Do you want to start investing in the stock market but you don’t know how and where to start? Don’t you worry, this guide is for you. But before anything else, let me share with you my story on how I was able to get in touch with the Philippine Stock Market.

When I was still on my college days, I kept hearing investments like the stock market and mutual funds. I kept hearing those investments even during my review days for the board exam. That time, one of my review instructors claimed that his portfolio already has a million pesos in it. It was then that I told myself stock market investing is only for the rich people. So instead of learning more about it, I just shrugged off the idea that one day, I will become a stock market investor. It’s pretty cool to call myself as an investor, but no, I am not rich, I barely even had a hundred peso in my wallet that time.

It was until last year, during my first months of working in a corporate field, when I saw one of my workmates checking his stock market portfolio. This time, I became very intrigued. I asked whereabouts on how he managed to enter in that kind of investment. I even remember asking him every second on how his portfolio was going. How much are your gains? What about your losses? What companies did you buy? I honestly think he found me importunate that time, but I am glad he didn’t.

Since then, I started having an in-depth research about the stock market. I read books, engaged in online discussions, and watched youtube videos to learn more about the Philippine stock market. Through time, I learned that there are three ways to invest in stock market.

Online Brokerage Firms

Ages ago, the way of investing in stock market is through a traditional account where a broker will do the buying and selling of stocks for you. It will only take one phone call to execute the trading of your favorite stocks.

At the present time where the advancement of the technology is at the optimum level, you can already do all the transactions by yourself through an online trading account. You just need a computer or a smart phone, an online trading account, an internet connection, a bank account, and of course, the necessary capital, then Viola! You’re all set!

_{Trading Charges for online brokers: | .25% on the total gross sales and purchase of shares of stocks | 12% VAT | 0.005% Transactions fee | 0.01% SCCP fee |}

Here are some of the most recommended online stock brokers in the Philippines. I just picked the ones with the lowest capital to start with. Currently, I am using COL Financial with an initial investment of P5,000 (100 USD). I used that to buy my first bluechip stocks. I can also top up my investments with a minimum of P1,000 (20 USD). When it comes to security, you don’t have to worry about your investments for online trading accounts are secured through SSL and TSL certificates which are also used by major banks.

Mutual Funds

If you think buying and selling stocks is very easy, then you are wrong. The return on investments in stock market investing may be high, but the risks involved are also high. There are so many factors to consider before picking the right stocks considering the trading golden rule “Buy high, Sell low”. Simply put, you have to closely monitor your stocks in order to maximize your gains.

If you don’t have the ample time to study the stock market but you still want to invest in it, then investing in mutual funds may be suited for you. Experienced financial advisers usually encourage newbies to invest in mutual funds rather than directly doing the buying and selling of stocks, especially if you have a limited amount allocation for investments.

Basically this is how mutual funds work. Investors pool in their money and entrust the total accumulated amount to a fund manager, who is an experienced stock market investor. The pooled capital from different investors will then be used to buy the top established companies in the overall stock market. Afterwards, the returns being generated will be passed back to the investors depending on the proceeds of the invested stocks or securities.

_{There are different types of mutual funds depending on Composition (where the money is invested), Horizon (the duration of investment), Objective (the reason why you are investing), and Risk Type (*the type of investor you are). The return on investments depends on the risk level; the more aggressive you are, the greater the possibility of returns.}

Here in the Philippines, there are Mutual Fund companies that could cater your investment needs such as Sun Life, FAMI (First Metro Asset Management Inc), and COL Financial. With as low as P5,000 of initial investment and P1,000 per top up, you can already invest in mutual funds.

As of this moment, I am using my COL Financial account to invest in mutual funds. I really find it convenient since I can do both buying and selling of stocks and investing in mutual funds in one online broker account.

UITF (Unit Investment Trust Fund)

This is basically the same as Mutual Funds. UITF is also a pooled fund investment, but the major difference is UITFs are offered by banks while Mutual Funds are offered by asset corporations. Almost all banks offer UITF investments, so as long as you have a bank account, you can always start investing in UITFs with a minimum investment of P10,000.

Here are the other differences between Mutual Funds and UITFs. Though they have almost the same concept of pooled investments, most people prefer investing in UITFs due to the convenience of executing transactions. Having an online-banking account is also an advantage for you to see the current value of your UITF investments.

So there, I hope you find this article informative enough for you to start investing in the stock market. In my next posts, I will tackle more on the technical aspects including how to earn, how to signup with an online broker account, and how to do the basic buying and selling of stocks.

If you have questions regarding this article, and if you wish to know more about a certain investment or financial topic, kindly drop it below. ‘Til next time!

GIF and Photo Sources:
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