I've been into stock market since 2006. It is a good way to grow money and help Philippine businesses as well. Though I am not a consistent gainer, my gains are still way higher than my losses. Below are selected stock transactions from August to December 2009. In spite of the losses, you'll see that returns are still higher compared with savings deposit.
In the next few days, I'll be posting information related to investing in the stock market. See information below
Why Invest?
There are many reasons why you should invest your money. Investments are made to generate future purchasing power that will keep ahead of inflation and provide investors a sense of financial security. You can achieve your financial goals for your different financial needs over different time horizons like buying a house, paying for your child's college education, and setting aside for your own retirement.
The first and best way to start investing is by saving money. Always pay yourself first. Every time you receive your salary or profits from your business, set aside or keep some of that money, and invest it or put it in a bank. Rather than wait for the end of the month to see what is left for savings, at the beginning of the month, write a check to your investment account.
You should start a monthly savings plan so you can have your income work hard for you. Over time, small amount of savings become substantial.
Investing is the ability to make your savings grow or appreciate to achieve your long term financial goals. Investing is the most effective way to build your personal wealth and secure your financial future
Why invest in the Stock Market?
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.
What are Stocks?
Stocks are shares of ownership in a corporation. When you buy stocks of a publicly listed company, you become a stockholder or shareholder of a company. In other words, you become part-owner of that company. As an owner, you participate in that company's growth and future profits. Conversely, you may also lose if the company suffers a loss or performs below market expectations.
What is the Stock Market?
A stock market is a place where stocks are bought and sold. The Philippine stock market is the place where people can invest in "publicly listed" companies in the Philippine Stock Exchange (PSE).
How do I make my money grow in the Stock Market?
Through capital appreciation or when there is an increase in the market price of your stock and through dividends issued by the company you invested in"
There are 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. For example, if you buy a share of stock at Php100.00 and it rises to Php110.00, your capital appreciation or gain is Php10.00. Keep in mind, though, that you only realize your gain of Php10.00, if you sell at Php110.00. If you choose to hold it and it further increases to Php150.00, your capital gain would be Php50.00. However, if your stock decreases to Php100.00 then sell it at that price, your capital gain is zero.
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 dividend is the earnings for 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 Php2,500.00 gross of tax (Php0.25 x 10,000) in cash.
Stock dividends are additional shares given to shareholders at no cost. If the company declares a 25 percent stock divident, a stockholder with 10,000 shares will be entitled to additional 2,500 shares of stock. These shares can also be sold anytime after the shares have been issued.
From Philippine Stock Exchange Primer 2010
