People love having lots of money, that’s a fact. Money is needed for various expenditures in our lives but often enough it is not being utilized or for a better word, invested properly. Truth is, we Filipinos spend more than we earn. I know how hard it is to cut out materialistic things or experiences, but acknowledging the excess money we spend on vices, and realizing their growth potential for the future is the first step in being responsible with money.
One way to start saving money is to invest it in the Philippine Stock Market. In this guide I will show you the basics in stock market investments, how stocks and the stock market work help make you money, as well the things you will you need to remember before venturing into these kinds of financial investment.
What are Stocks and How Can I Make Money Through it?
Put simply, stocks are the shares of ownership of a company, which makes you part owner of that company and right to the company’s future profits. The stock market is the market where stocks are traded, bought, or sold. People invest their money through the publicly-listed companies in the Philippine Stock Exchange, Inc. (PSE).
You make money through the dividends declared by the company either through cash dividends (earnings for each share of the company) or stock dividends (additional shares given to shareholders at no cost). Buying stocks at a low market price and selling them at a higher price is the usual safe strategy when making stock transactions.
Keeping up with the market is no simple feat, however, there exists multiple groups of people knowledgeable about the stock market. Having a stockbroker can guide you to making sound financial investments.
Listed below are some of the most popular brokers online that are PSE-accredited, approved, and verified:
|Stockbroker||Website||Minimum Deposit Required|
|AB Capital Online||www.abcapitalsecurities.com.ph||₱10,000.00|
|APS Online||www.apsecinc.com||₱5,000.00 – ₱10,000.00|
|BPI Trade||www.bpitrade.com||BPI Account Required|
|First Metro Sec||www.firstmetrosec.com.ph||₱5,000.00|
Requirements for the Philippine Stock Exchange (PSE)
Before starting, I advise that you prepare the following:
- At least ₱5,000 – for opening a trading account in the Philippine Stock Exchange
- Two (2) Valid Identification – for trading account and Customer Account Information Form (CAIF)
- Specimen signature cards – for CAIF
- Proof of billing (Some brokers don’t ask for this anymore) – for CAIF
Once you have all of the requirements above, investing in the stock market is easy.
- Pick the stockbroker of your choosing via the PSE Stockbroker Directory
- Open a trading account with your stockbroker
- Transact via online or call your stockbroker
- Monitor and track your flow of investment
Once you’ve started trading stocks, it is important to take note of the fees and charges as they will affect how much of the retun you will receive. As far as I know, there is no uniform fee for each broker as they all have differenct calculations. Expect these charges as you make stock tradings and transactions:
|Philippine Stock Exchange – Fees|
|Broker’s Commission – Max Fee of 1.5% of Transaction Amount or ₱20 (Whichever is higher); Includes the 12% VAT|
|PSE Transaction Fee – 0.0005% of Gross Trade Transaction Amount|
|Securities Clearing Corporation of the Philippines (SCCP) – Facilitation fee of stock transactions; 0.01% of transaction amount|
|Sales Tax – 0.5% of Gross Sales Amount (Only applicable when selling your stocks)|
I’m sure most of you would agree that any excess money we have laying around is better used for saving or investment. I assure you, you will thank yourself for investing early and securing a finances for your future.
If you have further questions about stock investments, stock markets, and the Philippine Stock Exchange, you don’t need to worry. Lucky for us, the PSE has its own website dedicated to would-be stock investors that includes e-learning tutorials, financial tools, and a Frequently Asked Questions (FAQ) section. I recommend this to beginners who are passionate and determined to learning more about smart money investment through stock trading!
Do you have any other tips that I missed? Feel free to share it in the comment section