Near the end of 2017, the PSEi (Philippine Stock Exchange Index) rallied to New Highs as it broke past 8500 levels and went as high as 8900 in the first week of trading for 2018. Many stock market investors and traders, myself included were jubilant to say the least after learning that the market has finally broken through the 8500 levels after going sideways for quite some time.
Years ago, before I learned about the stock market I have often read about the PSEi in the Business Section of major newspapers back in the Philippines, but never really understood what it was about or how an ordinary person like me could benefit from the economy or these “highs” that columnists would rave about in their articles. I was one of the many Juans who believed that only those with really deep pockets, and people like the Ayalas and people like Henry Sy can benefit from the stock market. Many years later, I learned that nothing could be further truth.
So what exactly does it mean when the Philippine Stock Exchange Index reaches new highs? This simply means that investors have a very optimistic view of the country’s economy, thereby resulting in more investments pouring in. Share prices of major corporations listed in the stock market go up because more people want to take part in the company’s growth as it rides the momentum of the country’s growing economy.
How can a working class person like you and me benefit from all this? Simple! By investing in the Philippine Stock Market! Instead of spending most of your money, Invest it! You too want to benefit from the economic growth just like the rich people do right? Then do what the rich people do. Understand that the money you earn from working should be used to increase your capital and net-worth, instead of just spending it on things that will not increase in value. INVEST! Take part in the growth of the leading corporations by investing in them. Instead of spending all your hard-earned money by going to the mall, shopping and dining out, why not open a Stock Market Trading account and buy shares of companies like Ayala Land Inc. (ALI), or SM Prime Holdings (SMPH), for example. These two major mall developers and owners have share prices of less than PHP 50/share as of this writing. If you invest you money by buying shares of their company, your money grows as their share prices go up, and you earn money when their companies earn more money.
If you look at the historical stock prices of both companies below, you’ll see that their stock prices have nearly doubled since 2014. This means that if you bought shares of their companies 4 years ago, the money you invested should have nearly doubled in value by now!
*ALI’s lowest price was 24.75/share at the beginning of 2014
Current Stock Price for ALI: PHP 44.35/Share (as of this writing)
*SMPH’s lowest price was at 14/68 at the beginning of 2014
Current Stock Price for SMPH: PHP 38.50/share (as of this writing)
A lot of people are not yet investing in the stock market. As a matter of fact, less than 10% of the Philippine population is invested in Stocks or Index Funds, or any other investments. This is mainly due to a lot of common misconceptions and fears about investing.
It’s a common misconception back then, and even now for a lot of people that the Stock Market is only for the rich. Back then, people thought that if you put money in the Stock Market you will LOSE, and your money sleeps. As a result, most Filipinos put their money in the bank where it earns a measly .25% – .375% annually, or 2% for Time Deposits and other SDA, while the PSEi has grown by over 50% over the last 5 years. Did you know that you can actually open a Stock Market Investing/Trading account for as low as PHP 5000? If you are able to open an account for PHP 5000, and then save and invest at least PHP 1000-2000 a month in the stock market, you can actually make a lot of money if you invest your money in good companies, and stay invested for years.
Question: But isn’t the Stock Market risky?
Answer: Yes, it is. Investing in the Stock Market is highly risky, but at the same time the rewards are very high as well, especially for those who are in it for the long term. Investing in stocks is very risky, BUT as long as you are putting your money in the right companies, and you have a good understanding of what you’re doing then you should do just fine.
Learning how to invest and trade in the stock market isn’t rocket science. It doesn’t even require you to have a degree in Finance, or some other Business related courses. You can learn how to trade and invest within a week! I first started out by watching youtube videos and reading blog posts. I even joined groups in Facebook, and read articles and posts in social media about the hottest stock picks of the week, or day. From the things I learned on my own about trading and investing, I managed to have small wins and gains, but also lost a lot of money in the process. My peers and I jokingly referred to our losses as “Tuition Fee” or “Learning Fee”. It wasn’t until after I enrolled in Marvin Germo’s Stock Smarts that I began to really have a deeper and better understanding of the Stock Market. I learned how to evaluate if a company is doing good or bad through Fundamental Analysis, and how to determine a good entry and exit point using Technical Analysis. I was able to develop better trading strategies which resulted to lesser losses, and more gains for my stock market investment.
If you’re in the UAE and you want to learn more about how you too can make your money grow in the stock market, register now and learn from Mr. Stock Smarts himself, Marvin Germo this February 9-12 at the Hyatt Place Hotel in Al Rigga, Dubai.
If you’re interested to know more and register, click here.