Getting started with Stocks Trading (Philippine Market)

My trading account in First Metro has been approved! I can start trading as soon as I fund my account. It requires a minimum of P25,000 to start a First Metro account. If you want to know if investing in stocks is for you, then read on. But before anything else, be sure you're ready to start investing in any kind; you may want to read the "before getting started" entry if you haven't done so.

In my previous post, I talked about Mutual Funds where your money belongs to a bigger collection of fund managed by an expert. Now, if for some reason you feel like you can beat the best fund manager out there, AND you have the TIME to do it then this is for you. You really need to have time to do this, and preferably a reliable internet connection during trading hours (more on this later). It is strongly suggested that you attend seminars before you jump into trading stocks. As for me, I'll take my chances and jump into it right away. Experience is the best teacher anyway; I want to experience it first-hand. I'll also seek guidance from my finance mentor.

Only put money that you are willing to lose, especially when you're just starting (like me).  You need to be financially and emotionally prepared to lose big or in worst case lose it all, and I mean from P25,000 to P0. It is said that trading stocks is like gambling, but it is only gambling to people who don't do research or consume knowledge. As always, you can mitigate risks when you equip yourself with knowledge. On the bright side, the risk is high because the potential to gain is also high.

Let's first define what is a stock. From Investopedia, a stock is a type of security that signifies ownership in a corporation and represents a claim on part of  the corporation's assets and earnings. So in a basic sense, you're buying a part of the company and you become "part owner" of that company. "Part owner" is in quotes because it takes a lot of money to have a major role in a company that you bought stocks from.

Getting started with Mutual Funds in the Philippines

This October, I started investing in First Metro Assets Management Inc. I chose Save and Learn Equity Fund (SALEF); the minimum amount to invest is P5,000.

From the word itself "mutual", meaning it's shared. Mutual Fund is a collection of funds gathered from investors which is then handled by a manager. The manager is called "fund manager". The idea is that you are entrusting your money to a person who is, in most cases, more knowledgeable than you are in investing it to different security options like stocks, bonds, etc.

The advantage of this is that your money belongs to a pool which is big and has a buying power far greater than yours. This means that the investment is diversified and has greater potential to earn more. This is realized more if you don't have a huge amount of money to invest (e.g. you're starting with 5,000 Pesos). Your money is basically riding on the collected funds. Another advantage is you don't have to worry about it minute by minute or even day by day since you're not the one managing the fund.

Before you start investing

If you're a working middle class like me, or a rich kid who doesn't want to depend on your family's wealth, or an employee who has a hard time saving, this is for you. This is a prelude to getting started with investing; like a quick checklist before you put your money where it will work for you.

Many say that business is where the money's at (or "Nasa negosyo ang pera"), and many condescend people who work their ass off to earn money. Being an employee doesn't mean that you can't become a millionaire on your own. Everyone has his or her place, whether you enjoy having a business or you're happy being an employee, it doesn't matter. What matters is that you find contentment in what you do, and you can use your existing income to generate more money.

But before you can be a millionaire, it is wise that you develop a mindset that will increase your success rate towards financial freedom. Let's start with the basics first. The following are the things you may need to contemplate upon before you start putting your money in different investment instruments.

Introduction to Pesobility

This site is still under construction. For now, allow me introduce myself. I'm Manny. As of writing, I'm 27 years old and I'm working as a software developer in the Philippines for 6 years. I enjoyed the money I earned during my first years, mostly spending it to travel, having fun and drinking beer.Now that I'm starting to settle down, I need to be more responsible with my finances. Let's equip ourselves with knowledge and increase financial literacy so instead of working hard for money, you make your money work for you.

I will try to build this website up from research to help fellow Filipinos who are newbies in this area to be more aware that there are resources out there (free and paid) that you can take advantage of in learning how to invest your money wisely.

I got interested in investment because I didn't know about these things before. And now that I know something about, I want to share the knowledge and continue my research. Makes me wonder why these things aren't taught in schools; it should be, it makes people wiser about their money.

To get started, research first about the various investment options available in the Philippines plus their corresponding risks.  There's UITF, Mutual Funds, Stocks, Bonds, etc. Also research why putting all your money into a savings account of a bank is a dead investment.