Stock Market has a lot of potentials in earning if you really know how. Regardless of how much you want to earn and how much time you can dedicate to it, stock market has a lot to offer. For a more detailed information, see our article about The Basic Guide to Philippine Stock Market Investment.
Some of those who already know about Stock Market have not started yet because they feel intimidated about the process. Some feels it’s a little complicated simply because they don’t know the steps. To guide you, see below our step by step guide.
Step 1: Know what you are getting into.
When starting, don’t get too excited in the stock market. Do not put your life savings into it, or acquire a debt just to have money to invest. Stock trading is a skill that you have to master through time. Different people have different strategies and you have to learn yours. If you want to try out stock market without loosing actual money, you can sign up for virtual trading platforms to know more about stocks and at the same time, develop your skills for the real deal.
While stock market is a great way of earning money, it is also not guaranteed. You can lose your money instead of growing it. So before deciding to invest, research as much as you can on the subject. Decide if you are willing to risk your money. Stock market is a better option if you already have emergency savings and has spare money to invest.
Step 2: Find a stock Broker.
If you have already decided to invest in the stock market, you will need to find a stock broker. Stock brokers are individuals or institutions that are licensed in selling and buying stocks in the Philippine Stock Exchange (PSE). You cannot trade on your own in the PSE, you will not a broker to transact them for you.
There are two types of stock brokers: traditional brokers and online brokers.
Traditional brokers are individuals who can give you advice on the companies that you can invest in. They are reach through call, text or chat. If you are too busy with dealing stocks on your own and you don’t mind the fees that they are charging, then traditional brokers will work for you.
Online broker are usually institutions licensed to buy and sell stocks. You can choose among the 25 accredited online brokers. BPI Securities Corporation, COL Financial Group and many more are among this online brokers you can choose from. They have an online platform you can sign up to and perform transactions. They have much lower fees than the traditional brokers but they won’t be able to give you advice. This is more of a do-it-yourself transaction. This is also a much more difficult way of stock trading because no one will teach you how, when and where to invest.
Step 3: Open an account.
Once you have chosen which broker you will use, you will need to open an account with them. The most common requirements are the following:
- A filled up application form which will be provided to you by the broker
- Two valid government IDs
- Tax Identification Number (TIN)
There might be some additional requirements depending on the broker. After submitting, simply wait for your application to be approved before you can deposit your initial investment.
Step 4: Start trading.
Once you have funded your account, you can already start trading. Search through the company offers and study there trends. The cheapest stocks are not always the best options to start. They are usually riskier especially if they are new.
Stock trading takes time and effort. You need to spend more time analyzing the market, refining your strategy and you will probably lose some money at the start. You just have to practice more and take note of your strategies that work. The more you trade , the better you will understand what works for you.