According to the latest statistics of the Stock Market Investor Profile Report for 2017 of The Philippine Stock Exchange, Inc. (PSE), less than 1% of Filipinos invest in stock market. Despite its existence for decades, only a handful of Filipinos invest in stock market.
WHAT IS STOCK MARKET?
A stock market is a venue where investors meet to buy and sell shares. First, let’s define a stock. If you own a stock, it means you own a share of a particular company. For example, if you own a share of Jollibee, you can say that you are part-owner of it. The simple question is: How can you buy a stock in the first place? Where do you go? The answer: invest in STOCK MARKET.
Those investors that own a stock that they are looking to sell will place an order that states how many shares they are looking to sell and at what price, which is known as an “offer” or “ask” price.
When buyers and sellers both agree on a price, there is what we call exchange that matches them, and that is posted as the stock price. Therefore, the prices you see are simply the last prices at which sales occurred.
WHY ONLY LESS THAN 1% INVEST IN STOCK MARKET?
Can we blame 99% of Filipinos for shying away from investing? So many myths about the stock market are there plus the wrong mind set of Filipinos hinder them from investing in stock market. They are summarized in the list below:
ONE |I HAVE NO TIME
TWO | STOCK MARKET IS DIFFICULT AND COMPLICATED
THREE | STOCK MARKET IS ONLY FOR THE RICH
FOUR | STOCK MARKET IS NOT A SAFE PLACE FOR MY MONEY
FIVE | STOCK MARKET MAY BE A SCAM
HOW TO INVEST IN STOCK MARKET?
Actually, you don’t need a lot of capital when you start to invest in stock market. For as low as Php 5000, you can start investing already with an online stock broker.
To participate in the stock market, you need a money and a broker. To get started you will need a brokerage account. It is easy to open one, but it won’t mean that it should be done without thought. Fees vary considerably and you should also consider the available tools, advice, speed and closeness to your execution order. Researching and asking questions are must-do things prior to opening and funding an account.
Trading vs Investing?
Although they are similar, they are also different in a way that trading is buying a stock for the purpose of selling it soon. The gap of buying and selling could be seconds only. On the other hand, investing is buying stocks with the intention of holding it for a long term: five to ten years maybe, depending on your purpose.
As for me, I don’t do day trading. Rather, I invest.
Lastly, stock market isn’t a scam. Rather, it is a legitimate investment open to all Filipinos willing to take risks. Lots of people have earned from it already.
What are you waiting for?
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The views and opinions expressed herein are the views and opinions of the author only.
littlemisadvencha is a Filipino Civil Engineer, M.S. student in Structural Engineering and a fur mom of four-legged babies. She writes about her experiences to inspire and educate.