2020 GUIDE – How to Invest in Philippine Stock Market – Tips, Tricks, Stock Picks, Recommendations & Free Online Lessons & Tutorials for Beginners
If you are
- A beginner in the Philippine stock market totally blank and clueless about stock market and investing in Philippines Stock Exchange (PSE)
- Or an already-investor but looking to have a more practical understanding of investing in the Philippine stocks market
then this is definitely the page for you.
Here you’ll finally be able to nail down the basics and essentials of investing in the Philippine stock market even if you have zero experience.
The goal is to give you as few information as possible so you can start quickly but never carelessly. Few info lang muna because I want you to avoid information overload which frustrates newbies that stop them in taking the first steps. Time is your best ally when it comes to investing, so making sure that you start as soon as possible is of utmost importance for you. With that said, you can download our quick start guide to investing in Philippine market pdf for beginners here. It’s the summary form of this page =).
In this page, expect that
- You’ll be able to confidently start and do your first ever step as a beginner in the Philippine stock market world.
- You’ll also have access to various tool and resources that will equip and help you more as you go along your financial journey of investing
- You’ll learn where you can get your personal support group to cheer you up, holding your hands while you’re just starting investing and shortening your learning curve
- And lastly and more importantly, you’ll have a sound mindset that will keep pushing and inspiring you and that is far more rewarding than any profit you can get in the stock market. Why focus on mindset? Because maniwala ka o sa hindi, your money problems is 90% mind problems. And soon you’ll realize that investing in Philippine stock exchange has also got to do with controlling this mindset.
My First Days in the Philippine Stock Market
But before that, let me share my own story how I actually started investing. I was really ignorant financially before, let alone on investing in the Philippine stock market.Totally had no idea about financial and investment ek-ek ( I finished a highly technical engineering no-business degree!).
I just first considered thinking about stock investing weeks after I had read Bro Bo’s book which ignited my financial freedom expedition. Then it was followed by an invitation from one of my lecturers during my board exam review.
Up to now, I could still clearly remember how that kind professor said his regret on his late entry to the market. That it took him many long years before he and the stock market met along the road.
So when I finally decided to give it a try, I went the next day to an online trading brokerage firm. I started really small – 10k lang. (Now, you can even start opening a trading account with as small as 1k lang).
Just like starting anew in anything, my clueless personality made all the moves for me in a wide vast field of unknown.
All I had to hold on was my mustard dream of financial freedom and the belief that stock investing might be a path for that dream. I managed to cut the chase, and applied for an account.
For beginners, I recommend opening an ONLINE stock trading account because of the convenience it offers compared to a traditional broker.
Unlike using traditional brokers which is the practice before where you have to call your live broker to place stock orders in your behalf, having an online trading account allows you to do the same on your internet-connected computer/mobile screen on your own, anytime and anywhere (even if you’re outside the Philippines).
Opening an online trading account is just like opening a regular bank account (think of your payroll/ATM). All you have to do is go to the website of your preferred online broker, read the account opening instructions, download all the forms, print and fill them out and submit it together with all the other requirements to their office. After submission, you just wait within the next 2-3 days for their email confirming that your trading account is ready for step 2 – which is funding it.
Good news is, recently (as of March 2020) COL Financial now allows online registration.
This sign-up option is available to everyone, and is best for OFWs abroad who want to invest in the Philippines even if you’re the country.
You can check HERE a simple tutorial on completing this ONLINE registration to open your account in COL Financial (formerly Citiseconline) as online stock broker.
My First Purchase in Philippine Stock Market
Philstocks was my first online broker, precisely because it was the one I initially found out in the net that required only 5000 initial deposit to actually start trading. Currently though I’m happy as a loyal client of COL Financial, formerly Citiseconline.
Minimum investment required was 5000 pesos, but I put down 10k just to put a front that I have more than the minimum. Pride I guess haha. The lady in charge gracefully accepted it after examining my forms, then handed me an official receipt, which was also the highest-valued receipt I received ever since.
With my humble 10k initial investment, I was too excited to buy a company share and brand myself a part-owner of a giant company. Hard-core traders would laugh on me for that, but I was already more than happy just giving it a try.
You can actually do this during your account opening day in their office by making an initial deposit just like what I did above but you also have the option to postpone this and just do the funding after you’ve received their email confirmation containing your account details. This email will include your account number which you’ll use in your funding-your-account step. Note that your initial deposit already forms part of your investments which you can use to buy your first stock.
Funding your trading account works via merchant payment through a bank (BPI/BDO/Metrobank). If you’re aware of paying utility bills(Meralco/Mobile plan) through banks’ merchant payment, that’s exactly it, with the difference that you use your trading account details given to you by your broker through your email.
An example taken from online broker COL Financial website is shown below for manual bank deposits.
What I recommend though is the more convenient option which is doing merchant payment online with your bank’s online system (ex: via BPI Express Online as below).
There’s NO required monthly funding.
How much you’re going to put to your trading account on top of the initial deposit you put is completely up to you. While your online broker may require a minimum of Php5,000 initial deposit to activate your trading account (activation means your account is ready to buy your first stock), it’s all your decision whether to add more on that later on. As such, there’s totally NO required amount you need to add regularly (weekly, monthly, etc) to your investments. However, take note that your buying power will obviously depend on the amount of fund you put into your trading account.
Check on the respective procedure of your online broker on this step but this should be a very simple task.
Below is a lengthy tutorial in case you have questions related to the above steps.=======
The moment I received my account details in my email after few days ready with buying power from my initial 10k deposit, I made my first stock order.
And my first ever transaction: buying 2000 shares of Megaworld Corporation (stock symbol MEG) at 1.87 per share!
Total cost is 3763.60 only. Wheee!
I was actually totally clueless on what to buy for the first time, and only got the hint of buying MEG from that same professor who’s teaching in our board exam review.
Recollecting, when the class becomes bored with chemical principles and unit operations stuff, he would start cracking some jokes, and then afterward would invite us to try investing. He suggested that we experiment with MEG. His jokes served its purpose, (he’s actually the first to laugh out even before delivering the punchline!), but I got more curious and gravitated to his stocks stories and followed his MEG recommendation.
To see how stupid I was at that time, I was not even aware that MEG is a real estate developer company. Haha. Whenever I see its stock code MEG on my computer screen, Sharon Cuneta entered my mind, you know, the local MEGastar. Booboo!
But who cares? When I posted it online, my computer screen didn’t ask me anyway!
And when it got matched, my heart jumped with joy. I went back to my work, but I smilingly secretly applauded myself. Deep inside I was telling myself “I hardly spend 500 pesos for a purchase, and here I am spending 3.7k for something I can’t even touch!” Whaha!
That was August 31, 2010, a different Tuesday for me.
or watch this short clip below on placing a buy or sell order when Philippine stock market is open.
There are now three questions now you’ll need to answer at this point:
1. What investment strategy are you going to use? Are you going for long-term, short-term or a mix of it?
2. With the strategy you have in mind, what stocks will you buy? With more than 200 stocks to choose from, how do you decide what to buy?
3. Given the strategy and the stocks to buy, WHEN do you buy/sell? In other words, what/when are your entry and exit points?
It is important that your answers to these questions should reflect your goals, time-horizon and trading skills that you have. Your answers to these will also help lay down your plan for your investments (which is critical), how much time you’re going to devote and to what extent your daily routine will be changed.
For newbies, I recommend starting with Peso-Cost Averaging (PCA) while you’re in your learning curve. This is a simple strategy that involves investing fixed amount of money in giant companies at regular intervals (monthly, quarterly, etc) over a long period. This is a totally passive approach which does not entail daily monitoring. However, those doing this strategy should understand that this really requires a long time frame – as long as 10 years or more. You can learn more about it here.
Personally though, I’m primarily using a modified PCA called Strategic Averaging Method which answers all the three questions above. It is designed for those who want to maximize their stock investments without drastically changing your daily routine. You can check here for its details.
My First Profit from Philippine Stock Market
Two days after, I checked my account online, and BANG! I saw a shock of my life! The price of MEG went up to 2.05!
I was thrilled! How can multiplying money be that easy, I thought! Feeling all the excitement, I decided to sell it right away at that price. I posted a sell off-hour (after trading hours) order at 2.05 per share that afternoon and was hit the next morning. Paper profits( meaning profits that’s still virtual until actually sold) became actual realized gains!
I did the math, ‘twas more than 200 pesos gain just for three days. Hmm, not bad at first sight.I don’t think I can spot the same by whole-day roaming along the busy streets of Metro Manila.
But computing the rate of return, that’s more than 9% gain in just a three-day period of time! That was obviously not REALLY bad! (Note: To compare, your money in your favorite bank grows at less than 1% a year).
I disclosed below a snapshot of what I have experienced later on that year 2010 just as a beginner.
As you can see above, my second buy of stock was 2000 shares MPI at 3.55 per share.
I couldn’t remember where I got the inspiration of buying Pangilinan-owned MPI as my next move (I guess from some rumors), but elated by price appreciation I had in MEG in just three days, I purchased 2000 shares of it the next trading day. After just one week and one day, seeing another good return, I immediately put a sell order, and broom, that’s instantly more than 7% gain!
The next was even more fantastic and ecstatic.
I still remember when my Math reviewer this time said “Mahina nako pag di umabot ng dose [yung price] ang SMDC”. He appeared to me as experienced enough to give such a prediction.
So innocently and experimentally relying again on that advise alone and trusting his instincts, (without knowing yet about fundamental and technical analysis), I entered a buy order for 1000 shares of SMDC. Seeing it was executed, I went back to my job, and waited what would happen next.
But lo and behold, in only just two weeks, its price went up high to 10.36. Super amazed by the profits in a very short period of time, I immediately grabbed the chance, and reaped that whopping 21% gain. Waaah!!!
As you can see from the list, the profits was even followed by other buckets coming from MEG and FLI.
I bought 3000 shares of FLI and another 3000 shares of MEG at 2.49 at the same day. The 3000 shares of FLI though took a longer time to appreciate, that I needed to average down by buying another 3000 shares at 1.27 per share until I finally sold it all at 1.35 per share a gain of almost 2%, still bigger than the interest rate of banks.
But the 3000 MEG shares I sold immediately when made its way up to 2.78 per share at an enormous 13% gain in just three weeks.
Is your money sleeping in the bank?
Here comes the more interesting part.
You can check the prices of the stocks mentioned above and you’ll find out how the stock market could be a GREAT OPTION when it comes to growing one’s wealth for the LONG TERM.
This does not include yet the dividends given for the last 3+ years. This gives us an insight as to the common observation that the rich get richer. The truth is that there are many available vehicles to ride on that make wealth building and protection a lot easier. And investing in the stock market is just one of them.
Now digest all those figures and start your imagination. Henry Sy’s BDO and Ayala’s BPI will never ever offer such interest rate in your savings accounts.
What they would skillfully try to do instead is to attract every individual employee to deposit their hard-earned money in the form of savings, time deposit accounts, checking accounts or any other fancy name, invest them wisely to buy shares just like what I did, obtain that 10%-20% gain in a matter of DAYS with their trading skills, and as a sign of respect and thanksgiving after leveraging on your money, give you a 0.5-2.5% ANNUAL interest as consolation and solace. Now you know how they can afford to build and maintain those large air-conditioned buildings and pay all their bankers and managers.
Now I m not sure if those consecutive gains is just what they call beginner’s luck, but that great performance really caught my interest in the stock market as a vehicle to achieving some of my goals.
At this point, it would be careless of me if I would not mention the fact that even though I earned during my first days in the market, remember that the risk of losing money will always be there. And so it’s important not to be carried away by the returns mentioned above and balance your view with the risks always involved.
My Current Investing Strategy
Fast-forward, now I’m still learning, and… earning.
In fact, many times I get surprised when I check my email and be notified by the money being added into my account as dividends I received as an investor (without doing any active work except to invest). In the sample below, just the dividend pay-out alone already beats the earnings from the bank’s savings account interest! (A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. You’ll learn more about this in the lessons below.)
As mentioned above, I primarily use now the Strategic Averaging Method (SAM) which has removed all the stress in all my investing decisions. I believe it’s the easiest way of growing one’s wealth through the stock market in the long term. (You can learn more about this strategy here.)
And looking back, I realized I was very lucky I started doing this early in my life. At least, may napapala ako (investments) kahit papano in my years of working (without so much analysis).
That way I can enjoy my present life without worrying (or sacrificing) my financial future. Many people I’ve met through this blog actually showed so much regret on their LATE entry in preparing for their financial future. And this is one of the reasons why I started this blog.
To pay it forward, I shared all my learning (mistakes included) in this blog from the point I started investing with zero knowledge.
So enjoy reading the rest of this page . Share your questions/comments below if you have. Also subscribe in the form below so you get the latest posts in this site straight in your email.
You can also stop muna at this point and ponder how investing in Philippine stock market may help you in achieving some of your financial goals.
Pero kung nagmamadali ka na talaga, watch the short introductory video I made here where I summarized the basics that you need to know and do to actually start investing in Philippine Stock Market. After watching, just follow the suggestions outlined below for more guidance.
SUGGESTION A: As good introduction into investing in stocks, you can read My Maid Invests in the Stock Market… and Why You Should, Too! by Bo Sanchez. I personally started with this tiny book
This is a light very interesting read with not so much financial jargon.
It’s just like you’re reading children’s stories, but this time a story that can change your life.
Download you FREE ebook HERE.
SUGGESTION B: Make sure to download your second investing ebook which contains all the basic things you need to know about investing in the Philippine stock market.
Your free ebook is specifically designed for absolute beginners, much like an introduction to a vast knowledge about the stock market.
All the basic topics you need to know to start investing are shortly discussed there.
Time to read the ebook is only 15 to 30 minutes, which means you can be mentally prepared buying your first stock in a matter of less than an hour!
Simply subscribe in the form here and the ebook will be sent to your inbox right away.
SUGGESTION C: Browse through the outline below to get a more comprehensive discussion of your selected topic, only if you want.
The eBook above you’ll be receiving should actually be enough for you as a warm-up; but should you want to upgrade your investing knowledge, simply go through the list of contents below and find answers to your questions.
Stocks 101 – Shucks! What are stocks?!
Be a Strategic Investor
Things you’ll need to buy your first stock
- How to Open an Online Account in COL Financial/Citiseconline
- How to Place Buy & Sell Orders in Philippine Stock Market
- How to Choose What Stocks to Buy and Sell
- How to Do Easy Investing with Strategic Averaging Method
- How to Withdraw Funds and Enjoy your Profits
- When to Place Your Orders – Trading Hours
- Other Stock Market Investing Resources
If you have more questions not answered in the ebook and content outline above which you want to be added and covered here, simply put your questions/comments/message below and we’ll see to get back to your query and improve this blog for the benefit of other new investors like you!
Enjoy the journey, Have fun investing!
At this point, I want to say “WELCOME TO THE PHILIPPINE STOCK MARKET!’
Again, if you have specific questions in mind, you can put them in the comment below (or send them through my contact page) and I’ll surely respond asap.
It’s high-time you start making your money work hard for you!
Have fun investing!
See you at the investing arena
Omeng Tawid \_(“,)/
PS: Share your questions/comments below and I’ll see to answer them agad. Or you can send them through my contact page.
PS2: You can download our quick start guide to investing in Philippine market pdf for beginners here. It’s the summary form of this page =).