103 A Complete Idiot's Guide to the Stock Market


PSE
Investing in the Philippine Stock Market has become more prevalent nowadays, thanks to those few and exceptional individuals who keep on spreading financial literacy all throughout the country.

The stock market is now being actively thrown into discussions of many Filipinos when it comes to managing their own finances.


I was once a complete idiot on the stock market myself. Even when I was already in college, I'd take pride of my self-formulated knowledge regarding the stock market: it's one big market that sells all kinds of stuffs, from A to Z! Almost nothing is wrong with that, really. Except that I'm thinking of it as the market I know - literally! 

So there I was, a graduating student of a Bachelor degree, taught to solve complex computer algorithms...ignorant of the terror lies about the real world I'd soon be facing. I was dumb. I was an idiot. Why shouldn't I be?

No one ever taught me.

Today, I now invest in the Stock Market. I hope you will too! Why? Because investing in paper assets such as the stock market is one of the many vehicles that we can ride to our own path to success and wealth. Don't miss it! And may you soon enjoy the ride...


So, what's the Stock Market?
Stock MarketI'm sure you've heard it -- a lot. Many times, the stock market is in the news, in the business section of a magazine or newspaper, and even in the Internet. But like most Filipinos, we don't burn much calories trying to figure out what the heck is this thing called Stock Market. And mostly, we are taught to believe that the Stock Market is only for the damn few rich.

Simply put, the stock market is a place where portions of publicly listed companies are being traded. In the Philippines, the physical location of the trading actually takes place at Ayala Tower 1 in Ayala Avenue, Makati City. 

Let me tell you what and how the stock market works in a simple narrative:
  

Jeff wanted to open a softdrinks delivery business. For this venture, he would need 10,000 pesos as initial capital. But he only has 9,000 on his savings account. So he asks his friend Kent if he could lend him his 1,000 and in return, he will own 10% of Jeff's business. After a month, the business did well and it earned 1,000 pesos in its opening month!

Since Kent owns 10% of the business, Jeff gave him 100 pesos (which is 10% of what the store earned). This is called dividend.

But that 's not all.

After a year, the business is thriving well. From softdrinks, it now sells beers and all kinds of popular sodas in the market. From 10,000 worth of initial capital, the business is now worth 20,000 pesos.

And so Jeff's other friends, Mark and Alex were now interested in joining the business as well and they learned that Kent actually owns 10% of it. So they asked Kent if one of them can buy his shares.
If Kent decided to sell it, he would now earn (10% of 20,000) 2,000 pesos! This is called Capital Appreciation based on market value. But then, Kent has a problem. There were 2 of his friends both asking to have his 10% share of the business.
So Kent simply decided to have them bid: whoever among Mark and Alex is willing to pay more for the 10% share that is now worth 2,000 pesos.
Of course, Kent decided to sell the shares to Mark, who countered Alex's offer to pay 2,500 with 3,000. This is called Capital Appreciation based on perceived value (which is based on the demand from his 2 friends).
This is how simple the stock market works.

Now that you have been acquainted with the Stock Market in its simplest sense, the following nuggets will make more sense to you.

Do I need to go (personally) to Makati to buy or sell stocks?
No. You will do everything online - with the help from an online broker which I will tell you more about later.

What do you mean by portions of listed companies?
A company who wish to be listed or included in the Stock Market should have at least 12% of its total value available to the public. Meaning, if a company's total worth is 1 Million pesos, 120,000 should be owned by the public. This portion is what you call stock or share.


And who is this public?
This public is actually us - you and I included - normal people that do not even know who runs that company. So yes, even you can have a hand on these huge companies, because you are a member of the public.


But why would companies go public?

Let's go back to Jeff's softdrinks business above. If he wanted to open up another branch but don't have enough money, what's the best thing for him to do?

He has 2 options: 

  1. borrow interest-bearing money from the bank or 
  2. borrow money from his friends.
The same is true for the listed companies. Instead of borrowing money from the bank, they go public. So people would buy shares from them in return of their cash. Hence, the company will be able to collect funds from the public, which they can use to improve their business.
 
What do people get when they buy shares?
When you buy a share of a company, that basically means you own a small portion of that company. If the company grows, so as the value of your shares. And this is where you earn money in the long term.

How do I make money from buying stocks?
The logic is simple: Buy Low, Sell High. It's like buying an item with a lower price, and then selling it to others with a value higher that what you initially paid for. The good thing about investing in the stock market is that the company is more valued over time, unlike cellphones and cars, which decreases value over time. Stocks are like gold, the longer you hold it, the better its value is appreciated. This is called Capital Appreciation. Of course, the bigger the company you choose the better for you.

When you buy a share of a company, the price or value will change. Therefore, buying 100 shares for 4 pesos each will have a value of 6, 7, 8 or who knows in the long run? Eventually, you will sell these shares when you've profited already. That is how you will earn.

Is there a guarantee that I will earn?

NO. There is no definite guarantee. There would be times that you might buy a price of 4, only to see its price drop in a matter of minutes, hours or days! But that's OK. Because it will eventually go up...even higher!

Your investment in the stock market can be compared to a hiker:
 

  

He starts in the foot of the mountain, just like your investment. Eventually, he will start to climb the mountain and expects to struggle at times on his way up, including slippery rocks which may even cause him to fall!  
But that's OK, since his goal is to reach the top of the mountain! So he'll just rest, gather some more strength and start climbing again.
During those falls, hikers have ropes that would save their lives in case such accidents happen. These ropes can be compared to the foundation of a company. Bigger companies have stronger ropes compared to weaker ropes the little ones have.  
The difference of the hiker from the company you invested in is that, once the hiker reached the top of the mountain, his journey comes to halt. Not with the Stock Market. Because once it reached its peak, it will try to reach for new heights.
Sky is the limit!

Is this LEGAL? Is this not some sort of a SCAM?
Of course it is legal. The stock market is being regulated by the Philippine Stocks Exchange (PSE). They set the rules and regulations on listing, trading, suspending and all activities involved in the process.

How regularly do they trade?
The stock market trades from 9:30 AM to 3:30 PM, Mondays thru Fridays, except during Holidays.
 
Below is the complete daily schedule of the market:

9:00-9:29 AM
Market Pre - Open

9:30 AM
Opening

9:30-11:59 AM
Continuous Trading

12:00-1:29 PM
Market Recess

1:30 PM
Continuous Trading

3:17 PM
Market Pre - Close

3:20 PM
Closing

3:20 PM
Run-off or Trading At Last

3:30 PM
Market Close


But they say that the stock market is very risky!
Yes, that is very true. But as many mentors would say, it is trading that is dangerous and not investing. Trading means you buy and sell within the day or few days! Investing, on the other hand, is buying stocks and holding it for a longer period. Trading means you speculate on a particular stock if it will go up or down, and speculating, without due knowledge, can be simply coined as gambling!

Would Anyone Know If a Stock Will Go Up or Down?
No. There is no imaginable way for anyone - not even geeks and billionaires combined (Tony Starks, anyone?) -- to determine if a stock will go Up or Down...nor will there ever be!

This is mainly because of the fact that there are thousands of people that are holding the stocks of a particular company! Say, how do you predict what's on the mind of these people? Would you know when exactly will they sell or buy another share? No! That's why it's impossible for anyone, including the company itself, to know the exact numbers of what will be the lowest and highest price/share for the day or in the future.

What most investors do, however, is to predict the market mood or what is commonly known as timing the market. Timing the market is simply predicting when is the best time to buy and sell your stocks. However, just like any other predictions, this too can either be a make or break case. These predictions are just but estimates based on certain factors such as past performances (which is NOT a guarantee of any future performance), volume trades, rumors (Yeah, it's like showbiz at times.) and news.


Should I care about all these rumors and news?
Yes. Why? Since there is no way for us to predict the market, news (including rumors) will play a big role in the decisions of all investors.

All news and rumors about the company you invested will affect the price movement of its stocks. Good news such as acquisition, dividend declaration, earnings disclosures will have a positive impact on the decisions of investors because this will trigger their confidence on that company. Therefore, more investors will be persuaded to buy shares from this company. News such as a company being sued or facing legal battles or damage to one of its properties will have a negative impact on investors because they might lose confidence to the company. Eventually, if a company loses the trust of its stock holders, the shares will be sold, which will cause the price of the company's stocks to go down.

Let's make it a little graphic for you:




One day, after reading this great article (Says who? Me!), Jay decided to invest in the stock market.
He bought 100 shares of ABC Mining Corp. at 9/share. Excluding online broker's fee and taxes (more on this later), he paid a total of 900. After 3 months, the price/share for ABC Mining Corp.'s stocks were doing good. It now trades at 14/share. Hence, the total value of Jay's shares is now worth (14*100) 1,400. So Jay will already earn (1400-900) 500 if he decides to sell his shares.
But one day, news broke: “1 mining facility of ABC Mining Corp. in Benguet was closed due to environmental issues...”
This news will surely have an immediate impact on many investors, including Jay.
From 14/share, the price dove down to 13.20/share on the first day when the news went public.
Should Jay sell his stocks?
Should he hold on?
We wouldn't know.
But since Jay has already earned on his investment, it is expected of him to sell his shares, rather than stick to it because of his fear that it might go as low as to 9/share again, or worse - lower than 9! If that happens, Jay would have a negative portfolio. And this too, would be a great time for other investors to buy shares from ABC Mining Corp., since they will be able to buy shares with relatively lower price! So if Jay sells, others will buy.
Someone sells, someone buys.

This is the reason why the market goes Up...and Down. So as an investor, it's your responsibility to also check any news, good or bad, about the company you invested your money in. It's all there - in the TV, internet and business section of a local newspaper. Please do yourself and your country a favor: Do not waste too much time on that Entertainment section!

Are you saying that I should withdraw all my hard-earned money from the bank and buy stocks?
No! You should always have an emergency fund. The purpose of this is in case of unwanted expenses such as emergency, you will not be forced to withdraw your money from the Stock Market. This is critical because what if by the time you needed your money, the market is down? If you do that, you will loss a substantial amount and might give you a stomach ache!

What would I need if I were to start investing in the market?
There are at least 2 important things you need to get you started: a broker and of course, money.

A broker is either a person or an institution that will represent both sides: you and the company you wish to buy shares from.

Personally, I do not know a broker (person) and I am in no position to neither encourage nor discourage you to have one. But I'm pretty sure that requiring one means you have a lot of money to use for buying stocks. In that case, I suppose you don't have that much since you've gotten this far to my article. Ha-ha! So, what I'll introduce to you are the institutional ones or what we simply call ONLINE BROKERS.

Currently, there are a lot of certified online brokers in the Philippines, but I'll limit the list to 3 for you.

Both First Metro and BPI Trade are managed by the bank they represent, while COL Financial is a plain online broker. The good thing about First Metro and BPI Trade is their convenience, especially if you already have an existing account with them. As for BPI Trade, there is a minimum daily balance requirement of 500 pesos, which earns interest just like a normal savings does. 

For COL Financial, there is none. But the minimum initial investment for COL Financial is 5,000 pesos. As for BPI Trade, you can start investing for as low as 1,500 pesos provided that you maintain 500 as your ADB (Average Daily Balance). But what's great about COL Financial is their specialized service since they focus more on the trading. They even have a feature where they actually suggest good stocks to pick for their customers.

But all these online brokers have broker's fee. Meaning, you will pay them for every BUY and SELL transactions you do. The minimum fee (both for buying and selling) is 20 pesos. There is also tax whenever you sell a stock. Below is the breakdown of BUYING and SELLING fee, regardless of the broker you choose.

For BUY Transaction
Commission: 0.25% on the gross value (minimum Php20.00)
■ Value Added Tax: 12% is levied on the commission charge
■ PSE Fee: Php0.00012 for every Php1.00 gross value traded
■ SCCP Fee: Php0.00011 for every Php1.00 gross value traded

For SELL Transaction
■ Commission: 0.25% on the gross value (minimum Php20.00)
■ Value Added Tax: 12% is levied on the commission charge
■ PSE Fee: Php0.00012 for every Php1.00 gross value traded
■ SCCP Fee: Php0.00011 for every Php1.00 gross value traded
■ Sales Tax: 0.50% on the gross value

How do I know if it's a good company?
PSE (Philippine Stocks Exchange) has what they call an index.
This index (PSEi) is a composition of 30 Blue Chips -- the country's biggest companies based on net assets that are actively traded (shares are bought and sold constantly in the market). 
The PSEi is usually considered a barometer of the Philippine economy where a rising PSEi typically denotes optimism in the country’s economic performance while a declining PSEi may suggest possible economic contraction.

OK, so what makes these companies blue chips? 
For companies to qualify in the PSEi, they must meet the following criteria:

Free Float — at least 12% of the total net worth of the company is held by public;
 
Liquidity – must belong to the top 25% by median daily value turnover per month for at least nine out of 12 months; and
 
Full Market Capitalization — one of the highest-ranked market capitalization, measured by the company’s stock price multiplied by the number of shares being publicly traded

What are these 30 companies, by the way?
As of March 2014, the PSE index is composed of the following 30 companies:
    1. Ayala Corp. (AC) 
    2. Aboitiz Equity Ventures (AEV) 
    3. Alliance Global Group Inc. (AGI) 
    4. Ayala Land Inc. (ALI) 
    5. Aboitiz Power Corp. (AP) 
    6. BDO Unibank (BDO) 
    7. Bank of the Philippine Islands (BPI) 
    8. Bloomberry Resorts Corp. (BLOOM) 
    9. DMCI Holdings (DMC) 
    10. Energy Development Corp. (EDC) 
    11. First Gen Corp. (FGEN) 
    12. GT Capital Holdings (GTCAP) 
    13. Globe Telecom (GLO) 
    14. International Container Terminal Services Inc. (ICT) 
    15. Jollibee Foods Corp. (JFC) 
    16. JG Summit Holdings (JGS) 
    17. LT Group Inc. (LTG) 
    18. Manila Electric Co. (MER) 
    19. Metropolitan Bank & Trust Co. (MBT) 
    20. Megaworld Corp. (MEG) 
    21. Metro Pacific Investments Corp. (MPI) 
    22. Petron Corp. (PCOR) 
    23. Philex Mining Corp. (PX) 
    24. Robinsons Land Corp. (RLC) 
    25. Semirara Mining Corp. (SCC) 
    26. SM Investments Corp. (SM) 
    27. San Miguel Corp. (SMC) 
    28. SM Prime Holdings (SMPH) 
    29. Philippine Long Distance Telephone Co. (TEL) 
    30. Universal Robina Corp. (URC)
Has it always been like this? I mean, the list doesn't change?
No. The PSE conducts review of the index every six months based on the criteria I mentioned above. Hence, there will be an updated list on September 2014, but not necessarily a change in the listings since it all depends on the performance of the companies if they maintain their edge among other companies outside the index.

What happens to a company if it's included in the index?
If a company outside of the index is included in the list, expect its price per share to go up since it will have a significant impact in the decision of the investors.

What about the company going out of the list?
Likewise, the price per share would go down since some investors might lose their confidence on the company.

So Ayala Corporation is the biggest in the country?
No, not necessarily. The list, if not obvious, in just in alphabetical order.

And how many shares can I buy from one company?
There is a pre-defined no. of shares you can buy for each company, depending on their current trading price per share. This is called board lot. A board lot determines the exact no. of shares required to either buy or sell. Meaning, you can buy at least 5 shares from Company A, whereas you need to buy at least 100 shares from Company B. You may use the table below to quickly understand.
 

Board Lot


The size of the lot will depend on the price of the stock. Mathematically, the lot size will be the multiplier of the price. Thus, if a company's trading price is 30/share; its lot size will be 100, based on the table above, which will cost 3,000, since 30x100=3,000. The tick size simply tells you how the price changes from time to time.

Again, each company will have a different lot size since they are being bought and sold at different price per share.

I want to know everything first about a company that I want to buy, what should I do?

The price per share, board lot, price movement history for the last 30 days, the company's profile, board of directors and every basic detail you wish to know are publicly available at the PSE website.

A page similar below will be loaded in the PSE website, pls. take time to study the image below.


PSE Website
There you go! Now you'll learn so many things just by looking at the PSE Website, right? Let me further explain each of the parts I labeled. The Search box at the upper-right corner of the site is where you will (duh?) type the symbol of the company you wish to view. Now how would you know the Stock Symbol for each company? All listed companies and their corresponding stock symbol is readily available from the PSE Website. But remember our online brokers? They too have an updated list of all listed companies and their corresponding symbols. But for your convenience, you can further check the following links for your own preference (pls. note that some may not be updated though)It is important to note that a stock symbol does not always need to be a 3-letter acronym like JFC, MBT or BPI; it can sometimes be as long as SMPH or BLOOM. Once you know the stock symbol of the company you're interested at, you just type that in the search box and click the name that appears. It will then load the page particular for the company you chose.

First, you'll notice the Last Trade Price; this is the current price/share of the company you're looking at. You should be aware that this price changes every single minute or (even seconds!) depending on how many trades are happening as of the moment. You need to refresh this page every time you want to see the latest price/share since it does not refresh automatically.

You can see the board lot or the lot size I was referring above in the Board Lot section in the right side of the page. From here, you can now compute for the estimate of how much will it cost you to buy shares for a company, that is, by multiplying the Last Trade Price to the no. of Board Lot. The value you will get will not be the same in the actual cost of buying though, because there would be additional fees such as your broker's fee and tax (see Buy and Sell computation above).

The 52 week High (52WH) and 52 week Low (52WL). These 2 are important when you're deciding to buy.  52WH tells you the highest price/share ever reached by the company for the current year whereas the 52WL is, of course, the cheapest or lowest value of the price/share within the year. It would be a good practice NOT to buy stocks if the current price/share is near the 52WH so that you're more confident that there is much room to grow.

The Free Float Level or Public Float shows you how much (in percentage) of the company's market capitalization is available to the public. The Market Capitalization, displayed just below the Free Float Level, tells you how much capital the company currently has. Market capital can be computed by simply multiplying the Previous Close value and the Outstanding Shares value.

The Profile tab is where you'll see the basic details about the company - the type of business it is taking, affiliates (if any), brief history, past and present achievements, future undertakings and plans, company website, contact numbers, board of directors, President of the company and more. Be sure to take a look on this tab if you're entrusting your hard-earned money on a certain company.

The performance of the company for the last 30 days in the stock market is best reflected on its previous trades.  So you might want to check out the Historical Data tab, where you can see the price/share for the last 30 days. Here, you will see the Highest and Lowest price/share for month, including the Highs and Lows for each trading day.

In Corporate Disclosures tab, you can view and download (in PDF format) all the company news, clarifications and disclosures about the business such as dividend declaration, merging or acquisition news, additional listings, etc.
 




- o0o -  


What's next for you?
Now that you have been guided to a brief walk through on the Stock Market, I hope that this writing tickled your curiosity at the very least.

If you want to start trading investing in the Stock Market, and have the money to do so, I encourage you to join us - wise people who make up less than 10% of the total Filipino population who invest in the market!

Just remember that it does not require too much reading for you to invest in the market. Once you understand the basics, start investing! After all, it's not how much you know, but how much you actually apply. What's the use of knowing the ABCs of the Stock Market when you don't invest? No, I'm not a geek nor a millionaire (at least not yet), and I only know the ABCs, not the entire A-Z of the Stock Market, but I was able to write this article -- because I invest myself. I apply whatever I've learned. I wish you do the same.

To invest or not to invest is now a decision that awaits your approval. And if your next question is When is the best time to invest in the Stock Market?, the answer is plain and simple -- Now!



PisoandBeyond


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103 comments :

  1. Thank you for explaining this as simple as possible. keep it up!

    ReplyDelete
  2. If I don't sell my stocks, will i earn through dividends?

    ReplyDelete
    Replies
    1. Hi, thanks for dropping by!

      Regarding your question, YES. You'll earn thru dividends. But do take note that NOT ALL listed companies give or pay dividends (that's why some investors prefer dividend-paying companies, because that's a sign of steady growth). But technically, you have to weigh-in if you want the dividends or the sell when your stocks are at higher price. Normally, when the company is about to pay the dividends (div-date), the price of your stock shares will surge (this is probably the best time to sell) but then you won't be paid any dividends. But if you hold on to your stocks, you will be paid the dividends. The cons? The stock price will dramatically reduce (there's a computation for that).

      Delete
  3. i already invested in equity mutual funds. hindi ba redundant kung maginvest pa ako sa stocks?

    ReplyDelete
    Replies
    1. Hi, thanks for your question. I don't know how would I address you though :-P

      It depends on your risk appetite. But since you mentioned na you're into EQUITY, I'll assume mataas ang risk appetite mo. Hindi naman po sya redundant in your case. Mutual Funds are managed funds where the only control you have is to choose between BONDS, BALANCED, and EQUITY. Pero wala ka control kung saang company i-invest ang pera mo (although if you're new to investing, it's best to let professional fund managers do this for you). In stocks, you get to choose which companies you would want to buy shares. You have total control. That is, if you have time to study the market. Cheers!

      Delete
  4. Ive been interested in investing in stocks but I have no idea how. This article is very helpful. I have a bpi family savings bank account. So shoul I just fo to my bank and ask about bpi trade? Thanks!

    ReplyDelete
    Replies
    1. Hi EJ, good to know about that. Yes, you can directly go to any BPI branch or you can fill-out the application form found on their website (https://www.bpitrade.com/) and click "Open an account" link found at the bottom of the page. Then print the form and submit it including other requirements (e.g. valid ID) to a BPI branch of your choice. After 3days to 1 week, you will receive a confirmation that your account is active for trading (but you need to deposit/maintain at least 500 pesos). Good luck and thanks for supporting this blog! ^_^

      Delete
  5. I'm sure a "common tao" will understand this.. salamat sa pagbahagi ng kaalaman!

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  6. thanks for the info...

    ReplyDelete
  7. Thank you very much for this... I'm really interested in the Stock Market. After reading your article, I'm now deciding to join.
    I'm 20 and I have a small capital to invest with.
    I can consider brokers, but would you mind giving me an idea on how to get a share without brokers?

    PS: Can a person under 18 join the Stock Market?

    Thanks,
    TKL

    ReplyDelete
    Replies
    1. Hi TKL,

      Thanks for enjoying the article and for your comment ^_^

      It would be "somehow" expensive for an investor to look for a broker, not unless you plan to invest a lot (and by that I mean, millions!) But if you plan to invest with (like what you said) small capital, an online broker will already do. And YES you can invest even when you're under 18 PROVIDED you open a joint account with an elder (e.g. your parents).

      I hope I answered all your questions. Cheers!

      Delete
    2. AnonymousMay 02, 2014

      Thank you very much... cheers~

      Delete
  8. Thank you for the information! :)

    ReplyDelete
  9. Thank You! The best ka ser.
    :))))

    ReplyDelete
  10. Hi just want to ask. If you sell your portion in the company (your share) does it mean you are no longer shareholder of the company? Would it bring you to buy another stock in the stock market or is it okay to buy again that previous stock?

    ReplyDelete
    Replies
    1. hi sir/mam, yes once u sell ur shares it mean that u no longer own a part of it unless u don't sell them all example u have 100 shares of SM and u sell 90 shares, then u still own 10shares. and yes again, u can buy shares of SM again even if u sell some already. you can buy and sell all you want.

      Source: i invest in the stock market too!!

      Delete
    2. Hi, I agree with jin's answer. thanks jin! Just an emphasis, the proceeds of the shares you sold can be used to buy shares of another company or buy the same shares of that company you previously sold. Let's say you already gained 1,000 Pesos because your shares in SM went up and you decided to sell. Then after a week, it's price per share went low, then you can decide again to buy SM shares since it's low (this is what we want when buying, of course) or find another stock(s) to buy.

      Delete
  11. Hello! This is an excellent article. Kudos.
    I'm a beginner in stock investing. I'm planning my investment activities/goals for the next 20 months and I was wondering if an 8% quarterly growth in stock prices is realistic. I could use some info on last year's trends or a list of companies that have outgrown this figure, on a quarterly basis. Although, I am well aware that there are plenty of factors to consider such as economic policy changes or decline in the economies of trade partner countries, I will assume no changes in these and will base my predicted earnings solely on last years'/months' market performance.

    And Is there such a thing as mean stock growth for the past 3 years? What are your thoughts on compounding my investments quarterly? What time interval would you recommend? Thanks!

    ReplyDelete
    Replies
    1. Hi Kent, thanks for dropping by!

      Well, 8% quarterly growth is for real, so as -8% ^_^

      Remember that past performance does NOT guarantee future results when it comes to the stock market.

      Compounding your investments quarterly is OK provided you actually sell your stocks at a higher price. However, as you may have already know, you simply can't predict the market. What if your stocks were down by the time your target quarter of selling comes? Do you hold or do you sell at a loss? That's why there would be no such thing as "recommended" time interval for buying and selling. Instead, we go to the basic: buy low, sell high. And if that selling will take you weeks or months or even a year, a profit will always be a profit.

      Cheers! ^_^

      Delete
    2. I think it's better to hold on to your stocks for a longer period before selling rather than selling on a quarterly basis. Based from my experience, it normally takes about 6 months on average for a stock to gain momentum and significantly increase its value. Then after you sell, make sure you buy another stocks that are cheaper by that time. Just my two cents here.

      Regards,
      nelson of PMT Forum

      Delete
  12. Great share it peak my curiosity, Do you have a guide for dummies like a step by step. I'm planning to invest if a have a fair amount of money in the future


    Thank you for sharing this

    ReplyDelete
  13. AnonymousJune 18, 2014

    Thank you for sharing your simple yet concise explanation on investing in the stock market. Hope this article reaches to all Filipinos and inveigle them to join and invest and make their money grow for retirement :)

    Keep up the good work and more power to your blog :)

    ReplyDelete
    Replies
    1. Thank you for your humbling comment. ^_^

      Delete
  14. That was a comprehensive take on the stock market. The stories help turn complexity into simplicity!

    You posed a question on your article: "Would anyone know whether a stock will go up or down?" That is where technical analysis comes in and it is the topic of my blog www.tradingphoenix.net which aims to supplement and inform newbies with technical analysis of Philippine stocks on a regular basis. Technical analysis will help one make better decisions in terms of buying and selling an instrument. One will not get everything right all the time, but one will increase the probability of making good decisions by incorporating technical analysis into one's investments.

    ReplyDelete
    Replies
    1. Thanks for your informative comment. Yes, you're right. I plan to write an article regarding technical analysis in the future, I'll link back to your site as a simple token.

      I appreciate your time reading this post. Cheers! ^_^

      Delete
  15. AnonymousJune 26, 2014

    Learn more about investing in the Philippine stock market, visit pseacademy.com.ph

    The PSE Academy is the official market education website of the Philippine Stock Exchange, Inc. (PSE) created in partnership with the PSE Foundation, Inc.

    ReplyDelete
  16. Phoebe AmatosJune 26, 2014

    Hi Jeff,

    Thank you for this article. I would like to know if nag-online broker ka ba or on your own ka lang nag-invest sa stock market?

    Would you also recommend books, pdfs or other articles to help us learn more on stock market especially the PSE website? Thank you so much. I'm 25 and planning to invest now.

    ReplyDelete
    Replies
    1. Hi Phoebe,

      I invest via on-line broker. The best starting book would probably be Bo Sanchez's "My Maid Invests in the Stock Market (And Why You Should, Too)!". (You can download it here FREE ->> http://trulyrichclub.com/)

      But if you've already got the concept (which I assume after reading this article ^_^), then go for "Stock Smarts: Stock Investing Made Easy" by Marvin Germo. The book discusses the stock market in a broader sense while keeping it simple for starters. For more info about the PSE Website, you can check it for yourself at www.pse.com.ph or you can also check www.pseacademy.com.ph.

      Let me give you a tip: it's not about how much you learned or how much you know, it's how much you actually apply. So decide which online broker you prefer then start investing! Just buy small stocks first, just to have yourself experience what it feels to buy a stock of these huge companies. Then once you see that investment turn *green* or *red*, that's it, welcome to the world of stock market! Then try reading more books or articles to further increase your knowledge, or you can subscribe to Truly Rich Club by Bo Sanchez (link provided above). I hope I was able to help you.

      Thank you for your time visiting my blog (Don't forget to subscribe pls!). Cheers! ^_^

      Delete
  17. Thank you sir for this newbie guide! This helps me a lot since I don't have any background with investing / business. But i do have a question regarding the 52week High-Low portion. Let say I'm eager to buy IMI shares as my first technology sector stocks. But currently, IMI is on 5.9php price per share. and it's close to 52-week high (which is 6.8php) compared to it's 52-week low (1.81php). Should i wait for the price to drop at midpoint @4.30php before buying it? I'm worried that if i wait for too long, IMI might increase it's price and might loose the chance of buying it at 5.9 where it's considered cheap in the future? (Considering that IMI price last feb is 2.7php lang. ang bilis ng increase.) Is there any "Newbie Friendly - Buy/Sell Indicator" for newbies like me? Thanks & hope to read more of these!

    ReplyDelete
    Replies
    1. Hi benjie,

      I hope I can give you a "precise" answer as to what best price to buy IMI, but I can't, and I won't. I'll give you my personal take on this instead, but please read with "caveat":

      By the book, it's best if you wait for a price to drop a little lower (the price per share closed at 6.10 as of writing) and this month might be a good one to wait since its Ghost month (August). It's basically a Chinese-inspired event where investors don't invest huge money because of "luck" issues so prices tend to go down. And that's what we exactly wanted, so we can buy shares at a cheaper price.

      However, that is not always the case. As you've mentioned, the price might go higher and break its own 52 Week High record. In the case of IMI, there's no showing that its current price will break soon, so it's really showing a good sign of moving up! If you do the Math, how much will you lose if you were not able to buy now (at 6.10) and the price goes up to, let's say 7.10 per share? Likewise, how much will it cost you if you buy at 6.10 and its price dips at around 5.10 or 4.5? By the way, it's actually not the 52 Week High against its 52 Week Low. It's the "Resistance Level" against the "Support Level". The "Support Level" is the lowest *probable* price that a stock may dive into for a particular period while the "Resistance Level" is the price where the stock is trying to break (to move higher).

      From June 2014 to July 2014 resistance level is at 6.20 and 6.5, support level is at 5.50 and 5.20. **

      But since this company is actually managed by the Ayalas (IMI's chairman is Jaime Augusto Zobel de Ayala) - the guys behind the giants Globe and Ayala Land, I think it's pretty safe to assume that even if the price go down, it'll eventually go up again. The "caveat" part though will be, "when or how long?".

      Having said my personal take on this, kindly check the ff. links below for advance reading.

      CLUE: It's technical analysis that will actually answer your question. Unfortunately, it will take me to write an entire article to teach you that ^_^

      http://www.tradingphoenix.net/
      http://tipsphilippinestockmarket.blogspot.com/
      http://www.traderslogbook.com/
      ** http://www.josefpanerio.com/integrated-micro-electronics-inc-imi/

      Thanks for visiting my blog. Cheers! ^_^

      Delete
  18. hello..i juts start in the stock market..i buy off hours last night. When i checked it again tonight i have negative gross..does this mean i loss my money already? Or it will still grow as long as i don't pull it out or sell my share? Thanks..

    ReplyDelete
    Replies
    1. No, it's just a loss on the paper. You still haven't loss money unless you pull it out. It will eventually grow but it would be a question of when..of course 1 factor would include the company you bought. ^_^

      Delete
  19. thank u. really big help i thought that's the end of my money haha..hopefully i can bounce back..more power.

    ReplyDelete
  20. Not exactly what I was looking for but you somehow saved the day by giving me an idea between Citisec Online or COL Financial vs BPI Trade. Nice

    ReplyDelete
  21. An idiot's guide to investing in stocks indeed!

    ReplyDelete
  22. Thank you for the article, really helped a lot. But I have a question,in the concept of the stock market if you say SELL HIGH BUY LOW, meaning someone must buy/sell at the price you intended, meaning for you to earn, others must loose, or what if no one will buy/sell at the price you wanted? hehe, just clarifying things, since I new here and really wanted to enter the stock market.

    ReplyDelete
    Replies
    1. Hi,

      When you sell your shares at an intended selling price, the person who'd buy those shares does not mean he's losing money just because you're selling HIGHER than the price when you bought the stock.

      This is because each "new" investor who would want to buy a share of a company needs to buy on the current price range of the stock (unless he wait days, months or forever for the current price to go down, so he and you would have the same buying price, if that's what you meant here). So the basic way you'd lose money is when you sell your shares LOWER than what you paid for. ^_^

      Delete
  23. Very informative...Thank you! How long it takes if you want to withdraw your investment ?

    ReplyDelete
    Replies
    1. Hi there,

      That depends on your broker as to how many clearing days it would take before you can withAdraw your money upon selling your shares.

      Thank You

      Delete
  24. This is really very informative for beginners, thank you very much and good luck to you.

    ReplyDelete
  25. Nice one sir!

    ReplyDelete
  26. This is, by far, the best article I've read on the basics of Stock Market trading. Good job, sir!

    ReplyDelete
  27. great article, very informative. thank you.

    ReplyDelete
  28. Thanks for writing this article. Very helpful for absolute beginners.

    ReplyDelete
  29. sir pano po kung board lot ay 100 tapos ang fund ay sapat lng para s 50 board lot at kumisyon ng broaker? posible po ba akong makabili? salamat po

    ReplyDelete
  30. I have no idea what's the interface look like in the broker's site but I'm just curious, when we click on a sell button in the site, will those stocks automatically be sold, or should we wait for someone to buy it online. Is there a status that says 'pending' if no one has bought it yet. What if the price change and the stocks you sell don't have buyer yet?

    ReplyDelete
  31. Buboy..:-)April 23, 2015

    maraming salamat sir Jeff..:-)

    ReplyDelete
  32. AnonymousMay 14, 2015

    Im 18. Do I still need an elder to open an account?

    ReplyDelete
  33. Wow this is the best read so far on how to invest for beginners. I actually understand it! Thanks so much!

    ReplyDelete
  34. AnonymousJuly 25, 2015

    Gusto ko mag open ng mutual fund.how and where? newbie here..

    ReplyDelete
    Replies
    1. Hi,

      You can send me a message via the Contact Me link of this blog. Cheers! ^_^

      Delete
  35. AnonymousJuly 25, 2015

    kudos! a good read. i'm interested in investing in stock market but i really don't have an idea and afraid of taking risk. and this encourage me. now, thinking if to go with col or bpi trade since i already have bpi SA. thanks for sharing your blessings. more power.

    ReplyDelete
    Replies
    1. Your welcome ^_^ Let's help spread financial literacy in the Philippines!

      Delete
  36. AnonymousJuly 26, 2015

    Nice one! Investopedia made specifically for filipinos Kudos!

    ReplyDelete
  37. AnonymousJuly 26, 2015

    Hi sir! Thank you for the informative article. My question is - How would I know if a company pays dividend or not? Might be a very simple question for some but newbie here :) thanks.

    ReplyDelete
    Replies
    1. Hi there,

      You can check out a company's dividend declarations by simply checking its profile. Click the screenshot I used above (Jollibee) and you'll notice *Dividends* section right below the image. Meaning, JFC (Jollibee) is giving dividends. Thank you ^_^

      PS: Link to PSE Website
      http://pse.com.ph/stockMarket/listedCompanyDirectory.html

      Delete
  38. Kudos ! Mr. Jeffrey, and Thanks a lot.. excellent simplicity. More blessing to you..

    ReplyDelete
    Replies
    1. Hi Noli,

      Thank you! Appreciate that ^_^

      Delete
  39. AnonymousJuly 26, 2015

    Hello there. If I invest my money in a stock market is it possible that i will lose my money?

    ReplyDelete
  40. Love this article!
    THANK YOU :-)

    ReplyDelete
  41. Hi pano pag ofw. Pede din ba mag nvest? Pano mag open ng trading account abroad?

    Thanks

    ReplyDelete
    Replies
    1. Hi Sir,

      Yes, definitely! Just check the requirements for OFWs on your online broker of choice (e.g. COL). May additional documents lang na kailangan I-submit. Good luck! :)

      Delete
  42. Hi! I just want to ask if necessary maginvest regularly? I mean marami kasi akong nababasang advices na kung magiinvest ka dapat regularly like monthly or quarterly, how about if Im investing for a year already and then I decided to stop investing and just observe my current investments na lang. Is there any effect? Why are they essence of investing regularly? Thank you so much

    ReplyDelete
    Replies
    1. Hi Czairra!

      To invest regularly is technically NOT necessary, it's your choice. What they mean by "invest regularly" is to actually for a person to develop a conscious habit of saving/investing regularly, since hindi naman overnight mababago ang attitude ng isang tao towards money. One more thing is the so-called "averaging" or more commonly known as "cost-averaging". As you may have already understand, the stocks go UP and DOWN, right? So when you invest regularly, like monthly, you buy STOCKS whether it's UP or DOWN.

      If you invest for a year and decided to stop and just observe, there wouldn't be any effect such as you account being inactive or your broker deducting a certain amount because you no longer invest.

      I hope I answered your concerns. :D

      Delete
  43. Hi Sir Jeffrey,

    Thanks for the valuable information about investing to stock market in the Philippines.
    I knew the concept of stock market in the US since my boyfriend is investing there and he taught me the concept and I'm sure the principles is the same.

    I checked the link in PSI but the information doesn't give me a glance of the real picture easily.
    Like when you go google finance you can see and can easily predict based on the market trend of the company your interested with.

    They gave you trending thru the graph so you can easily analyze the flow.. Check this link I choose Apple as example: https://www.google.com/finance q=apple&ei=kAm2VenrMoi00gTtio2YBA Is there any similar website that we can check in PSI like this?

    Getting into stock market is really a wise move to invest. I have mutual fund in Metrobank and wanted to start in COL Financial my friend already have one and she's doing good. But I'm working in a cruise ship and most of the time it's hard to access online transaction and internet is expensive to check every now and then. And to be successful in stocks you really need to watch the trend and the news (good or bad PR) about the company. What will be the best scenario for me? Aside from Mutual fund?

    Thank you in advance and kudos for the great article!

    Daisy

    ReplyDelete
  44. AnonymousJuly 27, 2015

    Is it possible to pull out right away or do I need to wait until my shares are sold to somebody else?

    ReplyDelete
  45. Thanks for this very helpful article Jeff. Just wanna add this para sa mga kapwa beginners. 15 stock market terminologies a beginner should know.>> http://www.thinkpesos.com/15-stock-market-terminologies-a-beginner-should-know/

    ReplyDelete
  46. Good Day Sir Jeffrey, mandatory po ba talaga na dapat may online broker ka or BPI etc. para mkapag invest sa stocks? kung pwede naman kahit wala, pano po?Salamat.

    ReplyDelete
    Replies
    1. Yes, you need a broker -- either an online broker or a person. Online brokers allow small investments while professional brokers (person) typically handle huge amount of investments.

      Delete
  47. Hi Mr. Reyes is there any way na pwede kita macontact? Would like you to teach me more about investing in stocks. hoping for something here thank you and Godbless

    ReplyDelete
    Replies
    1. Hi Alvin,

      You can send a message via the Contact Me form on this blog. Simply click the "Contact" link at the top of this page or directly email me at phreyesj23@gmail.com or send me a message at www.facebook.com/pisoandbeyond

      Hope to hear from you soon! Cheers! ^_^

      Delete
  48. Hello, I just read your post, I would like to ask how much do you think is the minimum viable amount to start investing? Thanks

    ReplyDelete
    Replies
    1. Hi,

      For COL, the minimum is Php5,000. For BPI, a maintaining balance of 500 pesos is required on top of the amount you wish to invest. For example, you plan to buy 10 shares of JFC (Jollibee Foods Corporation), then you need to put around Php2,500 pesos in your BPI Trading account.

      Cheers!

      Delete
  49. Sir Jeff para po sa baguhan at investment ang Gusto Dapat palang bilhin n'a stock ay yung nagbibigay ng devedend. Kung trading naman a y stock n'a sa tingin ng buyer ay mag aapreciate ang value in short time. Tama po ba? Salamat po.

    ReplyDelete
  50. The best part about trading groups is that the members goals are aligned with the goals of the website. Free stock pick websites align their goals with the insiders of the stocks

    Stocks to buy today

    ReplyDelete
  51. A must read for all those who wants to invest. Good read!

    ReplyDelete
  52. Hi Sir Jeffrey!!!

    There's someone who offered me a life insurance. Actually it's PRU Life. They have these savings and life insurance, and they also invest your money. Will it be a good move if I'll spare some of my savings for this "life insurance w/ investment" thing?

    ReplyDelete
  53. Salamat po sa gumawa ng thread na ito, Napaka informative po. Siyanga pala, may nakita po akong blog na nagpopost ng list of PSE company/stock that breaks beyond their resistance daily. alam naman natin na kapag ang isang stocks that breaks beyond their resistance with a high volume ay isang magandang indication na ang presyo ay tataas, but then again hindi po ito 100%.

    Ito po ang link ng blog.

    http://psefinancial.blogspot.com

    Mayroon din po syang free technical analysis course.

    Just go to the Stock 101 page/tab.

    Happy investing to us!

    ReplyDelete
  54. How can I transfer my late father's shares of stocks with Petron to my name? No last will was made...

    ReplyDelete
  55. AnonymousMay 12, 2016

    Thank you for making your explanation simple to understand..

    ReplyDelete
  56. HI Jeff,
    Some say you invest regularly for a fix amount. For example buy a stocks for 5000. Is this advisable? Thank you/

    ReplyDelete
  57. Thank you for sharing this article..I new in investing and this article helps me know the basic in investing.

    ReplyDelete
  58. Maybe this will help you guys for the Stock Market Newbies.

    "FREE Basic Course for People Who Wants To Invest in the Philippine Stock Market But Can't Get Started."
    |-►►► www.trulyabundantme.com

    This FREE training seminar will help you understand the world of Philippine Stock Market including applicable key-action-steps to help you get started.
    |-►►► www.trulyabundantme.com

    ReplyDelete
  59. AnonymousJune 16, 2016

    Hi! I have 1,000,000 shares of apm before then it change to cosco and my number of shares became 10,000 shares only. what happened there?

    does board lot changes my number of shares????

    thank you

    ReplyDelete
  60. Hi fellas,
    Thank you so much for this wonderful article really!
    If someone want to read more about that Stocks I think this is the right place for you!

    ReplyDelete
  61. how do i know if the company is giving a divedend?

    by the way thank u for youre article its very informative

    ReplyDelete
  62. Hi! I just started investing in stock market through COL Financial. How would I know if a company is a dividend-paying one?

    ReplyDelete
  63. Hi,
    What do you mean by 30 days holding? If I invest P10,000, does it mean that my 10k will hold for 30 days only and I should invest another 10k for the next month?

    ReplyDelete
  64. Thank you for writing this article. It's very helpful to the people like me who wants to know about the basics of stock market.

    ReplyDelete
  65. This is a great article for stock market noobs like me.. Thank you!!!

    ReplyDelete
  66. This works for me just fine for this. It's great.
    http://marketxls.com/technical-indicators/

    ReplyDelete
  67. Great article, time for me to invest!

    ReplyDelete
  68. thanks a lot for this info I really appreciate it esp for a newbie like me

    ReplyDelete



  69. Great blog nice n useful information..

    MCX Trading

    ReplyDelete
  70. Has anyone heard of GTP Capital? I lost a lot of money to them. I had to hire a refund solution professional to get my investment back. Happy to help other traders going through this. christiehartwich56(at)gmail(dot)com

    ReplyDelete
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