Investing in the philippine stock market
Published 21.05.2021 в Maelle betting trends
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Step 4: Proceed to the platform. After clicking on the confirmation link, input your password. After logging in, click Proceed to Trading Hall. The interface may look both exciting and intimidating for beginners, so feel free to experiment, especially with the menu encircled in orange below. Since this is a demo account, there is no risk. For online brokers, the account opening is generally done online as well. There is no need to visit their office to submit the requirements, although it is still an option.
The requirements may differ slightly depending on your chosen broker, but the common requirements for account opening include: 1 valid government-issued ID with signature 1 secondary ID with signature e. The above requirements are generally for employed Filipino adults. Other investors with a different profile self-employed or unemployed, minors or students, and foreigners may still open accounts subject to additional documentary requirements: Birth certificate for minors Student ID for students 2 IDs for resident foreigners.
For non-resident foreigners, acceptable IDs include passports and other government-issued IDs. Fund Your Account If you open a trading account with your bank, funding your account can be straightforward. Your bank may ask you to fill out additional forms that allow them to debit your bank account to fund your trading account. If you open a trading account with a non-bank broker e. Often, you can fund your account as a bills payment or fund transfer online or over-the-counter to your broker, the same way you might use your online banking app to pay bills for utilities or transfer funds to friends.
This option is often available to account holders with bigger banks e. Select a Stock For beginners, it is advisable to start with stocks that have established names. Since owning a stock represents partial ownership of the company, it is best to start off focusing on the stocks of companies that are most unlikely to go bankrupt in the foreseeable future. For a more in-depth guide to selecting such stocks, please refer to our article about investing in blue-chip stocks.
Generally, you can only place orders to buy a stock when the stock market is open. The market is open on weekdays except holidays from AM to PM for the morning session and from PM to PM for the afternoon session.
The process for entering a buy order generally follows the following steps: Step 1: Get a quote for the stock. The quote screen for stock shows you the price at which you can buy the stock you want. Below is an example of a quote screen. The quote screen can be confusing for beginners since multiple prices are displayed for one stock. The key information to know is as follows. Bids and Asks: The quote screen shows the best prices you can get for the stock under the Bid-Ask board. A bid price is a price at which a buyer is willing to pay to own a stock.
In the example above, 1 buyer is willing to pay PHP An ask price is the price at which a seller is willing to sell their shares. In the example above, 5 sellers are offering to sell a total of 48, shares for PHP Previous price: In the example above, the first price displayed on the right panel is the previous price. When the market closes, the last price indicates the price at which the stock closed for the day.
Change: This indicates how different the last price is from the previous close. A positive change means the stock is up for the day. Open, high, and low: This indicates the price at which the stock opened the day, as well as the highest and lowest prices it traded during the day. Value, trades, and volume: This indicates the level of trading activity for the stock during the day. Step 2: Place an order. Below is an example of an order screen for a COL client.
The image on the left is what you will see when you want to buy, and on the right is the screen for a sell transaction. Entering orders via online platforms is generally user-friendly, but there are still some things to clarify for beginners: Board: The minimum number of shares that you can buy depends on the price of the stock.
The exchange specifies this. It is still possible to trade odd lot orders but the market for odd lots can be illiquid e. Term: You have several options for when or how long you want to post your order. A day order will be posted for the entire day. The order will only be posted when the market nears its closing time.
Your order will be filled at the closing price. Monitor the Stock Once you place an order, your broker will notify you if the order has been filled. If it was filled, you now own the stock. For your own safety, it is good practice to monitor how your holdings are doing regularly.
After all, as a shareholder, you are the owner of the business. How much time you can dedicate to monitoring depends on you and your style. If you are big-picture-oriented, you can opt to do this quarterly or annually. If you bought the stock with the expectation of a quick profit, you can monitor the stock daily, weekly, or monthly. Regardless of how frequently you choose to monitor your holdings, there is key information to keep track of: a.
General news. As mentioned before, even if the company whose shares you own is doing fine, the stock price might decline temporarily if there is something negative occurring in the broader industry or economy. The best brokers have dedicated teams monitoring the daily news and filtering that information to only the stories that matter. These teams are often headed by prominent research heads whom you might even see on TV occasionally.
This makes general monitoring easier for you because it prevents information overload. Company-specific news. As mentioned before, company-specific events are the primary source of risk and reward for the stock that you own, so it is necessary to regularly update your knowledge of the company. Aside from that, you can also monitor mandatory disclosures. As a requirement for listing their shares on the stock exchange, the Philippine Stock Exchange requires companies to disclose to investors any event that may have an impact on the stock price.
Such disclosures are available in PSE Edge. Below is a snapshot of what the PSE Edge homepage looks like. From there, you can type the name of your stocks in the search bar to see their latest disclosures. Price charts. It is also good practice to monitor how the stock price has trended recently.
Online brokers often have this capability built into their platforms, but there are also many online services that are dedicated to stock monitoring. Locally, Investagrams or Tsupetot are examples of such services. Stock charts differ from regular charts in a few respects: Candlestick formats. The candlestick format is better suited to stock investors because it conveys more relevant information.
Below is a quick introduction to the candlestick also called the bar. Each candlestick corresponds to one trading day, and it shows you what happened during that day. A green bar indicates that the stock closed higher than its previous close it was up for the day , and a red bar indicates the opposite.
As you advance in your investing journey, this format will become even more useful because some traders or technical analysts believe that a single candle can predict what happens next based on how the bar looks. Volume indicators. The vertical bars at the bottom of the chart indicate volume levels for each trading day. Volume indicators generally help you discern whether a move in the stock price is to be taken seriously.
Sell the Stock If you are satisfied with your profits or no longer willing to tolerate your losses, or if you simply need cash for personal reasons, you may decide to sell your stocks. The process of selling a stock is the same as buying a stock. When your sell order is filled, the proceeds from that sale remain in your account as a cash balance. From there, you may opt to do either of two things: Buy another stock. If you see better profit opportunities in other names, you may repeat the process of placing a buy order for your chosen stock.
Withdraw your cash. You may also choose to withdraw funds from your broker account. Online brokers generally have this function built into their platforms. Once you fill out the form and send the request, your broker will deposit the funds into the bank account you specified when you opened your account.
Note that you can only withdraw the proceeds from a stock sale after 3 working days following the sale. This is because the sale goes through the settlement process before the actual proceeds are available for withdrawal. Because stock investing comes with considerable risk, starting slow and experimenting with funds you can afford to lose is advisable.
Although it is rare to lose everything in one transaction, a sizable loss is still possible. Beware of the pump-and-dump scheme. The retail investing scene in the Philippines can be very active on Facebook pages and other online communities.
This may only be investors who are hyping up a stock so they can sell at a better price. This is known as a pump-and-dump, and it can happen in any stock market in the world. Take advantage of free resources from your broker. One key way brokers compete for your business is through their research and knowledge-sharing activities.
For example, MyTrade has live-streamed before featuring its Chairman. Invest in what you know. This way, you get the advantage of knowing how their customers feel about the state of their products because you are a customer yourself. Is there a right time to buy? Though there may be anecdotal evidence supporting this, there is weak evidence from research to confirm the trend.
Incidentally, the PSEi was up 4. What is the difference between stock trading and investing? In terms of orientation, traders focus on quick short-term gains a matter of only weeks, days, or hours while investors focus on longer-term profits months or years. Traders rely on technical analysis for their decision-making, while investors focus on fundamental analysis. What is an ex-date? If you buy a stock on its ex-date, you are not entitled to receive a recently declared dividend.
With regard to how much money you make, you should know that your wealth is built primarily from: An increase in share price. An increase in share price is the result of picking one, or a combination of two or more of the four available management options reiterated above. Over the long term, an increase in profit can be a result of share repurchases or business expansion, as these make each share represent greater ownership in the business. Dividend is the sum of money paid regularly typically quarterly by a company to its shareholders out of its profits or reserves.
This is what is being referred to earlier in the example mentioned previously. These dividends can be paid out to you in cash, in the form of additional shares reinvested on your behalf, or via a direct deposit into your brokerage account, checking account, or savings account. What are the investment types I can choose from? Equities, Equity index funds or exchange-traded funds These funds enable you to buy small pieces of many different stocks in a single transaction.
These funds you can put together so as to form a diversified portfolio. By investing, you also get to own a small pieces of those companies. Mutual Funds This is applicable if you are after a certain company. When can I get the money I earned from the Philippine stock market? In instances, such as market bubbles, you can make a profit by selling your stocks to someone more than how much the company prices it. This is one way for you to earn in the short run.
Now, in instances like this, you can get the money informally depending on your agreed date with the buyer. How much money do I need so that I can start investing? Perhaps, even before, you are already interested to learn about the stock market.
However, you are intimidated by it or are apprehensive about it due to the cost of investment. Actually, how much money you need depends on only two things: Company price per share Number of shares you are willing to buy Just take another instance, Jollibee Foods Corporation, the actual, tangible one. If this is something you think you can afford, then go ahead and try to purchase. However, stock markets do not allow you to buy a single share, as every company sells their share at multiple called board lots.
Oftentimes, this means shares. However, in the case of Jollibee, the minimum share you can buy is Fortunately, in this information age, you can transact almost everything online. Given this little amount of money, you can use this to start participating in the Philippine stock exchange.
But if you have more budget, then you can add some more. In general, investing in the stock market is not as intimidating as it seems. Just take note that you learn the basic knowledge you need, such as knowing the best stock option that would suit the kind of investor that you are. Are you a conservative or a risky investor? There are online tests that can help you determine these things.
This is understandable as the basics of investing cannot be taught in less than 2, words. Now, if you want us to clarify anything or if you have any more questions, feel free to leave a message below. Basic terminologies — standardized number of shares defined by a stock exchange as a trading unit Broker — a regulated professional individual, usually associated with a brokerage firm or broker-dealer, who buys and sells stocks and other securities for both retail and institutional clients, through a stock exchange or over the counter, in return for a fee or commission Dividend — a sum of money paid regularly typically quarterly by a company to its out of its profits or reserves.
Long-term — generated by assets held for longer than six months.
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