Three questions you have been dying to ask about stock investment

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There is one rule that I and some of my stock investor friends have told new stock investors that from time to time visit our stock investing forum in Don’t be ashamed to ask.

wanted to know something but dont know where to ask

To date there are about 95 million Filipinos of which only an estimated 1% invest in the stock market. A lot of things prevent our kababayans from participating to our beloved Philippines’s growth. Some of the myths that prevent our kababayans from participating the local stock market are that stock investing is only for the filthy rich, it requires billions of pesos, it’s gambling, and more. (To read these myths and learn how to start investing just like I did check out my e-book by clicking here).

Now what are these three questions that you might be dying to ask to get you started investing in the stock market,

Q1. How would I invest in the stock market, particularly the Philippine Stock Exchange.

Most people are shy to ask this question because it sounds like embarrassing. Searching this question through a search engine might answer your question but again having someone explain to you  face to face or even just through a simple email has a different impact.

To answer this question I must first explain how does the stock market operate. The stock market is a place were buyers and sellers of stock meet to transact their business. in order to buy or sell participants of the stock market have to place their buy/bid and sell/ask to the stock markets system which is called NTS. From there the system matches these bid and ask and whichever matches becomes a trade.

If you have been to the early wet market scenario(I remembered mine when my dad brought me to to the bangus dealer for us to sell our bangus harvest) the dealer already has some customers from daily big buyers for export to the street peddlers who need fresh supplies of bangus. the dealer makes money taking a share in the sales price thus he has to negotiate the price who wanted to buy bangus. So the pricing of our bangus would not be fixed. SOme would buy a huge bulk thus we offer a lower price as compared to those who would just buy a kilo or two.

The same thing happens in the stock market thus in order for you to buy or sell in the stock market you got to have your dealer who is called broker in the stock exchange.The internet age has brought new ways to do trading and thus we have online brokers. These online brokers allow us to place trades wherever we are and whenever we can. You can check the list of online stock brokers participating in the Philippine Stock Exchange here.

Q2. I am just earning enough but have a small savings, can I invest this in the stock market?

With online stock brokers you only need an initial 5,000.00 pesos to open an account. You can use this same amount for your stock buys as well. No as time passes you can add your free cash savings to increase your buying capability.

Again as a rule we encourage only free cash to invest in the stock market. If you have immediate need for your savings then don’t invest it in the stock yet. To simple put it once you invest your money in the stock  it will take time to profit and thus it will be hard to take it our when emergency or an urgent need comes and your only available cash you have is your stock investment.

Make it a practice to budget and set aside a portion of your salary for both emergencies and stock investment(or any other saving/investment that would give  a good return in the future).

Q3. When is the best time to invest in the stock market?

Most people ask this because of timing. The best time to buy stocks is when their prices are low because you are able to buy more stocks with your small savings.

But to say it correct the best time to open an account and start planning and deciding which to buy is NOW.The stock market will always go up and down, no one really knows the time thus starting now will give you advantage over those who decides to start when able. One thing is you will be forced to learn about stocks investing and the companies you wanted to invest into. You got to always do your research or due diligence before buying a stock.

Opening an account now and starting research also exposes you to knowledge that would help you when you are ready to actually buy the stock.

So right now is the best time to open and enter the stock market.

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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