for a long-term investment to gain long-term dividends.

Additional post to read: How You Can Make Money in the Stock Market >>>

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