The 8,000 Peso Rule

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One of my stock investor friend, Eugene, once suggested this rule in our exchanges in a stock investment forum. 

To put it in simple terms for every trade you place the value of that order should not be lower than 8,000 pesos to maximize the use of your online broker’s commission fee. 
If you remember only 15% actually profit in the stock market in the long run that is why you have to maximize whatever cost you incur in your trades if not to profit at least to breakeven.
Online stock brokers have a commission rate of 1/2 of 1% or a minimum of 20.00 pesos which ever is higher. The commission rate is actually equal to 20.00 pesos as well thus by placing an order at least amounting to 8,000.00 pesos you are able to maximize that cost you incur every trade.
That is why as a rule I always place a buy or sell order not below 8,000.00 pesos.


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Financial Freedom Advocate About the blogger

Louis Delos Angeles is a Certified Public Accountant, blogger behind Investing in Philippines, and author of Investing in Stocks: Preparing for the future small amount at a time. Check him out in Google+ Learn more about Louis and his financial freedom advocacy here.

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8 comments for “The 8,000 Peso Rule

  1. March 13, 2012 at 6:21 pm

    Kuya Louis, meron ka po bang summary ng mga fees charged by online stock brokerage firms? 🙂 Thanks! \m/

  2. March 13, 2012 at 9:27 pm

    Sis Lyn-Lyn iche-check ko yan 🙂

  3. Anonymous
    March 17, 2012 at 5:24 am

    why not invest in low cost index fund instead? it will save you a lot of stress and time.

  4. March 19, 2012 at 1:39 pm

    Hi there sorry to reply late. I am not quite sure if there is an Philippine index fund. Most of the funds in the Philippines are mutual fund and bank issued funds. It is highly recommended that you start with a mutual fund. The stock market they say is a roller coaster ride but once you learn the right way you will reap profits in the end. As for me I am in that process and thus came out with this blog to share whatever bits and pieces I learned.

    As they say the best way to enjoy anything is by sharing it

  5. April 2, 2012 at 9:15 am

    Was able to catch one fund in the list of mutual funds in the Philippines as an index fund. Its Philippine Stock Index Fund which is the result of the financial restructuring of Filipino Fund Inc., hope this helps

  6. January 3, 2018 at 10:39 am

    With the implementation of tax reform law in the Philippines in 2018 where tax is changed from 1/2 of 1% to 6/10 of 1%, will 8,000 pesos still be the ideal amount of money to be traded?

    • January 3, 2018 at 11:24 am

      Hi Miller,

      There should be a new threshold since the base where the 8k is computed need to go up. We will definitely have to check as well if stockbrokers will revise their fees. Such will greatly affect the suggested based amount to invest to maximize the charges that one has to incur when buying/selling stocks.

      Thanks Miller.

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