Investing In Philippine Stocks
What is a stock? Basically, it is the share of a public company traded in a stock exchange or stock market
. In the Philippines, there is only one stock exchange, the Philippine Stocks Exchange. Each country has its own stock exchange where stocks or shares of public companies are traded. You cannot buy or sell directly in stock exchange, you need to have a stock broker who will buy and sell stock instead of you.
I encountered the word "stock" six years ago when I worked in a manufacturing firm in the Philippines. It was given to me by the company because it is one of the benefits for all the employees. The number of shares given depends on the job position. That stock benefit is really a big help for me and my family in terms of our financial needs in that time.
Stock investment can be one source of income provided you have thorough knowledge, discipline and patience in its operation. It is also a good note that you can only loose money in investing in stocks in only two events: when you buy and sell it.
Investing in stocks is a good investment because it will give higher profit in the long term compared to other investment instruments available today. When you invest in stocks for the long term, you will invest in well performing stocks called blue chips for more than 5 years.
In the Philippines, blue chips are stocks of multi-national companies that are basis of the performance of the stock market. Based on the data of BSP and PSE from 1989 to 2009, blue chips or stocks included in PSE composite index gave a 14% annual average return.
Moreover, for the last 20 years, investing in stocks gives you higher average annual total returns compared to Treasury bills (T-Bills) and savings account with 11.0% and 2.3% average annual total returns, respectively.
In conclusion, stock investing for the long term is the best way to have a higher return for the money you invested.
by: Gily Tenorio
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