Most Pinoys hold back due to investing myths
While investing in the stock market has been proven to be a great tool to build wealth over long-term, a lot of Filipinos are still not keen to invest.
Blame it on misconceptions and the lack of full understanding how stock investing can actually offer wealth opportunities to ordinary Filipinos aspiring for a better financial health in the future.
Many people still think it's too complicated, too risky, that it's only for the rich, for analysts, for people good in math, people with insider connections and people who are glued to their screen watching the green and red numbers move from left to right.
These are all misconceptions on what the market is.
Truth is investing in shares of stocks or equities is one way to increase your wealth.
Stocks can grow in value over time, providing you with returns that may be higher than what bank savings instruments can offer to you.
Another compelling reason to invest is that the stock market is poised for growth.
Studies have shown the stock market is one of the best long-term investments available and that people need to take that opportunity.
Considering the culture of financial dependency among Filipinos, there is definitely a need to cultivate a generation of investors and education plays a very vital role in the process.
But because investing in stocks also comes with a measure of risk, investors need to study well what they're getting into.
Book author, renowned financial speaker, personal finance expert and stock market trader Marvin Germo shared his tips to people planning to out their hard-earned money into the market.
STUDY FIRST BEFORE PUTTING A SINGLE
CENTAVO
Know all the things you need to know about investing in the stock market. Before starting to invest, you would need to know why there's a stock market; how you can possibly make and lose money in stocks; and why stock prices move up or down. You also need to know the basics of selecting srocks using fundamental analysis and timing stocks using technical analysis.
PRACTICE AND SIMULATE
Before investing your savings, open an online trial account to simulate and feel how to trade and invest in the stock market. This way, you get to apply and see how the concepts come to life in a real trading platform.
Also based on what you have studied, try to stimulate buying a stock and see how it goes. If you feel that you have gained a certain level of confidence from your simulation, then that's when you can open a real account. This way, you build confidence step by step without panicking at the thought of losing hard-earned money.
OPEN AN ACTUAL ONLINE TRADING
ACCOUNT
Open a real account and fund it with money that you have intended to put for stocks. Make sure that you are investing money that you don't plan to touch for more than 10 years and money that, even if it drops a certain percentage, will not make you lose sleep at night.
NARROW DOWN YOUR CHOICE OF COMPANIES
There are over 200 plus stocks in the Philippine Stock Exchange. If you are employed or you are running a business, it would not make sense to watch all the stocks that are out there because it will take too much of your time.
Research and only watch companies that are profitable, significantly growing, undervalued and are only at the start of its uptrend. Try to narrow it down to 10 stocks that you believe in and you know qualify based on the parameters mentioned.