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When should I start investing in the Stock Market?
Time is your most precious asset. Those who start investing sooner rather than later have a tremendous advantage.
When it comes to investing in the stock market, time is your most precious asset. The longer your time horizon is, the more time you have to make your money grow.
Compounding is in fact, the single most important reason for you to start investing right now in the stock market. It is the multiplier effect that occurs when earnings or dividends on your investments begin to generate their own earnings.
Every day you are invested is a day that your money is working for you. Investing helps you ensure a financially secure and stable future.
How much of my savings should I invest in the stock market?
With a starting investment of Php5,000 you can already begin investing in the stock market.
To determine how much you can afford to invest, you need to determine your financial net worth (what you own minus what you owe.)
A portion of your 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 your individual lifestyle. A practical rule of thumb is to keep at least 6 to 12 months' worth of living expenses in short-term liquid investments. The remainder of your savings can be invested in medium or long-term instruments such as bonds, stocks or both, depending on the time horizon of your financial goals.
A more conservative approach is to keep at least 75% of your savings in short to medium-term fixed income instruments. The balance of 25% can be set aside for your investment in the stock market.
In fact, for as low as Php5,000, you can already begin investing in the stock market.
How do I start investing in the Stock Market?
Getting started in the stock market is a simple process.
- Chooses your stockbroker or trading participant
- Open a stockbrokerage account
- Place your buy or sell order either online or by making a phone call to your stockbroker
- Monitor and keep track of your investments
