Wednesday, February 8, 2012

Filipinos Should Learn Stock Exchange


Many Filipinos may have already heard the words “stocks exchange”, “stock markets”, or the word “stocks” itself over the television, radio, in the Internet or maybe from other people or on the newspaper. Many people regard these terms as for business-minded people only that they do not ask about what they are all about and don’t get interested with them. Many may have just ignored the chance of having knowledge about this to learn the ABCs of stocks exchange and in the long run, get knowledgeable about it and get a PROFIT or gain.

This was the topic in a seminar that I just attended a week ago and I just wanted to share what I learned and I hope all Filipinos who will read this article will be inspired to engage in STOCKS EXCHANGE.

Many companies are present in the Philippines, big and small, old and new. Examples are Jollibee Foods Corporation (JFC), Ayala Corporation (AC), Aboitiz Equity Ventures (AEV), Ayala Land Incorporated (ALI), Banco de Oro (BDO), Bank of the Philippine Islands (BPI), Metropolitan Bank and Trust (MBT), SM, San Miguel Corporation (SMC), SM Prime Holdings (SMPH), Philippine Long Distance Telephone Company (TEL). These are some of the country’s companies with the most heavily weighted stocks on the Philippine Stocks Exchange Index (PSEi).

So what can Filipinos get about these companies?

As I said, we can earn a profit through INVESTING.

Companies (not only the companies mentioned above) sell stocks. These stocks are valued in the Philippine Stocks Exchange Index (PSEi) if I am not mistaken and they are sold open to all people who are already 18 years old and/or above. By buying stocks, you can say that you own some shares of stocks in the company where you bought your stocks.

WHERE can we buy this STOCKS?

In buying stocks, we will now meet the so-called “broker.” A broker is a person who bridges the buyer of stocks to the company. People cannot enter the company to buy a share of stocks. You can’t enter the company just to buy Php5,000 worth of stocks! You can directly buy to the company if you will buy Php10,000,000 shares of stocks (this is just an assumption, maybe buying 5% of the shares of stocks of the company may allow you to invest direct to the company). Please ask or search on the internet the brokers near in your place where you can register and start to buy stocks. There are also online brokers. Check them in the Internet.

Is BUYING stocks costly for an ordinary person?

Maybe no. Php 4,000 worth of stocks may now be a good start in your investment. Stocks are weighted in the Philippine Stocks Exchange Index. You may buy 5,000 share of stocks! How, if my money is just 4000? Many stocks are weighted low. What I mean is that stocks are weighted not only in thousands but also in centavos and in peso (e.g., Php.98 /stock, Php2.56/stock and the like). So do you find it costly?

How can we earn a PROFIT?

Simple. Example, you bought 5,000 worth of shares of stocks in a company. The company stock’s present value is Php1.05 today. Then after a day, you found out that 1.05 went up to 2.25. So you can see that the amount just doubled! It just means that your 5,000 worth of shares of stocks also got doubled! So you now have 10,000!
So do you have a profit now? You can only recognize that you had a profit if you sell your stocks. You can go to your broker and tell him/her to sell you shares of stocks and in a matter of seconds….BOOM!…your stocks are sold and in at least three days, you may now get your 10,000!

How about LOSS?

It’s also like profit but the opposite. Example, your 1.05 went down to let’s say 0.88. But you don’t have to worry because like your profit, you can only consider that you had a loss when you sell your stocks! You may wait for the time for the stocks to get valued higher again or sell it immediately to avoid much loss.

In addition, brokers give receipts to the seller of stocks so that you present it when acquiring or getting the money sold.

When is the time to buy stocks? I cannot really say when is the perfect time because it’s always your decision and choice when to or not. But for me, I’d prefer buying stocks when they are low rather than buying when they are high. It’s really up to you to decide.

FILIPINOS, it’s already our time to engage stocks exchange. This is a good start for an investment. It is maybe better than putting your money in the bank waiting for it to have 2% gain.

Not more than 1% of the Philippines’ population engage in stock exchange and if only all FILIPINOS would know about this, how I wish that Philippines will be placed beside Singapore in terms of economy and stocks exchange.

I hope you already have the idea! Honestly, I am only 17 and I’m looking forward to engage in this also. And lastly, please, share what you learned.


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This article was also published in Definitely Filipino Blog Network: http://definitelyfilipino.com/blog/2012/02/07/filipinos-should-learn-stocks-exchange/