How to-invest-in-the-philippine-market-for-newbies 1-

Stockmmarketphilipppines.comm.ph

Stockmarketphilippines.com.ph
For Employees, OFWs, and Hard Working Filipino

Introduction
Why only less than 1% of Filipino invest in Stock Market?
“It’s not the investment that is risky… It’s the investor”
– From “Who Took my Money?”
by Robert Kiyosaki
History shows that investing in quality stocks can help you grow
your money in time. Through compounding interest, one can retire a
millionaire even if you only have 500 to 1,000 a month to invest.
Despite the opportunity to grow money through investing, the
Philippines Stocks Exchange Commission (PSEC) reported that very
few Pinoys invest stocks. Many Filipinos were never taught how to invest
and grow money. Many of us were raised and trained to be a competent
employee. We are only taught to work in exchange of money; but, only a
few have the idea that money can also work for us. While 99% of
Americans do have mutual funds and equity investment, a whopping
0.5% of Filipinos grow their money on stocks.

Expert financial advisers explained that there are different reasons
why many Pinoys don’t want to put their money in stocks: culture, fear,
ignorance.
First, Filipino had a rich culture. But, it is so rich that many forgot to
save for their retirement. This is why you see OFW families spend
luxuriously on gadgets, travels, and other unnecessary expenses. This is
why people ask money from Bombay just to celebrate fiestas, birthdays,
christening, and all other occasions. But, when retirement comes,
statistics said that out of 100 Filipinos aged 65, 45 are dependent on
their family for support, 30 are dependent on charity, 22 cannot retire
and only 2 are financially independent.
Second, many Pinoys are afraid to put their money. The safest
place they knew aside from a piggy bank is to put their money in banks.
Banks are great, but, the interest of our money in banks is always below
the inflation rate.
Third, Pinoys do not have enough financial literacy. They play hide
and seek with financial advisers. Most skip the business or financial
page of newspapers and jump on showbiz news. Many can also read a
thick novel book but cannot spend a minute to read financial books.
They can go and spend money on movies, but never on financial
seminars. Investing in the stock market requires some studying before

anyone places money on it. This is why; many are crippled by fear of
losing money in stocks. They just don’t know how and do not bother to
know how.
If you are reading this book, I congratulate you. My goal is to help
you open the door for a better financial path. This book is for Pinoys who
wanted to turn their finances around. My aim is to teach you in the
simplest way, the basics of the stock market. If you are new to the stock
market or never read a book about it, I suggest that you read the book
cover-to-cover for three times or more before investing. If you are
already reading books and attending seminars, you can just browse and
enjoy the additional information that you can get.
My goal is that, after reading this E-book, you can start growing
your money and enjoy the profits soon!
- Micheal John

Lessons Learned:
My Stock Market Journey
Before I wrote this book; I also dream to achieve financial freedom.
I started trading in the stock market on 2008 (during the Global Crisis
time). Those days, the stock market is on a great crash which makes it a
very traumatic experience for me. Until today, I can’t imagine how I
endure the financial as well as emotional and psychological effect of
investing.
The awful feeling of investing my hard-earned money today and
burning it tomorrow is unforgettable. But, because of these losses, I
realized that I need to equip myself with knowledge. I am guilty, I skip
the learning part. I thought that the stock market is just about money and
intuition. It cost me thousands of peso before I figure out one thing: I
need to study first. I tried to visit different websites and read some
books. I felt overwhelmed with different financial jargons; I do want to
give up.

One day, I as browsing some books and stumble upon with Bo
Sanchez “The Turtle Always Wins”. I felt like it was intentionally written
for me. I will never forget when the author mentioned “Hot Tips from his
Uncle” on page 54. I felt like: “Is Bo talking to me? This is me! This is
really me!” Back those days, I can earn 20%-50% within the day but lose
it all in a bad trade. Back then, I’m so arrogant because I’m telling myself
always that I can get it back. I average down and average down and
average down until to the point that I put ALL my money into it. I’m still
stuck with that company. It’s way too deep to cut loss. I think I’ll just give
it to my children as inheritance maybe by that time the company would
be earning.
So I thank God for using Bo Sanchez to speak to me and make me
realize that there is a SAFE & SURE WAY of reaching my Financial
Freedom through The Truly Rich Club website. It really is a big help for
me and now I am not worried of my Stock Position anymore because I’m
buying Giant Companies which Bo Sanchez recommends.

Contents
I. Getting Started: Learning the Basics
- What is Stock Market?
II. Why You Should Invest in the Stock Market?
III. How Can You Grow Money in Stock Market?
IV. Making Money: What Are the Action Steps You Should Take?
V. What are the Requirements to Open Account?
VI. What Stocks You Should Buy (and How to Know What)

Getting Started: Learning the Basics
What is Stock Market?
The stock market is a place where you can buy and sell shares of
stock of a publicly listed company. But before we tackle that, let us first
define what stocks are. Stock is also known as shares or equity. When
you hear the word shares, a share of stocks, equity, or stocks- it simply
represents ownership of a company. To make you understand it more,
let us tackle it this way:
For example, Ben wanted to start a cotton candy business. He
needs 1000 pesos capital but, he only had 500 pesos. So, he asked Jay
to be his partner and share 500. This means Jay own 50% share of
Ben’s cotton candy business. After a year of running the business, the
cotton candy company earned 50,000 pesos. Since Jay owned 50%
share, he gained 25,000 pesos from the profit.
Big companies allowed small investors (like you and me), to own a
little portion of their stocks. They will let you earn like how Jay earned by
owning a “share” on Ben’s cotton candy business.

What is stock market then?
First, it is a PLACE. You can visit a place called the Philippine
Stock Exchange or (PSE). One office is located in Ortigas and the other
one in Makati.
Second, it is a BUY and SELL Market. Stock Market is a place to
buy and sell “company ownership” or “stocks”. There are selected and
licensed Trading Participants or Brokers who can directly buy and sell
shares. Individual investors need to transact with Brokers to invest in
stocks.
Third, it is a choice of PUBLICLY- LISTED COMPANY.
Companies who wanted to join the PSE public listing must first pass the
standards. There are giant companies who offer its shares to the public
to finance corporation expansion. You can see these companies to
PSE’s Public Listings.

Why You Should Invest
in Stock Market?
Only 15% of people in the stock market make money from stocks- 85%
loses it. So, why you should bother to learn how to invest money through
stock market investing? There are many reasons why:
1. Make your money work for you
Your money doesn’t need a day off. It doesn’t get sick, nor
complain. You can make your money work day and night for you. But, it
will only happen if you know how. Money can be your enemy or your
best friend. How money behaves depends on your ability to handle it.
Even if there are certain risks of losing your money’s value in stocks; it is
still considered as one of the best instruments to profit passively.
For example, if you invested in funds like UITF or a mutual fund,
your average yield will be 10% or more. This is higher than when you
just save money in the bank or hold your money through time deposits.
This is true especially if you are looking for long term investments. Even
if the stock market crashes within the next 10 years; you can still gain
the generous interest of your money through this machine.

2. Fight inflation rate
“ Nung panahon ni Marcos, yung piso, makakabili na ng bigas,
ulam, at me dessert pa! Ngayon, wala nang mararating ang piso!”
Do you wonder why money’s value shrinks every year? There is
an invisible villain unknown to many Filipinos. This culprit is called
“Inflation Rate”. Inflation pertains to a general increase of prices year
after year. Dry goods, gasoline, electric bill, water bill, tuition fee,
transportation- nothing, and no one is exempted.
Parents from 60s and 70s often said that they can survive the day
with 1 peso. But today, we can barely survive with 100 pesos for one
day.
In the next 10 to 20 years, things will happen the same way. The
things that peso can buy will decrease. Your 1,000 pesos today might
only equivalent to 100 pesos in the near future.
Inflation will eat you alive. But, not when you know how to prepare
for it. The stock market is a great tool to grow your money more than the
inflation rate. Economic experts said that the average inflation rate is
between 3 to 6% per annum. This means that Bank interest of 1 to 3% is
not a great tool to use. When you invest your money in stocks for 10

years or more; your money can yield up to 10% per annum or more. Not
bad isn’t it?
3. It outperforms all other asset class
There many other ways to make your money grow. You can start a
business; invest in real estate and other assets. The problem here is that
you need a huge amount of money to start in real estate and it takes
time to have a profitable business. In the long run, investing in stocks
can outperform all other assets. You don’t need to pay for employees or
caretaker month by month. And, you are sure that your money machine
works for you day and night.

How Can You Grow Money in
Stock Market?
As we mentioned earlier, investing in stocks is like owning a portion of a
company and corporation. Because you lend money in these
companies, there are two ways on how it will pay you:
1. Capital Appreciation (Buy Low and Sell High)
As the term implies, one of the ways to make money in stocks is to
buy shares in a lower price and sell it when the price is higher. For
example, say you purchase equity for 10 pesos. The company pays a
dividend of a 1 peso per share each year. This year, the company’s
income grows and they are now trading at 15 pesos per share. Since
you invested 10 pesos, your capital appreciation in the investment is 5
pesos or 50%.
2. Dividends
Earning from dividends is what the company will give you as their
investor. For example, a company declared that shareholders were to
receive 1 peso per share, and you have 2, 345 shares; your earning will
be 2, 345 too.

Making Money: What Are the Action
Steps You Should Take?
Making real money in the stocks (in a safe and sure way) is a boring
process. Yes, it is too simple and too boring. These are the practical
steps that you can follow:
1. Protect yourself first.
Investing money in stocks is like planting a seed today- you don’t
expect it to give you fruits instantly. You have to give it ample time to
grow, bloom flowers before you enjoy the fruits. The kind of money that
you should put in the stock market is money that you won’t be needing
today, next month, next year, or even 5 to 10 years from now.
The worst enemy in investing is when the circumstances forced
you to use your money that you invested in stocks. You should only put
the money that you are willing to forget in the next 10 years. In order to
prevent this problem, it is advisable to have an emergency fund and
health insurance.
Emergency funds are funds that you will only use for “emergency”.
To compute for your ideal emergency fund, you can use this formula:

Emergency Fund (EF) = Monthly Budget (MB) x 3
For example, if you need at least 10,000 pesos a month to buy
foods and pay all your bills, you should have at least 30,000 pesos worth
of emergency fund. You can tap this money when you suddenly lose
your job. But, beware: Purchasing buy 1 take 1 branded cloth is not an
emergency. 50% sale iPhone is not an emergency too.
Health insurance is also a basic necessity if you want to protect
your stock market investment. One of the most common causes of
withdrawing money in stocks is when you or one of your family members
gets sick. It is advisable to have a health insurance aside from the
Government’s health insurance offer.
2. Save 10% (or more) of your income every month
One of the simple tricks that you can do to develop your saving
habit is to set aside at least 10% of your income for investment. Whether
you have debts or your income is not enough; you need to always “pay
yourself” first. If you’re earning 10,000 net a month, you should save at
least 1,000 a month. This amount is enough to invest in a mutual fund
every month. If you will follow this habit in 10 or more years, it will give
you happy retirement days.
3. Do your research

For the record, 95% of the people who creates/join businesses
don't have the complete knowledge of the industry they are entering.
Many Filipinos lose their money on “quick money schemes.”
Never invest your money on things that you don’t understand.
Don’t be shy to ask. Be extra careful when investing your hard earned
money to any investment (even the stock market). You have the
responsibility to do your research. Read books about stocks, attend
financial seminars, seek for mentors, and ask for help from trusted
financial advisors.
Your money is your responsibility. Earning money through stocks
requires basic financial literacy. This is also one of the advantages when
you plan to grow your money in the stock market. It will force you to
learn not only of investing; you will be enlightened in proper money
management and how to spend wisely.
4. Look for stock broker
After doing liberal reading and research; you are now ready to do your
first investment. There are three basic ways on how you can put your
money in stocks:

a. Through a Mutual Fund (Equity Funds)
For first time investors, opening a mutual fund is the easiest to
start. You only need a minimum of 5,000 pesos to open a mutual fund
account.
A Mutual Fund is an investment where money is pooled from many
investors. The collected funds will be handled by a professional fund
manager. It is very convenient, and your task is to save month by month
just like what you are doing in the bank.
Check the lists of various Mutual Fund Companies here:
http://www.pifa.com.ph/factsfignavps.asp
b. Online Broker
Another convenient way to make money through stocks is by using
your internet. If you do have a stable internet connection and a personal
computer; it will be very easy for you to buy and sell stocks and even
manage your stock portfolio. Because you don’t have to pay a live
financial broker, you can also start with P5, 000. You can download the
forms from the broker’s website, fill up the forms, and follow the
website’s instructions. You can also use online banking to fund your
portfolio.

Check the lists of online brokers here:
http://www.pse.com.ph/stockMarket/tradingParticipants.html?tab=2
Source: Philippine Stock Exchange Website
www.pse.com.ph
c. Live Broker
If you want to get personal financial advice and you know that you
have a liberal budget to start investing, you might want to work with a
live broker. A licensed stock broker can give you professional investment
guides depending on your personal goals. There are people who invest
their money to prepare for wedding celebration, enjoy a cruise, travel, or
prepare for their children’s education. A live broker can make a plan,
according to your timeline and risk tolerance.
You can also assign some brokers to manage your portfolio for
you. But, this service may cost you an additional service fee.
Click here to get a full list of available brokers.
Click here to get the rankings of brokers.
Source: Philippine Stock Exchange Website

What are the requirements to open
an account?
The things that you may need will depend on the company and brokers
that you wanted to work with. As for example, here are some of the
requirements to open an account with COL Financials:
For FILIPINO CITIZENS:
Photocopy of one (1) valid government issued ID
Photo and signature must be clear
Billing Statement - Recent, no later than 3 months past
For RESIDENT FOREIGN CITIZENS:
Photocopy of one (1) valid government issued ID
Alien Certificate of Registration (ACR)
or Work Permit from DOLE

For NON-RESIDENT FOREIGN CITIZENS:
Authentication of a photocopy of one (1) valid passport
Proof of Income
For IN-TRUST-FOR (ITF) ACCOUNTS:
Photocopy of one (1) valid government issued ID of the parent
Birth Certificate of the minor applicant
Duly-signed ITF Supplementary Agreement
Note:
There are also downloadable forms that you need to fill up and send
together with the requirements to their office.
To fund your account, you will need to have a bank account on
recommended banks.
Click Here for More Details

Choose Your Investment Plan
Before choosing an investment plan, there are several things that you
should consider. First, you must be clear about your GOAL. Why are you
investing your money? Is it for your retirement? Do you want to buy a
car? Are you getting married three years from now?
Next, you should decide for HOW LONG are you planning to invest
your money. Or, should we say, WHEN do you plan to use this money.
Once you have a clear money goal and specific time frame, it will be
easier for you to choose your investment plan:
Buy and Hold (Passive Strategy)
A Buy and Hold approach is a stock market investment plan that is
great for long term investors. In this strategy, the investor will buy shares
and holds it for a long period of time (5 to 10 years or more). He will just
let the money remain on stocks regardless of the fluctuations in the
market.

This investment is great if you have a bigger budget of 50,000 pesos or
more. Instead of putting it on time deposits, you can invest it on the
stock market and enjoy higher yield.
Market Timing (Active Strategy)
The active strategy is also known as stock trading. Unlike the
passive strategy, market timing needs more time and technical skills. If
one is new in the stocks, this strategy is not recommended. But, if you
need a vehicle which can double your money value in a week; this
approach is maybe for you. I said, “maybe” because many people have
lost money in market trading. This is painful but true.
People who use these tactics are called traders rather than
investors. They are to watch the ups and downs of the market. They can
double or triple the money in a very short period of time; they can also
lose it in a snap. This is the reason why others perceive stock market
investment as gambling.
There are two types of trading:
Technical Analysis
If you love history, then you might love using this strategy too. As
old cliché said: history repeats itself; so is in this strategy. In technical

analysis, the trader uses a technique to estimate the future value of a
stock by reviewing historical price charts and patterns.
The major assumption of technical analysis says that by studying
the stock price alone, you can determine the future value of a particular
stock.
It may look simple, but in reality, it is not. You need more than reading
books or reading free articles. If you wanted to explore more of using
technical analysis; I suggest that you invest on a formal training or
seminar.
COL financial offers a two-session seminar where each session going
for at least 4 hours.
Fundamental Analysis
In contrast with technical analysis, the fundamental analysis does
not only focus on the history and present amount of stocks. It estimates
the possible stock value by looking onunderlying factors that can affect a
company’s business and its future prospects.
Using this approach is more specific and needs a lot of training
and skills upgrading.
These are some of the sample questions that you are to ask:

- Which region is growing?
- Which countries in this region have the highest potential for growth?
- What industries in this country can have growth?
- What are the leading companies in this industry?
Again, don’t have to feel overwhelmed upon reading this. You
don’t have to learn how to trade before you start investing. There are
other approaches that don’t require you to be too technical.
Peso- Cost Averaging
Peso cost averaging is almost similar to Buy and Hold strategy.
But, unlike the latter strategy, it requires more discipline. In this
approach, you are to invest fixed amount of money in giant companies at
fixed intervals regardless of its price.
This strategy is great for minimum earners or investors who don’t
have a big amount of cash but with huge discipline. This strategy is very
safe, simple and effective. This is perfect for beginners too.

What Stocks You Should Buy
(and How to Know What)
Investing in the stock market needs more reading and studying. I
suggest you to visit these two references:
COL Financial
COL Financial is formerly known as Citiseconline. The website allows
you to take a quick glimpse about stock market investing. There are
available investment guide choices. You can also check their products
and services, advisory services, and frequently asked questions. COL
Financials do have free live seminars, downloadable forms, and other
reading materials to help you decide and learn.
Truly Rich Club
The Truly Rich Club (TRC) is a membership site that teaches
Pinoys how to have an abundant life. It will not only make you rich
financially, but it also teaches people to cultivate each and every area of
life. The TRC will guide you step by step on how to be rich and have a
fruitful retirement too. Upon visiting the website, you can enjoy watching

Bro. Bo Sanchez video. It will explain more what the club is all about and
how it might change your life too.

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