The Little Things Every Newbie Should Know About the Stock Market

So You Want to Learn and Earn from the Stock Market?


What is the stock market?

The stock market is simply a place wherein you can purchase shares of publicly traded companies. In plainer terms, you could get to own a part or portion of the company that you're buying shares from. It's like taking a slice out of the whole pizza. Let's say you're a Jollibee fanatic and would like to have a franchise of the said company. However, you still can't afford the minimum amount of requirement for every investors which is around Php 6-10 Million and store size requirement of 80 sqm, then you can still own a few shares of JFC (symbol used in the PSe) at Php 75.95 per share (as of writing, you see it varies per trading day).

I'd like to take investing in the stock market that way. While others are trading and play around with the purpose of "buying on low and selling on high" or short term investing.

Let's see, investors usually play for the long term while traders play for short term. Let's not touch the trading for now as there are myriad of resources which I would be sharing at the latter part of this post. Let's focus on how you could get started in the stock market. 


Ask yourself  and DO invest in the stock market if;

  1. You would like your money to work for you. Instead of the other way around.
  2. You would like to boost our local economy (You would then be included in the 3% of the total population in our country that invests in the stock market - elite much?! haha)
  3. You'd like to increase your financial literacy.
Do NOT invest if;

  1. You would like to stay an employee all your life and depend on your company's retirement plan.
  2. You would like to believe in the myths about the stock market forever.
  3. You would like to stay financially illiterate forever. 

Okay, the latter sounds rude but based on experience, I've learned to make wiser and much more informed financial decisions since I started joining the stock market investing bandwagon. I've become more interested in what's going on in our country and have a deeper understanding of what truly makes a country progress. For sure there are lots of things which I would yet to learn and discover but I'm glad that I'm on my way towards it. Now, before I'd get to sound overtly patriotic, let's get into the million-dollar-question, "How?"

So you've finally decided that;

  1. You'd want money to work for you
  2. You'd want to have your own retirement plan
  3. You'd want to get rich through the stock market
Congratulations! You've just made the single most important decision that would eventually bless your life in bazillion of ways. But wait, before you'd get too excited, remember that the stock market is NOT a money-generating machine that you'd just switch on and tada! Lots of money being released. Remember that there are actual operating companies behind those ticker symbols you're hitting "Buy" or "Sell"  so it's important that you "do your homework".

What are these homeworks, exactly?

  1. Determine as to how much money you're willing to invest. It doesn't have to be millions right away. What's important is that you do. And you do it now! (Well, again, once you're ready).
  2. Choose a broker - whether it be online or traditional. Decide which one. Online brokers are those that let you start with a minimum capital (which also means less or to no supervision). If you're going to start with Php5,000, Php10,000 or Php25,000, it's best to monitor your fund on your own so you could get to learn from your trading activities.
Below is a list of certified online brokers in the Philippines along with their websites so you can check them out and compare. 

AB Capital Securities, Inc.
Accord Capital Equities Corporation
BPI Securities Corporation
CitiSecurities, Inc.
F. Yap Securities, Inc.
First Metro Securities Brokerage Corporation
RCBC Securities, Inc.
Wealth Securities Inc.


Traditional brokers, on the other hand, are the ones who can advise you on which company to buy shares from. They're the people who "do the math" for a living so you can focus on what you do best and they too, do the dirty works for you. With that, I mean they spare you from the dreadful works of spending the nights with a cup of coffee at one hand and charts on the other. In short, they would have to deal with the complexity of the "homework" for you.

I started with an online broker, which is Citiseconline. So far, they're doing a great job in maintaining smooth and swift trading transactions. Also, they have probably the greatest and most responsive customer service people (Folks don't worry, I am not in any way affiliated or paid to do this, #justsayin). 

3. Determine your risk appetite. Are you risk-averse or risk taker? Also, you need to know whether you're investing for long term or short term.

4. Choose a company that you want to invest in. Learn as much information about it, monitor their earnings, download reports from the Philippine Stock Exchange website, monitor the price pattern so you'll know when is the best time to buy or sell . Oh yes, it helps to learn Technical Analysis and Fundamental Analysis (don't fret if you're yet unfamiliar with these terms as I will explain and provide resources later).

5. Be on the look out for the latest relevant news and issues about the company that you would like to invest in. The more good news and rumors, the better.

Alright, so you think you're good to go? Again, you need to determine the following in order for you to get started in the stock market.

  1. Risk appetite - risk averse of risk taker
  2. Amount of money you're willing to invest
  3. Type of broker - online or traditional
  4. Company (ies) to invest in
  5. Investment Time - long term or short term
Now if you're determined and have decided on your choices and wish to get updates from time to time, below is a list of forums, blogs that Philippine Stock Market investors and traders flock in. Most of them are on Facebook too for easier access and interaction. 


Forums

1. Market Mirror - Probably the most comprehensive forum of traders and investors. Big time investors like Jerry Angping has previously posted "tips" and news on the said forum. There are also seasoned technical analysts that share their views and forecasts on specific stocks. 

2. Philippine Stock Market Forum - Let's face it, Market Mirror can be a little intimidating for newbies as you get to read well thought and well researched posts from seasoned traders and analysts but that doesn't mean you can't have a place wherein you could just ask, share your frustration without worrying the "big guys" might laugh at you (well I don't think they really do that though), then this forum is for you. Personally, I am more comfortable posting questions and comments on here. 

3. Phil. Stock Market Discussions, Comments and Forecast - Perhaps the most newbie friendly forum on Facebook that allows newbies to hear and be heard. Maintained by Remigio Ocampo, this community is a great place to ask specific stocks and get insightful reviews and commentaries from co-traders and investors. Remy would also provide his fearless forecasts and lo and behold, the next trading day or week, you'll see significant movement (upward if you wanna be particular) in the said issue or stock.

4. LaidTrades - Well maintained and updated by seasoned traders and analysts Ron Acoba and Aldrich Sevilla, the community contains well researched updates and reviews on specific stocks not only in the Philippine Stock Market but also about forex and commodities. Oh man, it's like your one-stop investing  updates shop! 

5. Traders Pizza - Probably one of the pioneering, if not the oldest, forums that cater to traders. And with that I really mean traders. It's where tsupiteros would share and sometimes fight over their stock tips. Nonetheless, it's a great place for rumors and get a good laugh ;-)

6. Finance Manila - Network for traders to get the latest news and their forum is a great place to peak at the hottest tips too.  

I'm sorry folks, I don't really lurk around the last two forums as much I spend time on the others so I can't really give much review on them but I've heard much great and not so great reviews from those I know so I guess it's for you to see it yourself.

Blogs to Read and Learn About the Stock Market

1. Miko Sayo the Tsupitero - tsupitero is a Filipino slang for someone who swing traders or invests in short term. I love his style of updating his readers as he would mention particular stocks he like and why. Miko is a Certified Financial Technician (CFTe) and Technical Analyst.

2. Absolute Traders - We Take the Gambling out of Trading. That's absolute trading. Fearless. The company provides various services that educates their students with the necessary skills and techniques to be successful in the financial markets – whether it be stocks, options, commodities, or currencies. I guess Ron Acoba was once an Absolute Traders student too. 

3. Traders Delight - It is a community of stock market investors, traders, hobbyists, enthusiasts, self-learners and just about anyone that are interested in the glorious stock market. Anything goes baby, fearless forecasts, updates, rumors, etc. 

4. Thoughts of a Novice Trader - Maintained by Christina Hunt along with her colleagues, their random musing about specific stocks are fun to read. I like just how laid back their updates are. You sure would have a fun time reading their daily updates.

5. High Heeled Traders - While the stock market may be mainly dominated by men, they can't have all the fun, can they? Ms. Charmel Delos Reyes has a fun and fabulous approach to trading by likening it to shopping. She has this contagious enthusiasm towards trading and has actually dedicated several posts to help inspire more newbies, or newbabes as she call it. No silly charts, no jargon-rich posts. Just plain awesomeness to help newbies and women in particular to appreciate trading and get started. I would really recommend her Women are Natural Traders and Girl Power Trading sections. Be amazed by her passion for both trading and fashion by getting to know her more through this interview

6. Cliff the Investor - The only blog with no About Me as there's no need for one. He's determined to keep his identity cloaked. From being the Pinoy Swing Trader, Cliff has turned into an investor (for long term to be exact). Among all the blogs that I mentioned, he is the only person that is brave enough to show his portfolio and support his "claims" with well, his portfolio. The daily quotes on every post are pretty much spot on with regards to every point he's like to stress. Just like Gus Cusio's blog, Cliff's blog is every trader's tambayan. Not exactly as a haven but he's probably the most controversial investor-blogger ever. Having had the chance to talk with him on Facebook chat, beyond those portfolio and posts is a person that knows technical analysis and could truly support his "claims", it's just that sometimes people would easily get irritated with someone who seems to "know-it-all" or as his critics would put it, "he seems smarter than he actually is". Despite all that, I think Cliff is indeed a good investor, if not a good trader.

7. PSe Buzz - Direct links to the latest news and press releases of various companies listed in the PSe. Also, sometimes they would post news directly from the "grapevine" so go ahead and check them out!

8. Rich Money Habit - Allan focuses on the habits and attitude that drives one into investing. He chronicles his journey and habits that he has acquired through investing in various types of investment. He's pretty approachable as he was one of the first stock market investor friends I had. I had a notion that people who are into investing are aloof and won't share their wealth of knowledge but Allan proved me wrong. People who are into investing are actually eager to teach the newbies as they understand the path they've been through.

9. Stock Market Investing by D’ Intelligent Investor, Zigfred Diaz, is the most comprehensive, insightful and fully dedicated blog and the great place for newbies to start your investing journey with. The posts are well detailed and easy to understand especially for those who have no prior knowledge with the terms and methodologies in investing.

10. Gus Cosio says so - Maintained by a seasoned investor and analyst, his blog is probably every investor and traders tambayan as aside from those mentioned forums on Facebook, his blog is a place where lots of people are leaving comments, asking questions about specific stocks and he is kind enough give his insightful thought on them. A well respected person in his trade, his blog is a must read.

What about you, what particular blogs have helped you in your journey to investing in the stock market? Feel free to share the links below so other newbies could learn from them too :)

So you want to learn and earn in the stock market? You bet! Caveat! (oh that means, as baby James puts it, "Mommy, be careful) ;-) 


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14 comments:

Liz said...

Nice one sis. Thanks for sharing. I'm with Citisec. :)

- Liz of Make More Money Online

:)

richmoneyhabits said...

Great stuff Jonha! Full of useful information about investing in stocks. I'm book marking this article so I can refer to it again. Thanks for sharing! More power! :-)

Lahingpinoyako said...

That's good info Jonha...

isp101 said...

I'm gonna get back to this page, I'd like to know more about investing in stock market online. Tnx for sharing! =)

Allan @ Rich Money Habits said...

Great article Jonha! This is a very nice newbie guide to investing in the Philippines Stock Market. I'm sure this will help a lot of beginning investors. Thanks also for the mention, I appreciate it! More power to you!

invest in the stock market said...

I want to invest in stock market and I am very confused that how to invest in stock market. I am here want to get information that how to play stock market and profit from it.

daleanastacio@yahoo.com said...

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Gian Faye said...

Just everything I need to get started.

Anonymous said...

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Anonymous said...

Just what I am looking for... thank you....

Jayson said...

Thank you very much for the links :) I'm planning to open a citisec account this year :)

Sage Cincaid said...

This is a great article for those that are on the fence about whether or not to get involved in investing. I like the point that you made about how the conscious decision to begin investing, doubles as a conscious decision to not want to have to work for others for the rest of your life. I have a penny stock newsletter group at Penny Stock Dream, where I too have periodic blog updates, professing the importance of not being afraid to begin those initial steps into investing because it really does make a huge difference when you finally do immerse yourself into the markets.
Great article all around! I'm definitely going to have to keep up with this site.

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Anonymous said...

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Thank you and God Bless!