Philippine Stock Exchange
Why Filipinos should take risks trading in Philippine Stock Market
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Interestingly enough, the Philippine Stock Exchange (PSE) is the oldest operating major stock exchange in South East Asia. The PSE lets you buy or sell Philippine stocks. It has two trading floors in Pasig City (main) and another in Makati City. However, you don’t necessarily have to be present at the trading floors just to buy or sell stocks. That’s the job of brokers. So what are stocks?
A stock is actually a form of ownership on a company. It’s like getting a slice of a pizza where the slice is the stock and the pizza is the company (hope the analogy makes sense hehe). Imagine telling your friends that you’re a part owner of PLDT (stock symbol TEL). Cool huh. However, that’s not really why you buy or sell stocks. So why get involved with it?
Stocks have been known as a good vehicle of investment. Better than most investments even. It has lots of historical data proving that it is very profitable (once you get the hang of it). Buy at a low price and sell at a high price is the common strategy of traders.
Let’s compare it to the usual investments Filipinos make and their interest rate:
- Savings Account – about 1% per annum
- Time Deposit – about 3% per annum
- Stock Trading – can be 3% on a day, 10% on a week, or even 100% in a year (it varies)
Isn’t that great! However before you celebrate, keep in mind that higher gains always mean higher risk. The difference between Savings Accounts / Time Deposits and Stock Trading is that the latter can lose you money. That is why you have to calculate your risk, and diversify your investments. Stock trading can be fun at the same time profitable (if you just keep on reading).
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4 comments for “Why Filipinos should take risks trading in Philippine Stock Market”
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Cant wait for the next article to come out soon.=)
Yes you are right. The higher the return of investment, the higher the risk of losing that investment if you fail. Investing in equities can be profitable and can also become fun. There are already lot of prominent people who have become so wealthy in stock investments. Thanks for the information, it keeps me more excited of the equity trading.
Vic´s last blog ..Overtime pay laws and computation in the Philippines
Yes, stock market investing can be very rewarding over the long term depending on how one uses it. It can also be quite risky in that there are only two directions the stock market can move, either up or down. You gain if you bought low and the market went up, but you can lose big if you bought high and the market went down. With the advent of stock options trading there are now various alternatives for the stock investor for controlling and managing risk in any market direction. The Philippines Stock Exchange should start looking at introducing stock options as other countries have done in recent years. Stock options offers an entirely new world of investment psossiblities to the stock investor.
Well you are right, it seems to be very tempting to join in the bandwagon but I need to fully equip myself first and I appreciate your posts regarding this especially for newbies.
Jonha @ Happiness´s last blog ..Look to God and Live 