STOCK MARKET INVESTING The art of buying low, selling high

The alarming growth of investment scams in the country proves that Filipinos are starting to appreciate the importance of investing. However, the promise for better returns usually lure the more gullible ones into investing in these too good to be true business propositions.

Halfway through the year, the local corporate regulatory watchdog Securities and Exchange Commission already caught several investment scams across the country, most of which involved bogus multi-level networking schemes, which are so hard to distinguish from the legit ones.

The demand for this multi-level networking business could only mean one thing: Filipinos have extra money they just don’t know where to invest it.

There are lots of options where people can put their money into -- insurance, bonds, savings account, and the stock market. Among these investment options, stock market investing has been the widely suggested.

“Stock market is one of the investment instruments that can help potential investors. It is a shortcut to wealth creation. It has higher yields,” First Grade Finance Inc. managing director Astro Del Castillo said in an interview with Business Bulletin.

Built in 1992, the Philippine Stock Exchange (PSE) is the national stock exchange of the country. The market provides corporations access to capital in exchange for selling a piece of ownership in the company to big and small-time investors of different ages, both young and old. Then combine what you have learned from him and from your own research and decide what to buy and when to buy,” Del Castillo said.

In investing in stocks, you will probably hear the advice “buy low, sell high” more than twice. The principle behind it is very simple.

It means that it is always better to buy when the stock price of a particular company is on downward trend because it is cheaper. Then when the price surges, you can already start selling. That’s where you can start making money.

In choosing what to buy, Del Castillo said it really “depends on your risk appetite.”

“If you are a conservative type, go for blue chips like Ayala Land, Inc., Ayala Corp., SM Group, but they are more expensive. But they have track records and they give out dividends 10 to 20 percent a year,” he said.

But if one has limited resources, a potential investor can also look at small companies who have also been performing better at the market. then. I could have not chosen stocks since I’m just starting with my career but I decided that it’s going to be a long-term investment,” he added. Sanchez said he realized he can grow his salary by investing it in stocks.

“Just three months after investing in stocks, I was already able to increase the amount of my placement,” Sanchez said.

Even if the stock market is currently moving sideways, Sanchez said he would still keep his portfolio intact.

“There’s no going back. I’m keeping my money in stocks until it grows. It’s not wise for me to go when the stocks are down. Go out only if you already earned more than what you’ve invested,” he said.