What are stocks?
Stocks are shares of ownership in a corporation. The stock market is a place where stocks are bought and sold. The Philippine Stock Exchange (PSE) is the corporation that governs our local stock market. People buy or invest in stocks to benefit from a company's tremendous value potential over time.
Once you buy or invest into a stock you now become part owner or a shareholder of that particular corporation.
How to make money in stocks?
As a Shareholder, you can now participate in the company's growth and success through stock Price Appreciation and by earnings Dividends.
Capital or price appreciation is an increase in the market price of your stock over time brought about by an increase in its potential value and the demand to buy its shares. The faster a company can grow, the faster its price can appreciate.
Profitable corporations can also issue dividends, whether in cash or in additional shares of stock as a means for shareholders to share in their distributed profits.
Why Invest in the Stock Market?
History has proven that investing in quality stocks can provide greater returns than most investment instruments. This offers you the best chance in achieving your financial goals and gives you the ability to later enjoy the benefits of your money working for you.
The track record of the stock market also shows that a good basket of stocks climb more often than decline - reducing risk over the long-term.
The 4 Golden Rules
Discipline and the right methodology is the key to a successful stock investment program. Understand and adopt these four essential rules of thumb to keep you on track.
- Invest EARLY
- Invest REGULARLY
- Invest LONG TERM
- Invest using DIVERSIFICATION
Invest EARLY
Invest early to take advantage of compounding over a greater period of time.
If I invest Php 25,000 at the age of 25 and I manage to have my investment grow by 8% a year, 40 years later my investment will be worth Php 543,000.
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