THE STOCK MARKET

Group 5 | Math 2 WFU 2) Stock Market VS Bond Market

a) Stocks - shares of company ownership

b) Bonds - debt securities or fixed-income
I. STOCK MARKET BASICS (PART 1)
securities (conservative investment)
1) Why should you invest?
3) How does the stock market work?
a) Your investment will have more time to grow
through compounding.
b) You let your money work on its own and can
eventually result in being financially secure.
a) The Philippine Stock Exchange (PSE)
c) It is easy to access, as we can now invest and
manage via the internet. monitors and screens companies who would
d) It will help you become more financially literate. want to become publicly listed.
b) The PSE assigns trading participants to interact
2) What would happen if you don’t invest? with the public for the buying and selling of
shares.
a) Then you would have zero (0) chance of letting c) The trading participants become the middle
your invested money grow, as opposed to man between the PSE and the investing public.
someone who does invest.

3) How much money can I make in the stock 4) How do I make money in the stock market?
market?
a) Through Dividends: The dividends are your
a) Depending on how much you invest, you can share of earnings in the company as an investor.
earn around 9% a year in return. Some earn as b) Through Capital Appreciation: Where the
much as 50%. shares you own are worth more than when you
bought them.
4) How much money do I put in the stock market?
5) What are the risks?
a) Most firms require a minimum of $1,000 (PHP
52,000) to open an account. In most cases, it
may not be worth investing just that because of a) inherent risks
transaction fees. b) risks due to ignorance
b) Normally, people who actively invest in the
stock market would have around $50,000 (or
PHP 2.5 million)
IV. BULL MARKET VS BEAR MARKET
5) How is the Philippine stock market doing
today? V. Bull Market
a) As of 2017, less than 1 million Filipinos were
found to invest in the stock market.
a) A bull market is when the economy is doing
well, the GDP is growing and stock prices are
II. STOCK MARKET BASICS (PART 2) rising. The bull market charges ahead.
b) “Bull” refers to an investor who believes that a
market or individual stock issue will rise in
III. What are stocks and what is the stock market?
value.
c) Bulls make money.
a) Stocks are shares of ownership in a
corporation.
2) Bear Market
b) The stock market is a place where you can buy
and sell shares of stock of a publicly listed
company.

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 a) A bear market is when the economy is bad,
recession is looming and stock prices are falling.
A bear market hibernates and moves slowly.
b) “Bear” is someone who believes the opposite,
that the market or stock will drop in value
c) Bears make money.
3) The Chickens
a) Chickens are afraid to lose anything. The invest
in safe things like bonds or mutual funds.
b) Chickens have no specific plan and are driven by
fear of losing their money. Fear overrides
common sense and any plan is quickly changed
if a loss occurs.
c) Chickens sit on money.
4) The Pigs
a) Pigs are high-risk investors. They want to
make a killing in a short time. Unfortunately,
they are usually led to the slaughter.
b) Pigs are impatient, greedy and emotional
towards their investments and only think of
themselves.
c) Pigs get slaughtered.
VI. GETTING STARTED
1) Familiarize yourself with the stock market
before you participate in it.
a) Think of it like shopping--except it’s shopping
for companies.
b) Use a virtual trading platform like the one on
Investagrams--it simulates investing in the stock
market without actually imposing any financial
risks! (follow this link to sign up: bit.ly/2r0tguV)
2) Find yourself a good stockbroker (someone
who carries out investors’ buy and sell orders).
a) Traditional Broker
i) Investors can make transactions through
them
ii) Can be reached through call or text, Viber,
and even Facebook Messenger
iii) Guided process with constant advice
b) Online Broker
i) Groups that have been licensed to buy and
sell stocks
ii) You are given what you need to maneuver
in the stock market, but there is no one to
advise you
iii) May require you to do extensive research
on your own
iv) Often requires a minimum deposit
v) Some online brokers:
(1) COL Financial Group (minimum
deposit of PHP5,000)
(2) BDO Nomura Securities (no minimum
deposit)
(3) RCBC Securities (minimum deposit of
PHP10,000)
(4) AP Securities Incorporated
(minimum deposit of PHP50,000)
3) Once a broker has been found, the next step will
be to open an account with them.
a) Requirements vary, but usually consist of:
i) An application form (can be retrieved from
a broker’s office or website)
ii) Two valid government IDs
iii) Your TIN (tax identification number)
b) Before depositing into the account, you must
first wait for the application to be approved or
confirmed.
4) You’re ready to start trading.
a) As with all things, note that it takes time to
become an experienced and wise investor.
b) There are several factors that affect how much
you earn in the stock market:
i) Current Market Dynamics
ii) Personal Investing Strategy
(1) How often do you make trades?
(2) How much do you buy in shares?
(3) Which companies will you invest in?
VII. INVESTING STRATEGIES
1) Invest early.
a) This allows you to take advantage of
compounding over a greater period of time.
b) Example: If you invest PHP 25,000 and manage
to have your account grow by 8% every year, 40
years later your investment will be worth PHP
543,000.
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2) Invest regularly.

a) Investing the same amount in regular intervals

is much better than investing only once.
b) Example: If you invest PHP 25,000 at the age of
25, allow it to grow by 8% every year, and add
PHP25,000 in every succeeding year until your
retirement, you will eventually have PHP 7
million.

3) Invest long-term.

a) Long-term investing solves the problem of

short-term volatility (choppiness in price). On
occasion, some issues may cause prices to
fluctuate.
b) After all, companies need time to grow, so
prepare to sow your seeds in great businesses
and let time do the rest.

4) Invest using diversification.

a) Risk management should always come hand-in-

hand with your choice of investment.
b) One way to contain risk is by diversifying or
spreading investments around and away from a
single asset class.
c) Try to allocate capital evenly among stocks in
different industries or sectors, so as not to
concentrate too much risk in one area; balance
your investments.

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