Learn how to buy stocks and invest in the Philippine Stock Market (PSE) with our complete beginner’s manual. We’ve also listed the most notable 10 blue-chip stocks that one could start with.
What Is The Stock Market
What’s the first thing that comes to mind when you hear about the stock market? Perhaps you have people in suits and black jackets scampering, shouting and running all over the place. You see them taking orders or calling for it with phones and staring in front screens and connected panels showing continuously changing letters, symbols, and numbers.
Most people have no idea what they were working or yelling about. At least for others, through the help, if media, they get to understand what they are doing.
The Stock Market is largely a place where people purchase and sell stocks from companies. Instead of building their own company, people, both small and big investors buy and sell stocks of established businesses. Simple enough, isn’t it?
What Is A Company Stock?
But for you to fully understand the entire concept of stock market buying and selling, we have to learn what a “stock” is very first.
A stock is a certain amount that implies part ownership in a company and represents claims on a corporation’s assets and earnings. Simply, a stock is a small slice of the business.
How You Earn Income From Buying Stocks?
In the stock market, you earn profits when you buy a stock at a lower price and you sell it at a higher price. This is called Value Appreciation.
Yet another way you can generate income is if the business, which you own stock on shared the company profits to stockholders. This is called Dividends.
Finally, Stock Rights is an opportunity distributed by companies to stockholders that allows them to acquire shares at the lower-than-current market value.
How to Start Investing the Philippine Stock Market
Investing in the Stock Market is a lot less difficult than it may sound. With the availability of online stock brokers and cashless payment systems, establishing an account and trading has never been simpler. However, you need to do due diligence and understand that there also risks involved
As with every financial investment, studying is a key to avoid any loss. Understand essential concepts in the stock market. If you can consistently learn more about the Philippine Stock Market, you increase the chances of making better decisions. Keep in mind that it’s still your money that you will invest.
Follow these simple steps to get started:
Open a stock trading account with an online brokerage
Most online stockbrokers generally need similar requirements for opening new bank accounts.
Check out the stockbroker website and register. Submit the necessary requirements, documents, and identification s.
Fund your account and commence trading
After your account is set up, it’s time to start funding it to get your first stocks.
Best Online Stockbrokers In The Philippines
Check with anyone at the moment trading within the stock market who their broker is and these two names are likely to come up: COL Fiscal and Initially Metro Sec. And for a good reason. These two are popular specifically to novices because of the relieve in creating the balances and in employing their website.
COL Financial is recognized as among the top rated online stockbrokers in the Philippines. It started in August 1999 as CitisecOnline. It is one of the innovators to digitally upgrade the stockbroker services in the country.
Here are some of the features in using ColFinancial:
- Direct access to market
- Fast buy/sell execution
- Professional insight and research
- Streaming data and live charts
- 24/7 usage of COL account and portfolio
- Low commission rates
- Accessible to Smartphones
How to start an account in ColFinancial
1. Visit their website. Simply click “Open an Account”. COL provides 3 kinds of accounts based on your preliminary investment.
COL Starter (Minimum Investment: P5,000) – An entrance-level account, for beginner investors and traders. Appropriate for long-term investment. Provides use of basic financial reports, normal market information, and end-of-day charting information.
COL Plus (Minimum Investment: P25,000) – For active traders. Offers streaming quotes/data, comprehensive study reports and live graph data with other customizable options.
COL Premium (Minimum Purchase: P1 Million) – For premier traders and investors. It provides use of all accessible features along with a personal partnership manager dedicated to helping you out.
Note: Start at COL Starter to familiarize yourself with the platform. As you invest additional funds and your portfolio/buying power reaches P25,000, they will upgrade your account to COL Plus. If in case your funds go below P25K, your account still remains at COL PLus.
2. Fill up the application forms – After picking out an account, you have to download and print kinds and distribute additional specifications to move forward.
3. Complete the requirements – You need to submit all requirements to COL Financial’s office in Ortigas or though iRemit branches. Yet another option would be to attend a free of charge COL seminar that they execute regularly and submit certain requirements there.
4. Funding your account – The last step is putting funds into your bank account so you can commence trading. You may personally go to their workplace or by way of online banking. An important thing to remember is that you need to fund your money within 3 months after you distribute all specifications. Failure to do this will require that you re-submit every little thing again.
There are a variety of options for easily financing your account, like BDO, Metrobank, BPI, UnionBank, and AUB. Also, you can check your bank’s online platform and see if ColFinancial is within the list of billers. You can also go directly to ColFinancial’s offices to deposit to your funds. For more information you can visit them at their official page at ColFinancial .
FIRST METRO SECURITIES
First Metro Sec is the stock brokerage platform of the Metrobank group. Founded in 1994, it’s a trusted company of online stock trading services in the country.
If you have a current Metrobank account, the initial down payment will be waived. An initial down payment of Php 2,500 is required for non-account owners. You may just want to open a Metrobank Savings Account which is just around P2,000. In that way, you can easily deposit or withdraw without the waiting on cheques or going in long lines in banks.
How to open an account with First Metro Sec:
1. Go to their website. Click on “Get Started” then “Open an Account”
2. Choose from options:
- Metrobank account holders.
- Other bank depositors (requires valid ID’s).
- On the site opening of an account. This requires personal appearance and needs you to go to their office.
3. Fill the required forms. After completion, an email will be sent. Go through the link to confirm your account.
4. Provide the necessary documents.
5. For non-Metrobank account, they will call a video contact with you.
6. An email verifying your account is sent.
You can fund your First Metro Sec account either through your Metrobank online account or deposit over the counter. For more info, you can check them at their official page at First Metro Sec .
BDO Nomura is a stock trading platform, a BDO Unibank Inc and Japan Nomura Holding’s joint venture to create an online stockbroker in the Philippines. It took over PCIB Securities, which was acquired by BDO when it was still with Equitable PCI Bank.
BDO Nomura is a good investment solution for those who present an existing BDO account holder. Like First Metro Sec, no need for deposits to fund the account if you have an account in BDO.
How to open your account with BDO Nomura:
1. Visit BDO’s main site. As you notice, you must be enrolled in BDO Online Banking.
2. Upon sign-in, you’ll get an OTP on your phone. Enter in this in the appropriate display.
3. Follow the steps up until you reach the Trader Profile and Suitability online form. Complete all required field.
4. Simply click Confirm when done. Wait for email activation of your account. It usually takes 24 hours to complete the full application.
How to fund your BDO Nomura account:
1. Log-into BDO Nomura with your BDO Online Business banking credentials
2. Click the “Deposit/Funding” tab.
3. You’ll be presented with a page displaying dropdown options so you can move money from your BDO account into the BDO Nomura funds.
You can get more information from BDO Nomura’s official page.
What To Consider in Choosing an Online Stockbroker
The mentioned online brokers are an excellent choice for beginner stock traders and investors. At the end of the day, however, everything boils down to your lifestyle, time, asset worth, requirements, and needs. Here are some ideas to help you simplify the process of choosing the right broker for you personally:
Fees and Expenses
All online stockbrokers charge a fee for services. Regardless of how much you have in the profile, familiarize yourself with the various fees featured by each online stockbroker.
There are variations on charges among brokerages and it may appear small, however, if you have a lot of assets, these differences could be significant. In general, the lower the service fees, the better it is for you.
Features, Functionality, Reliability
The biggest reason to consider if you want to use an online brokerage is efficiency and convenience. Having the capability to check and trade with your computer and smartphone should be given.
That’s why it should have all these online features, that it’s always up and running during market hours and that it’s straightforward enough to use when you’re accessing it. This is your own money right here and time is important in the stock market. A few minutes (or seconds) can make a difference between gain or loss.
Inconvenience free funding and withdrawals
There has to be simplicity, where you can deposit and withdraw money to your account.
Just think about how time-consuming it would be on visiting the bank to deposit some funds, where you have to wait for long hours on the line. You may end up scrapping the trading and investment altogether, which in turn removes potential profits.
Some online stockbrokers provide smooth integration with banks, where it allows you to deposit and withdraw the same way you send/make payments online. This allows the deposit and withdrawal of funds a lot easier.
Trading Resources and Features
Evaluating and projecting a stock’s value may be the name in the game on the stock market. That’s why you’ll need all the sources and info you can get to generate a good choice.
Some online stockbrokers like COL Financial and First Metro Sec provide function charts and extra resources on the websites to guide you with your selection.
Top-Notch Customer Care
The need to seek advice, concerns, responses, and statement could come up from time to time. Having fast, reliable, and helpful customer assistants willing to address your queries should be present.
Stock Trading and Investment Tips
It’s generally exciting the 1st time we try one thing out, appropriate? Sometimes, the anticipation by itself is enough to provide us with a feeling of exhilaration that increases to the real moment we all do it.
And I’m ready to bet that you’re looking at this because you listened to or learn about other people’s success stories from the stock market. Stories of regular people making hundreds and even thousands and thousands in just a handful of months make you want to jump in.
You’re prepared to pull the trigger, prepared to get a bit of the activity. But before you dive into this total thing, here are a few useful guidance:
Read and Study
Take the time to understand and study how the stock market works. Because you’re looking at this, you’re off and away to a good start.
Understand that for every success story out there, there are dozens of significant failures. Should this deter you in making an investment in the stock market? Well, not exactly.
But it needs to serve as a warning that you should take care. More often than not, there are only modest profits and gains. Don’t go to the stock market and think that you earn big overnight.
Lots of people delve into the stock market to get moderate gains. They use it as an option for investors to reach their ideal monetary goals. And you can do it that way too, with the appropriate knowledge, self-discipline, mindset, and expectations.
Your Risk Profile
Risk profile refers to a person’s determination to take precaution in investment. It’s generally used in deciding a person’s investment strategy.
As an example, a high-risk user profile has far more tolerance toward high unstable stocks that can achieve dramatic benefits yet at the expense of a greater chance of running into a loss.
Conservative users tend to favor “safer” ventures with their investments but have a slower growth rate in profits. Some use both, by merging both risky and conservative stocks in their portfolio.
By being aware of what your risk profile is, you can create an investment method that aligns well to your desired goals.
Stay to your financial need
Stock trading reveals a wonderful ability to grow your funds at a quicker rate compared to banks. This doesn’t suggest, however, that you should put all your hard earned money.
Take care first of your present financial commitments like home, food, utility bills. Be sure to have funds in your bank for your necessities. You won’t fall at risk that you don’t have cash in an emergency.
Know the basic stock market principles
In buying and selling stocks, it’s important to learn about the most commonly-used terms. This way you can continue to examine the companies you’ll be buying stocks. You need to understand the financial and stock market phrases you’re looking at.
You can start by reading publications about making an investment, watching videos, and reading articles. Join discussion groups and forums to learn more about the stock market.
Watch your emotions
Think of the unfortunate situations that occurred in your life if you’re emotional. Did it turn out well? Generally, bad stuff can happen once we let emotions get the best of us, particularly when it comes to our money.
It’s easy to fall into the hype of “hot” stocks that everybody seems to get. Study before you should buy or hold, without getting emotional and attached to a certain stock. Learn how to use your brain above your feelings. Study and assessment are still the best tools in relation to determining a stock’s importance.
Well-timed and frequent monitoring is vital
Some people argue that they no longer checking out their account as often, considering that they’ve dedicated they’re portfolio to blue-chip stocks and that they’re in it for the longer term.
Frequent monitoring is recommended. Bear in mind, the big reason why you’ve picked to invest in the stock market is due to the larger gains you can get versus allowing your money to sit down in the banks. And any slight inaction can be as risky as being hyperactive.
You might skip some good stocks if you allow your money to remain with under-performing stocks. Find the best balance on your own activity and spend a specific time for looking at your portfolio’s performance.
Be conscious of fees/charges
We mentioned this in the prior section. All brokers are certainly not created equal and knowing those provide the services you need with all the corresponding costs you can tolerate is an important aspect to consider.
Some investors may opt for a broker with higher fees if they see that the features fit their needs.
Keep in mind that the Philippine Stock Exchange and Securities Clearing Corporation has transaction and service fees. Be sure to know from the stockbrokers how the sales and taxes affect every time you trade stocks.
What’s your long-term target?
Some people put money into the stock market using a specific aim in mind. Some do it to conserve for retirement, others for funding upcoming educational costs, some make investments to help them fund their dream home or others invest for some future trips.
Knowing your goals, it’s possible to have an idea of how much you invest and allocate to your portfolio. In addition, it sets the tone for your investment, since you now have a goal, figure, and date in mind.
Keep this in mind on your portfolio’s growth. It depends on 3 main variables: capital, yearly annual revenue, and a number of years you keep your investment.
There’s still a small percentage of Filipinos that invest in the stock market and there’s a belief that stock trading is for the super wealthy with tons of money to invest. As you’ve noticed the requirements from an online stock broker we’ve discussed earlier, this is not true. You can begin with well under Php 5,000.
For beginners in stock trading, it’s recommended to begin small in order to familiarize yourself in the market. As you become knowledgeable, steadily allocate more funds, while consistently expanding your understanding. An important lesson for a beginner is to only invest funds you’re ready to lose.
Know about the businesses of the stock you’ll buy
With all the ticker symbols flashing in your screen, it is easy to get overwhelmed when you’ve just started.
Don’t stress, stick with the core theory of stock buying/selling, which is to purchase low then sell high. And to do this, you have to read around companies that you like to buy stocks.
The most effective people in the stock market are those who make it a point to actually understand what a firm does and how it works. They fully grasp and see the actual values that will assist them to evaluate if a company will be worth investing in.