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A Beginner’s Guide to Investing in the Stock Market

I’ve always wanted to invest in the stock market– ever since I was in college.  So right after graduation, I explored the internet for information on how to get started.  It took more than 6 months to learn it on my own. The problem was that I understood bits and pieces of information only, but I couldn’t see the big picture.  I went to Metro Manila from my province in Bicol to work in a multinational company and there I learned more about investing in the stock market.  

If you've ever looked at the stock market and thought, "Hmm, maybe I could get in on that," then this guide is for you. Investing in stocks can be a great way to build wealth if done right, but there are also many risks involved. That's why we're here: to make sure your money stays safe and grows over time.



What is the stock market?

Let's start from defining what is a stock market. A stock market is a place where companies can raise money by selling shares of their company to investors. It's also where investors buy and sell those same shares. The stock market is regulated by the Securities and Exchange Commission (SEC), which ensures that everything runs smoothly and prevents fraud from occurring. The markets are open 24 hours a day, five days each week except on holidays like Christmas Day or Thanksgiving Day when they close early at 2:30 pm Eastern Time.


The Phil Stock Exchange(PSE) in the Philippines, New York Stock Exchange (NYSE) in US are one of several exchanges located throughout the country; others include Nasdaq and BATS Global Markets (formerly Direct Edge). These exchanges host auctions for buyers and sellers at regular intervals throughout the day so that everyone has an equal opportunity to buy or sell securities at fair prices based on supply/demand dynamics within their respective markets' trading systems."


Do you need to be rich to invest in the stock market?

No. You don't need to be rich to invest in the stock market.

Anyone can invest in the stock market, even if they have no money at all!

Investing is a long-term strategy, so you should never expect quick results from your investments (if they do come quickly, then something has gone wrong).

Before making any decision regarding your finances and investments, plan carefully and stick to that plan as best as possible no matter what happens around us or inside us (e.g., emotions like greed or fear).

Investing in the stock market is a great way to build wealth over time. However, if you’re not careful and do not plan properly, you can easily lose money or even your entire investment. There are no shortcuts to building wealth; it takes patience and discipline. Investing like a slog.


Investing in the stock market is not easy, but it should be fun and rewarding. The best way to learn how to invest is by doing so. Start small with a few hundred dollars and try different investment strategies until you find one that works for you.


How do you buy and sell stocks?

To buy or sell stocks, you need to be registered with a brokerage firm. That's the company that will open your account and handle all of your trades. Once you've registered, it's easy! You can do everything from home--no need to go into an office or call anyone up on the phone.

Once you're registered with a broker (and have deposited money into your brokerage account), here are some ways that buying and selling stocks works:

  1. You can place an order online through their website interface (or app). This is how most people buy/sell these days because it's quick, efficient and convenient--but not everyone has access to Internet at home yet so there are other options below too! You can find a listing of online trading here

  2. If none of those work for whatever reason (for example because they don't have good customer service), then call them up directly instead here


How are share prices determined?

The price of a share, or any other security, is determined by supply and demand. The more people who want to buy it and can afford to do so, the higher its price will be. Conversely, if there are lots of sellers but few buyers (or vice versa), it will result in lower prices.


The value of a company determines how much investors think their shares are worth--and this determines how much they're willing to pay for them when they buy or sell them on an exchange like Nasdaq. If you're thinking about buying into a particular company's stock as an investment opportunity but aren't sure how much money you should put into it yet...there's no need to worry! We'll cover this topic further down below."


What are the different types of stocks available?

There are several types of stocks, which can be broken down into two categories: common and preferred.

Common stock is the most common type of stock. It entitles you to receive a share of any profits from your company's operations, but not before they're distributed to all shareholders (including those who own preferred shares). In other words, it doesn't come with any perks or special rights beyond what would normally be available as part of owning regular old equity in a public corporation.


Preferred stock isn't quite as popular with individual investors because it doesn't offer as much upside potential--but if you're looking for steady returns over time with little risk involved (and don't mind losing out on some upside), then this might be right up your alley! Preferred shares typically have higher dividends than common ones do; however, these dividends aren't guaranteed by law like cash payments are--so if something goes wrong financially then there could be delays or even complete losses when it comes time for payout days."


Why should I invest in the stock market instead of just keeping my money in a savings account?

The stock market offers more potential for growth than a savings account. In fact, if you invested P1,000 in the S&P 500 index in 1980 and never touched it again until today, that P1,000 would be worth over P10 million (adjusted for inflation). That's an incredible return on your money!


The downside is that the stock market is much more volatile than most savings accounts or CDs. You can lose money as well as gain it--and sometimes both at once! If you have a long time horizon (say 10-15 years), this isn't such an issue--but if you're planning on spending your investment funds within five years or so of making them available to yourself financially speaking then this could pose some difficulties down the road

. The other thing to consider is that the stock market is a game of chance. You may think you're making an informed decision about buying a particular company's stock, but there are plenty of variables at play--including the fact that your analysis might be wrong! So while it's not impossible to make money in the stock market, it's definitely not as easy as putting your money in a savings account or CD.


If I decide to invest in the stock market, how can I make sure my money stays safe?

If you're going to invest in stocks, it's important that your money remains safe. Here are some tips for investing safely:

- Invest in mutual funds. Mutual funds are a type of investment pool that allows many people to pool their money together and invest it all at once. A fund manager will then take charge of this pool of funds and use it to buy stocks or other assets on behalf of all investors in the fund. This can be an effective way to spread out risk because one bad stock won't ruin your entire portfolio--and if several good ones go up at once, they can offset each other so that overall returns are still positive even though some investments perform poorly over time (or vice versa).


- Invest in index funds or ETFs (exchange-traded funds). These types of investments track certain indexes like the S&P 500; when those markets go up or down, so does yours--but without any additional management fees! If there's no reason for anyone else besides yourself holding onto your shares then there won't be any trading costs either; just remember not all companies offer these kinds of products yet so make sure yours does before purchasing anything through them."

Investing in stocks can be a great way to build wealth, but it does take some education and practice.

Investing in stocks can be a great way to build wealth, but it does require some education and practice. You need to understand how the market works before you start investing in individual stocks.


There are many different types of stocks available for investors, including common stock and preferred stock (which pays dividends). You can buy and sell these investments online or through traditional brokerage firms that charge commissions on every trade you make.


You can also invest in mutual funds and exchange-traded funds, which are managed by professional investors. These investments offer a better return on your money because they spread out the risk over many companies instead of just one or two. Mutual funds are available for almost every type of investment, from large cap stocks to small company stocks.


You can also invest in real estate, which is another way to build wealth. You can buy a home and rent it out, or you can buy properties that produce income like an apartment building or shopping center. If you want to take advantage of this opportunity but don’t know where to start, consider hiring an experienced real estate agent who can help you find the best deals in your area.


We hope this guide has given you a better understanding of how the stock market works, and whether or not it's right for you. If so, then congratulations! You're ready to start investing in stocks. Just remember: don't let your emotions get too involved when trading; remember that there will always be ups and downs in any market--even one as volatile as the stock market. And most importantly: do your research before making any decisions about what kinds of investments might work best for your goals (and temperament).




About the author 
Jack Marbida is a  is a husband to his wife Wene and a father of 2 little boys Isaac and Israel, he is a financial advisor, speaker, and writer who helps families be financially stable and grow their relationships. He works with families to help them reach their goals by teaching them about financial literacy and helping them develop a healthy relationship with money.

He has been featured in Sun Life Financials and others for his work as a financial coach. He is also the founder of Online Advisors Financial Education, which provides free educational content through blogs and videos.

Jack speaks at conferences across the Philippines on topics such as family finances, and personal and professional growth.  

You can contact Jack Marbida through his social media accounts or email him at papajackph@gmail.com.

Cheers! 

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