Investing in stock market is one of the best way to secure money and at the same time compounding naturally by means of dividends or interest. On the other hand, saving your money on the bank just benefits the bank owner. Banks are just giving roughly 3% annual interest compared to stock market in which you’ll get, on average, 10% annual interest in the long run.
To start with your application online, just simply choose the online brokerage firm and then choose the price you’d want to purchase. You’ll be given the detailed instruction on how to complete the process.
In the Philippines, Col Financial is the best recommended broker. You can check it out at colfinancial.com and you will see helpful tips and information, plus clear instructions on how to start with their investment program.
This article will give tips and helpful guides about stock market.
What is a stock market?
From Wikipedia, “a stock market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include securities listed on a public stock exchange as well as those only traded privately.
The stock market is a place to buy and sell stocks.
What are stocks?
In it’s simplest definition, stocks are shares of ownership in a corporation or company.
In the Philippines, the Philippine Stock Exchange (PSE) is the corporation that governs the local stock market. People can b invest in stocks to benefit from a company’s value potential over time.
The moment you invest into a stock you will be a shareholder of that company or corporation. As a shareholder, you can earn dividends.
Tips on investing in stock market
Tip # 1
If you invest in stock market as early as possible, you can get greater returns because it can compound the value of your investment especially that the value of stocks keeps climbing up.
This gives you the best chance in achieving your financial goals in a certain period and gives you the ability to later enjoy the benefits of your money working for you.
If you invest Php 10,000 at the age of 30 and you manage to have your investment grow by 8% a year, 20 years later at the age of 50, your investment will be worth Php 46, 609. On the other hand, if you invest Php 50,000 it will become Php 233,000 in 20 years.
This is for the capital alone, not including any amount you can add on a regular basis.
Detailed diagram, assuming 8% annual interest:
|Amount of investment||How much your money be in
Just simply put in a “$” sign or a peso sign, or whatever currency you have.
Tip # 2
Instead of investing just once, invest regularly or add some amount to your investment; preferably every month if not every year.
If you invest Php 25,000, allowing this to grow by 8% a year, plus adding the same amount, let’s say you prefer doing it every year, then after 40 years, you will have an est. Php 7M.
Let’s assume that the annual interest is 8% and you deposited Php 100,000, plus a yearly additional of the same amount. In 5 years, it will already be Php 633,592. In 10 years, it will be Php 1.6M.
Regularly adding to your investment is the key.
Tip # 3
Stock exchange price may swing up and down depending on the economic stability or other factors affecting the price to change. Just like the price of bitcoin, it goes up and down frequently but if we see the long-term trend, it is always on the upward direction. This is the same for stocks. Just let time do the job of compounding it.
The common mistake that some people do is buy-now, sell tomorrow, similar to day trading and most of them lose some of their investment. Short-term investment is not recommended.
Tip # 4
Spread your investment to big corporations
Try to distribute your capital evenly to a number of stocks in different industries or sectors so as not to put too much risk in one area.
Investing in stock market is a good way to let money work for you. It takes discipline on your part to be able to achieve a desired financial goal in the future.
I highly recommend everyone to be inspired by reading this free ebook about how a maid became a millionaire with stock market.
Please leave your comments below if you have some question, suggestions, or you just wanted to say something.