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How to Start Investing in

Philippine Stock Market
(Beginners Guide)

Made simple and basic for learning the Stock

Market

Gen H. Punongbayan

Copyright @ 2016

genpunongbayan.blogspot.com

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 TABLE OF CONTENTS

I. INTRODUCTION
How I started 3

II. CHAPTER 1
What is the Stock Market? 14
- Know how it works 15
- Obligation of the Company listed in Stock Market 16
- Risk Involve
- Opportunities and Benefits 17

III. CHAPTER 2
Things to consider before investing on stocks 22
- Objective of the investment
- Know the proper mindset and preparation 25
- Mistakes in investing and how you can avoid it 30

IV. CHAPTER 3
How to open an online account and get started 33
- Steps in opening a broker account 36
- Terms in Stock Market 37

V. CHAPTER 4
How to choose your first stocks 42
- Know what strategy you can follow 44
o Peso Cost Averaging
o Buy and Hold Strategy

VI. CHAPTER 5
Overall change 50

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Introduction:
How I Started

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L ike everybody else I was raised to be an obedient
son of my parents. I was a kid who was raised to do
diligent work in school. I wasn’t bright nor at the
top of the class. Actually I’m not pretty sure what
to pursue after finishing up Psychology. I could
have a career on human resources, teaching and many
more. What I had is a desire to express what
undiscovered potential I can do and be fulfilled.

Year 2008 two of my high school friends visited me

from Manila. They were about to open up a business
opportunity that time. I don’t have any idea of the
opportunity that they saw. I just can sense that it
was big and it was a networking business.

I’m sure you had been kidnap before by your friends,

asking you to come for party and eat free dinner. We
love free right? So that’s why we come.

One of my friends speaks at one of his seminars

regarding the business. He was a different man from
the last time I saw him during school days. He was
more confident compare before. What he was able to
achieve in his business was I can say an achievement
for me. He deals with city counselor and politician
about his business, its mission to help people
regarding health matters and make him financially
secure.

In my perspective it was not ordinary to a young guy

to talk to grown up people specially city officials.
I can see his driven to become successful.
Unfortunately it was short live after a year

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corporate management messed up in the business we
took in. We both separated apart after it happened
but the experience will never be lost.

It doesn’t stop my desire to search and find my own

way to contribute to society and be fulfilled.

Frustrations

Soon I found myself doing businesses in network

marketing. This company I saw made me excited to try
it, so I did everything to learn the whole system
and began to create and do things I didn’t tried
before; making Youtube video presentation,
Powerpoint presentation, posting advertisement on
the internet, travelling far places and soon people
began calling me during the course of the day and
some at the middle of the night to inquire.

I found myself attracting business people, I believe

that the system of the company would work and I know
people would be interested. One ordinary day and I
thought that was the break I’ve been waiting for;
one of my partner who I never seen in-person
referred me to his friend an accountant who
according to him is a Millionaire. This partner of
mine who is now in Canada made a call to ask some
few question about the system and company; I manage
to answer all his question and convinced him to join
in. I thought he was just an ordinary people who
will join as a member, later on I found out he was
already working it out to his town and planning to
put a franchise.

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Cut story short he flew all the way from Bacolod to
Laguna to invest the P250,000 as half of the whole
cost of the Franchise to make a reservation. I was
excited yet fear of risking big, he told me “There’s
no way getting back and I’m betting it now Gen” it’s
not my money but yet I know it’s a huge amount.

That’s how risk taker looks like in person and I met

one.

Misfortune began to happen! Company had issues with

(SEC) Security and Exchange Commission regarding the
nature of the business. Some franchisee not
remitting the income of the company and began to run
away with people’s money. Even the media had
involved in and broadcast it in weekend news and
that was history. In an instant we felt hopeless and
all efforts had wasted. After few months it shuts
down and everything disappeared.

Even it happened I was fighting back to move on and

recover.

Don’t quit when you’re frustrated, you can rest for

a while and just keep looking and find things that
works for you.

How I began investing on Stocks

It all started way back 2012 two years after I

graduated in college, I was an employee under a
manpower agency and I already had my ups and down
from several businesses I joined in the past two
years.

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I was already open-minded to business because of the
eye-opener what my schoolmate shared to me; stock
market was new to me and I knew I heard it before
but I never had the eagerness to know anything about
it. I’m involved in an online business program that
time and I thought it was the same.

I tried different business concept from Multi-level

marketing and high paying program on the internet
but to no avail I earned but still failed. I learned
from the experience that you may be making in the
short term but it won’t fulfill you in the long term
if you didn’t find the right organization with a
clear mission and has a passion about it.

But I didn’t quit but keep on searching.

Like any other afternoon we were inside the company

particularly at the quality control office; I took a
closer look in front of the computer screen while an
employee is checking his account online I can see
numbers and company code and I didn’t understand it
the first time. I saw tickler flashing moving from
left to right on the screen and I don’t know what it
was.

“It’s like something was about to happen”

He went on explaining me the idea and I’m trying

very hard to understand what it was. He made some
computations like shares and value per shares. I’m
starting to figure it out but I can’t grasp it all
at that moment. I was pretty convinced that I needed
to try it out since I knew it could help me on
finances.

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He told me to open an account online and that’s the
best thing to do to understand how it works.

“Tell me and I will forget. Show me and I will

remember. Involve me, and I will understand” –
Chinese proverb

“The best way to learn something is doing the actual

thing”.

He told me it was P5,000 as a minimum starting. I

don’t have the money that moment but believe me I
don’t earn that every cut-off that time but I manage
to gather it up even I was making only minimum
salary at that time.

Another employee also heard our conversation and

reacted that it was pretty expensive. If you think
about it maybe yes for spending expenses but for
starting something like business or investment that
is still pretty cheap.

It always comes to the money mindset. Learning can

be really costly and most people treat it as an
expense. Personal development, financial seminars
and books have cost but the value that it teaches
will always be greater in value to people who will
apply it real life. That’s why we spend money for
our tuition to learn subjects but unfortunately we
don’t have any financial subject to aims us to teach
how to make our finances works. Most of the things
out there took money from us.

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It’s always easy for us to spend on new gadgets and
stuff but learning skill would be hard for most
people.

By the time I gather up the initial investment I

quickly sent application forms to my online stock
broker. I had a response within 3 business days.
Later I will guide you step by step on opening up an
online account and how you can grow your money too.

I was excited on buying the first stock and I can

still remember that I let my friend buy the stock
for me. He’s telling me to buy blue chip stocks, I
don’t know what it was and I’m afraid making
mistakes because it was real money. I just told him
access my account and buy the stocks for me. He went
on to buy shares from 3 different company (East West
Bank (EW), Construction company (EEI) and SM Prime
holdings (SMPH) it was all worth P5,000 at that
time).

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On the first few months all the stocks I held was
appreciating its value. First thing in mind was “ah
this looks good and I think it will be easy”.

The excitement was there and almost very often I

check my account watching it moves up and down. I
also made spread sheet on excel to monitor its
performance, that’s how obsess I am investing in it.

Fear of losing money

I was having 22.69% interest on my portfolio within

3 months but suddenly the market shifted going down
and few of my stocks began to depreciate, some in
short term and others still need some time to
recover.

That time I don’t have any game plan. My emotion

starts to kick in, anxiety and impatience began to
manifest. That is what beginners mostly experiencing
by lacking knowledge, proper training and mindset.

That causes me selling losing stock and makes me

disappointed, the following months it recovers and
rises up again. Realizing I made a mistake just
because of the decision based on my emotions.

The following months I began holding to a certain

stocks that I carefully analyzed both fundamentally
and technically. I began researching what is the
proper way to minimize the risk of losing. Reading
articles and buying financial books to keep me
educated.

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It was true that when you are prepared mentally and
you did your own research, you will be confident at
the market even it’s going down.

“If you fail to plan you are planning to fail” –

Benjamin Franklin

By the following years I had another job on a call

center company. Salary was increased and that let me
able to pour in bigger amount on my stock
investment. I began throwing in 25% of my salary in
consecutive months. You don’t have to do the same
and it depends how much you can able to set aside.

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I only spend money on things that has value to me. I
was giving my share to my parents, donation, and
personality development books. I watch Youtube for
financial mentor and read a lot. I was educating
myself since no one will teach me how. My parents
are not financially educated on different kinds of
investment, that’s why they aren’t able to teach me
this.

During this time I manage to make the P5,000 initial

investment to P19,702.11 and it was hard. I have to
keep myself discipline from impulse buying; I have
to avoid places where too much hot items are around.

Discipline and knowledge will build you wealth in

stocks and the younger you are the better to start.
You’ll not notice it in short term but in the long
run you will realize you’re getting closer at your
goal.

Investing in stock seems complicated at first but

very simple once you get your feet wet.

“It’s like learning to ride the bicycle, your first

attempt would be rough and you might fall down, but
continues trial will teach you how to balance and
learn how to ride eventually”

Start small and when you able to handle the fear,

you can eventually grow big.

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Develop good spending habits because wealth won’t
appear unless it starts on having the right attitude
and thoughts.

Before going through all the processes you should

ask yourself why? There should be a compelling
reason why you need to start today. Is it to make
quick and easy profit? You need it for retirement or
you just wanted security at the time you can’t work
anymore.

If you don’t have any solid reason you can easily

stop investing and quit.

There’s no right timing to start investing because

it’s always right to start now.

Philippine as you can see has a lot to develop. Its

potential has far way to go. Different sector like
Construction Company, banks, retail, food &
beverage, or real estate are just some of the
industry that have big room for growth.

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 CHAPTER 1:
What is the Stock
Market?

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W hat is the stock market? How can it help you grow
money? Basically it’s the way how we can partner
with the best companies in the country. Let’s name
one of the big companies in the Philippines “TEL” or
Philippine Long Distance Telecommunication. In order
for them to grow and to purchase more assets like
hiring more manpower and buy telephone units they
need to raise more capital and Stock Market is the
channel to do that.

How it Works

Once a private company becomes listed in the Stock

Market it will turn to a public company; which would
mean local or foreign investor can buy share with
whatever company listed in Stock Market. Listed
company can raise more money by selling shares
through a Stock broker. These people are the
professional that buys and sell shares for you. Back
then we have traditional broker who you can call
through phone. You just have to give instruction to
them before they buy or sell shares. Right now we
have these online brokers, investment companies and
banks that can help you channel with the stock
market.

Before I started going to Stock Market I have this

wrong beliefs that only rich people can participate
to stocks and people who doesn’t earn big can’t
afford to invest in.

People also said it was risky, complicated and they

have no time to study it. They maybe have different

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mindset and perspective. Then most probably they
won’t start anything or even to start doing it in a
wrong way.

Today Stock brokers made terms with local investors

for them to access the market easily by providing
easy and convenient initial funding even the
ordinary people can participate.

Obligation of the Company listed in Stock Market

Before a company can be listed in the Stock Market,

a company has to follow regulatory requirement that
they need to comply. A private company expands as it
became listed in the Stock Market. These companies
need to be transparent and they have to disclose
important things because they are accountable to its
stake and shareholders like you.

Companies make financial reports and release it to

public. So investors like us are aware of what’s
happening in the company.

Risk Involve

When capital is flowing in the Stock Market several

companies will start growing in value making your
bought shares/stocks goes up in value. Now if
capital was pulled out from the Stock Market it
could affect the price of the stocks to go down.
That would mean you have to do research if the
company you invested in has good values and would
still perform better in the future. There are many
factors that could affect the market; It maybe
global events, news, updates within the company and

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volume of foreign investor that’s coming in and out
on the market.

Opportunities and Benefits

Now we have to know how we can earn from companies.

There are two ways to earn.

First is through selling your share for a higher

value and second is through cash dividend. In the
long run companies would have its ups and down and
that affects share prices. If the company you bought
will grow, most probably your share will increase
also and if you sell your shares for a higher price,
automatic you had earn a profit.

Having shares or stock is like having a business.

This isn’t like gambling, rich quick scheme or all
about money only. You have to buy shares from the
companies you have confidence and beliefs that it
will grow in the future.

Your wealth is relied on the success of the company

you invested in. So every investor has to do its own
research to minimize risk.

So if you think Jollibee will serve more spaghetti

in more countries around the world, why not buying
those shares. As I’ve seen back 2011 its value was
averaging 90/share and now reaching 220/share in
February of 2016 it’s almost 144% on gain within 5
years.
It’s hard to guess which company will do great in
the future unless you do research. Fundamentally you
have to assess the nature of its business. If we go

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back to Jollibee and you can see its operation all
over the Philippines alone, how do you think about
their business? Filipinos love the food and when you
see their restaurant it’s always jam pack with kids
and customers.

Even four years old kids knows what Jollibee is.

There are branches across Asia and other countries
today and still counting that makes them one of the
leading franchises in the country.

You want to buy shares from the companies that are

making profit from their business and increasing its
share price yearly. Who wants to buy shares from the
companies who lose its earning yearly? You can
always see yearly average price of share or
valuation on their company profile or at the
broker’s website as reference.

As you can see Stock Market is one of the tool that

help us our money work for us. If you have income
from your job, stick with it and little by little
you can set aside money buying shares from
companies.

Stock Market has also its own risk. By nature Stock

Market goes up and down in the process but if you
look at it decades ago and until now, Stock Market
goes up in value. Particularly in the Philippine as
a developing country it’s still growing year after
year. Companies are expanding; more people are
working thus giving the country a better economy.

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In Chapter 4 we will talk about possible companies
you can invest in.

It may seem too complicated in the beginning but

once you started, it will be very easy. I won’t
tackle the specific of technical investing it will
get too overwhelming of information but I will guide
you on the basic idea how you can prepare and start.

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Ways to earn in stocks:

1. Selling Shares for a higher value. You can buy

then hold stocks for years and hold on to it
until it grows. When to sell a share will
always base on your investment objective, in
Chapter 2 you’ll find out.

2. Cash dividend that you earn quarterly or

annually from a company. Not all companies are
paying dividend, you can check company that
have cash dividend through their profile in
the broker’s website.

For example: I have 100 shares from

Universal Robina Corporation and they pay
P2.40/share, it will be P240 minus
withholding tax. You receive cash dividend
on a quarterly, semiannual or annual basis
depending on your company. This is a form of
passive income. Income that you earn without
doing anything.

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 CHAPTER 2:
Things to Consider
Before Investing on
Stocks

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These are the things you should consider first
before getting into stocks:

Know your objective

You can’t just put money in stock without having a

goal in mind.

Set some objectives why you want to invest. It

depends on your goal if stock market is for you, let
say the money you invest in will be for your wedding
plan next year, Stock Market would not be the right
place to put that because in one year we can never
tell if there’s sudden event might happen and it may
cause your capital to go lose value.

If your goal is like for retirement and it will be

for the next 20 to 30 years, getting to Stock Market
will be some of the option you can do as long as you
pick the right company.

If your objective is just to earn quick as possible,

it might be not for you either. This will require
you to be an Active Trader.

Active traders are people who buy and sell share on

a daily basis. They require different set of skills,
they know complex technical analysis to do this type
of trading. I’m sorry but we don’t tackle this style
of trading here in this book.

Building wealth requires patience, willingness and

knowledge. It’s like planting a tree it requires
time for it to grow. Even in business and job,
there’s no such thing as instant success.

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You have to know your profile before entering the
Stock Market because different profile fit for
different type of investment such as equity market
(stock market), bond fund, money market and mutual
fund.

There are 4 investment personalities

1. Conservative investor – People who invest in

Time Deposit who can’t take too much risk.

2. Moderate Conservative - People who can take

minimal risk and want stability better than
time deposit. They invest in Money Market
Funds and Intermediate Bond funds which give a
higher return than Time Deposit.

3. Moderately Aggressive - People who want

balance and steady growth. They invest in bond
fund or mutual fund. Their investment time
would be 3 to 5 years.

4. Aggressive Investor - This people aren’t

afraid of taking risk, they can take loses
along the way. What they want maximum long
term growth. This people invest in Equity
Market/ Stock Market.

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Know your risk appetite and you will know if Stock
Market is for you. The higher the return the higher
the risk, the longer you can wait the higher
potential return you can make as long as you can
take the risk.

You can answer this by your age. The longer your

capacity to earn the higher risk you can take. Even
your money lose value when you are young you can
still have some time to recover from it unlike
investing when you are old most specially if you
need that money sooner, you can’t take too much
risk.

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Mindset

Once you settle with your profile. We have to know

the kind of mindset you need to be successful in
this investment.

You have to be keen in little details because that

little detail has big difference in life. Before you
start managing your finances; the very first thing
you should manage is yourself.

The way you think and the thoughts that you have in
mind. What we usually have is the result of what we
have thought yesterday. We attract not what we want
but who we are. Getting what you want requires you
to become the person you need to be to get that.

“Your beliefs become your thoughts,

Your thoughts become your words,
Your words become your actions,
Your actions become your habits,
Your habits become your values,
Your values become your destiny.”
-Mahatma Gandhi

What does it take to have a better mindset? Start

planting good things on your mind. If you’re
surrounded with negative people it’s better to find
good people with good mindset. If you keep sticking
to people who have poor spending habits most
probably you will become one also. If you keep going
together with friends who loves to spend a lot
sooner or later you’ll find yourself empty two to
three days after payroll and began borrowing money
at the end of the month.

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Remember you can always decide what action to take
to get the things you wanted. Jack Canfield author
of the “Chicken Soup for the Soul” stated a formula.

E + R = O
Event + Response = Outcome

Having a good mindset gives better response and that

would bring you the outcome you wanted than people
who loves to react to an event that changes nothing.

Instead of worrying where you can borrow money when

salary is short why not thinking on idea that could
bring you money.

Most people don’t have idea where to spend money and

keep complaining they are making little. They wait
15th and 30th of the month and they keep doing the
same thing instead of buying book related to money
to learn or giving some time studying financial
literacy.

This requires “Thinking differently from the rest of

most people who think the same”.

Here’s a quote from the book “The Richest Man in

Babylon” said “I found the road to wealth, when I
decided that a part of all I earned was mine to
keep”.

What he meant was paying yourself first, by keeping

some amount from what you earn whether salary or
profit. Basically it tells you to save not less than
10% of what you earn. Aside from that you have to

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know where to put the savings to further grow the
money.

It says there that every gold piece that you save is

a kind of slave to work for you.

You don’t necessarily need to put all your savings

in one basket but you can pick those investments
that fit your objective.

Now if you had a debt. Still keep in mind saving at

the same time little by little you’re paying those
debt until it clears. Once all debt is clear, now is
the time you start accumulating wealth and start
putting those to your bank accounts and investment
account.

I have one particular friend of mine who reached me.

I was the Godfather of his child, I was helping this
friend of mine every time he’s asking something
mostly money, even while at abroad I was able to
help him providing for his expenses on medical exam
for his job, unfortunately that was wasted since the
company doesn’t have any feedback on him. Around
1:00 in the morning he reached me borrowing some
money this time he needs it for him to go see his
dad. He was pawning me his G-Shock watch. Sad to say
I wasn’t able to help him this time not because I
don’t have something to give but I wanted him to
learn.

Most often I see him drinking, I wanted to help but

it will be useless if he doesn’t want to help
himself. If he will just realize instead of sticking

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to his friend why not keep looking for ways to help
his family.

Life Style and habits

Once you had that good mindset, your old habits have
to start changing gradually. I used to see my aunty
keeping all receipt from her spending back in Dubai.
I asked, why do you keep those receipts aunty? She
told me “So I can see where my money goes and have a
clear idea where my hard earn money goes to”.

You may try to list your spending on a sheet of

paper or a filing just to realize where you have
spent your income for that month.

While doing those things you can be aware of the

limits and where to spend available money. My aunt
was very frugal and she’s sending almost all her
income back to Philippines because of her youngest
child tuition in College.

If you think your income is short, think again if

your spending is really necessary.

There’s a saying “live within your means” by not

spending more than what you can earn. This is the
reason people get in debt and always short on
budget.

Most people have a tendency to spend more when their

income increases. A person who earn P40,000 that has
an expenses of P30,000 is as the same to a person
who earn P15,000 with P5,000 expenses monthly.

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Keep your expenses low as the income grows and
that’s where you can save more and invest.

“It’s not about how much you earn but how much you
can keep”

Some people look like they have everything in life

but still they can’t stop working because they have
too much to pay. It maybe credit card debt or other
unnecessary bills that they need to pay.

That’s why whatever income we make, we feel it’s not

enough and we felt always short. We can never
achieve freedom unless we keep spending a lot from
what we can earn.

Now if you tell me, my earning is not really enough.

Take the advice of the author Robert Kiyosaki on his
bestselling book “Rich Dad and Poor Dad” he stated
that “Living below your means is killing the spirit
and expanding your means is much better”.

He’s telling that it’s hard to keep living below our

salary or income instead find a way of expanding our
income so we can live the way we wanted. This will
makes you find ways of acquiring asset. Stock is one
form of asset, through the shares you had bought it
can pay you quarterly or annual cash dividend
depending on a certain company. Assets are things
that make money flows in your pocket.

Buy more assets and you can be free doing what you
love in life.

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Common Mistake of Investing

Emotions

Early on I mentioned I sold share from Jollibee

because it loses its value and afterwards that share
began to rise up in value. Remember the fear of
losing money in stock market won’t help us. People
commit mistake if they decide whether to sell or buy
based on emotion alone. Changes of share prices
daily don’t totally tell us there is a problem with
the operation of the company. They are normal, price
goes up and down as long as that company is doing
well it will continue to rise up in value.

One of the world’s richest man in the world Warren

Buffet said “Be fearful when others are greedy and
be greedy when others are fearful”.

If greed investor starts pouring in the market, it

has a tendency of making share price goes up and
when investor becomes fearful and pull those
investment out it makes share prices go down. It’s
every investor responsibility not to follow everyone
advice, you can lose money out there.

If you bought shares together with most of the

crowed based on hype and suddenly they become
fearful, your money could lose value fast but if you
bought share on its lowest price you already had a
bargain when market start to rise up. Again you had
to pick a stock that even though it’s going up and
down in value but through the years and decades it
grows up.

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Speculation

You don’t have to guess what company to choose. Come

up with the fundamental of the business; see its
room for growth think ahead like five to ten years
if that company you’re aiming at would potentially
grow big in the future. Historical performance
doesn’t mean future performance but this will give
you good reference to start. Take note this is for
long term investors. If you’re planning to trade
daily this won’t help you.

For example a typewriter industry might be good and

booming in the past but not until the concept of
computer was born.

Don’t listen to anyone if you already had some

facts. Develop your own strategy select company for
long term comfortable investment.

Don’t do gambling and if you’re putting it based on

your gut feeling it’s risky.

No Strategy

Going in Stock Market without a strategy is like

playing on a lottery. This requires you to develop
simple strategy that works for you. There are people
who keeps monitoring on a daily basis. I was one of
them long time ago, you don’t have to do this as I
said everyday changes in prices can make you anxious
and eventually you commit bad decision.

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If you are planning to go long term you don’t have
to check it daily. You can do investment on a
monthly or quarterly basis depending on your
lifestyle. How much to put in would depend on your
current income and objectives.

Most people don’t invest in stock because they don’t

have time to monitor it. What if it loses value as
they mentioned? As I said if you are in long term
you don’t have to worry much even the market is down
as you are confident of the company.

When Stock Market is down it only means that your

stock is on a bargain, you can buy more shares when
prices are cheap. Actually that’s the best time to
buy when prices are in lowest.

Soon it will rise by years to come and it’s up to

you how long you can hold or you can also keep it
forever because of the cash dividend it pays you.

32 | P a g e
 CHAPTER 3:
How to Open an Online
Account and Get Started

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E arly on I mentioned we need a stock broker to
invest in Stock Market. Unlike before we had
traditional broker associates where you need to make
phone call before you can instruct them what to do.
Today we have option to choose from. We have stock
broker online like BPI Trade, Col Financial, First
Metro Securites amd Philstocks. I suggest use Col
Financial as I’m using this online platform. Good
thing we had these technologies that make everything
convenient and easy nowadays.

Fees

Just to keep you aware there are also commission and

transaction fees from these brokers but it’s very
minimal depending on the size of share you’ll buy.
It may range to few centavo to few peso depending on
how much value of purchase you do.

Transferring Fund

You can transfer fund from your online bank account

to your online broker account. You can do this by
registering Col Financial to your merchant on your
online banking. BDO and BPI online has these
features. You can transfer fund just using your
mobile anytime and anywhere.

Online Features

Col Financial platform has great interface you can

easily browse menus and see updates on your screen.

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Everything you need is on their platform. Technical
charts, company profile, historical performance
chart, dividend notice, latest research and
recommendation.

Support

Col Financial also has schedule seminar on their

office at Unit 2403-B East Tower, Philippine Stock
Exchange Centre, Exchange Rd., Ortigas Centre, Pasig
City Phil. They are operating 8:30 am to 5:00 pm.
You can email helpdesk@Colfinancial.com for inquiry.

Types of Account

Col Starter - You can start at P5,000. This

provide a basic research report, standard market
information and charting data.

Col Plus – This provide live streaming quotes,

live chart data. Investment start at P25,000.
Even you start at P5,000, when you reach P25,000
balance in your account it will automatically be
upgraded to Col Plus.

Col Premium – For premier investor. Provides all

available features and a personal relationship
manager dedicated to assist you. This investment
is P1M.
35 | P a g e
Step to Open a Broker Account

Visit www.colfinancial.com check their “Open an

account” menu and download form for individual
account. Just fill up the form with complete
details. This is like opening a regular savings
account. After sending all the requirement wait 2-3
days, a representative will reach you and you
receive email notification about your new account.

Requirements to send

 Fill up Customer Account Information Form

(CAIF) sign all primary account holder.
 Online Securities Agreement (OSTA)
 Include Tax Identification copy with photo and
clear signature
 For foreigner, Alien Certificate of
Registration (ACR) or Work Permit from DOLE
 For children, (1) photo copy of valid
government issued ID of the parents and birth
certificate of minor applicant

Mail original copy to Col Financial Business Center

2403B EAST TOWER, PSE CENTER,

EXCHANGE ROAD, ORTIGAS CENTER,
PASIG CITY 1605, PHILIPPINES

Funding your account

You can fund your account using online banking. BPI,
BDO, Metro Bank, and Asia United Bank. Register Col
Financial under billing merchant to transfer
directly from bank account to online stock broker.

36 | P a g e
Terms in Stock Market

This is how it looks like inside the platform when

buying stocks. For this example you can see terms
and I’ll describe you one by one.

Stock Code – This is the code of the company. In the

example (JFC) it’s stands for Jollibee Food
Corporation.

Quote button – This button lets you know current

share price of particular company.

Buy button – Buy button will direct you to buy

screen menu; it will shows you the current prices of
the stock. You have to place order how many shares
you want to buy and what price. Once you agree on
the stock price, click preview order to see all the

37 | P a g e
charges, now you have to confirm the order by typing
your user password.

Sell button – Sell button is as the same with the

buy button except you’ll be selling your shares in
this menu.

Board lot – This is the minimum share that you need

to buy for you to invest in certain companies. You
cannot put a remainder in the number of shares.
Example (12) shares, it should be 10, 20, 30
multiple by the minimum shares.

Other companies like “TEL” Philippine Long Distant

Telecommunication or “GLO” Globe Telecom requires
(5) boardlot, usually this companies averaging
P1,000 above per share and other requires you to buy
(100) minimum shares but its value usually ranging
P1 to P10 per share.

The following day once you’re done with buying and

selling shares. An acknowledgement receipt will be
sent on your email and it will appear on your online
broker account screen the transaction you’ve made

List of some terms in Stock Market

Previous – Is the yesterday

price of the company

Last – Is the recent last

price after the market is
closed.

38 | P a g e
Change – The difference between yesterday price and
recent price after the market is closed.

Open – The starting price when the market opens that

day

High – The highest share price movement within that

day

Low – The lowest share price movement within that

day

Value – The amount in peso that was traded within

that day

Trades – The number of trade that was done within

the day.

Volume – The number of shares that was traded within

that day.

Bid – This represent the prices that a buyer willing

to purchase shares. You can see on the left that
price is much lower since buyer wants cheap price.

39 | P a g e
Ask – This represent the prices that a seller
willing to take. As you can see ask price are higher
than bid because seller wants to make most out of
it.

Below is the Market Schedule

40 | P a g e
 CHAPTER 4:
How to Choose Your
First Stock

41 | P a g e
Choosing your first stock

Blue chips are companies that compose the Philippine

Stock Exchange Index. They have a proven track
record and daily trades in high volume. Source
www.pesobility.com

I’ll list below the Stock Code and Name of company:

Symbol Name
AC Ayala Corporation
AEV Alliance Equity Venture,
Inc.
AGI Alliance Global, Inc.
ALI Ayala Land, Inc.
AP Aboitiz Power Corp.
BDO BDO Unibank, INc.
DMC DMCI Holdings, Inc.
GLO Globe Telecom, Inc.
GTCAP GT Capital Holding Inc.
ICT Int’l Container Terminal
JFC Jollibee Foods Corp.
JGS JG Summit Holdings, Inc.
MBT Metropolitan Bank and
Trust Company
MEG Megaworld Corp.
MER Manila Electric Company
MPI Metro Pacific Investments
Corporation
PCOR Petron Corporation
RLC Robinson Land Corporation
SM SM Investment Corporation
SMC San Miguel Corporation
SMPG SM Prime Holdings, Inc.
TEL Phil. Long Distance Tel.
URC Universal Robina Corp.
42 | P a g e
As a beginner you might choose two to three Blue
Chips Company. You might pick companies from
different sector and as advice avoid penny stock,
Stock that is worth centavos to P10.

See sectors in the Stock Market:

 Financials
 Industrial
 Holding Firms
 Property
 Service
 Mining and Oil

Other investor or beginner pick too much company and

they over diversify their portfolio account.

Diversification is good when Stock Market is going

up. To make it simple diversification is putting
your investment in several companies. This isn’t bad
unless you only have (3) to (5) companies. In my
experience the two companies might go well but the
other companies won’t. It’s much better if you pick
at least (3) and choose from different industry and
focus your investment only on those.

For example:

Banking Industry – BDO

Industrial – URC
Real Estate – SMPH

43 | P a g e
You can refer to their track record before picking
up stocks. Most of all pick blue chip companies for
long term investment as they are not the most risky.

Strategy you can follow

Peso Cost Averaging

This strategy is the most common and effective

strategy even you won’t “timing the market”.
Basically you can do this by investing a specific
amount of money every month in long term. If you
don’t have time to monitor price movement on a daily
or weekly basis then peso cost averaging is highly
recommended.

Consider the table above. It’s a (1) year investment

period from Jan 2015 to Dec 2015. Given that you are
investing P6,000 fix in a monthly basis. Each month
stock prices keep changing that can affect how much
shares you can buy. By the end of 2015 it just made

44 | P a g e
P48,000 profit if you sell your shares by this
month.

This chart best illustrate the table above. This is

what sidewinding chart looks like. As you can see
Stock price goes up and down in a monthly basis.

Take note of the advantage and disadvantage of cost

averaging:

 You don’t have to time the market when to buy.

Just buy regularly (Monthly, Quarterly, Semi-
annual, Annual) how much is depends to your
comfortable savings.
 When stock prices goes down, that means you can
buy more shares.
 If stock prices keep going up you can buy less
share at this point but good thing the value of
your share keeps going up.

45 | P a g e
For the best return, sell the stocks when you reach
your ideal price and investment objective.

Note: Not all companies go like in the above chart.

You have to do research to check its performance.

Selecting stock for cost averaging might take simple

glimpse on their historical chart. Again the past
performance doesn’t guarantees the future. In my
assessment you have to pick reputable companies to
invest in, a company that has solid track record
that was tested in time of crisis.

I’ll give you example of blue chip companies did in

the past years. If you did cost averaging with these
companies, you would have grown your investment.

This chart represents a (2) years performance. From

July 2011 to July 2013 both companies did very well
and from the left Universal Robina Corp (URC) grown
172.34% and Jollibee (JFC) 85.23% within this
period. If you invested with these companies long

46 | P a g e
time ago, your money would have grown compare from
bank interest.

Hint: If you do cost averaging look for chart that

is in an upward trend or upward trend in sidewinding
movement.

Above is Puregold (PGOLD), this is an example of an

upward trend chart. It keeps going up year after
year.

Above is Globe (GLO), this is an example of an

upward trend sidewinding chart. It does keeps going

47 | P a g e
up year after year but has some little down and
upward trend in a mix.

Buy and Hold Strategy

The best buy and hold strategy can be done if the

trend is in upward motion. Investor in this strategy
buy a big amount of share then hold it in a long
term period giving significant amount of return.

Even in a sudden fluctuation in prices, they will

just keep holding on until it bounces back in the
market.

Advantages of “Buy and Hold Strategy”

 Ease if execution: Since this technique requires

you a one-time selection of stock. There is no
need to monitor prices over time, or worry short
term market fluctuations.
 Eliminates Timing Decisions: This doesn’t
require you to “Time the market”. You can just
simply buy a share and hold it for a long period
of time.

48 | P a g e
  Efficiency: I mentioned earlier that broker has
commission on every transaction whether you buy
or sell and this strategy minimize too much cost
on your part.

Disadvantage

 Unlimited losses: Since you need to hold the

share for a long time, you don’t care about
news. Despite warnings that a company may be on
a verge of bankruptcy or financial crisis,
investor would continue to own the shares of
stock until they were worthless; therefore
losing the entire investment. You can reduce
this risk by selecting good reputable company.

 Risk Tolerance: During this market downturn, you

might panic and sell shares. In this type of
strategy you need a high risk tolerance to avoid
“buying high, and sell low”.

The type of strategy you’ll pick must be based on

your goals and lifestyle and risk profile. There is
no right or wrong strategy and it will depend on the
investor itself.

To address this issue just keep doing your own

investing and see what’s working for you.

49 | P a g e
 CHAPTER 5:
Overall Change

50 | P a g e
It is in you

The greatest asset you can have is yourself, not

your properties nor your money. Every one of us has
some inner good things, you just have to find and
let it loose. The only thing that is hindering us to
do something is because we have doubt, fear in
ourselves, and sometimes we listen to others people
opinion.

Motivation speaker Les Brown says on his story that

his mentor told him “Someone opinion of you does not
have to become your reality” that was the seed that
planted on his mind that made him work on his dream.

There is a story from Bangkok Thailand. It says in

1953 there were monks moving a large clay Buddha
from one side to make way for the road that was
coming through. As they lift the 10 feet heavy
Buddha using a crane a big crack went through it.
The head monk was scared and they lower it down and
he said he’ll see if there’s any damage to it.

When it started to rain they put cover in it to keep

it dry. That night as the monk came out to
flashlight the Buddha something reflected inside the
crack. He said “clay doesn’t reflect light there
might something else in there” and so the next
morning they chip away the clay to discover this
Golden Buddha.

Their best theory is monks 300 years ago put clay on

the Golden Buddha during war so no one could steal
it. As we reflected the story most people is like
the clay Buddha. The clay is the cover to every

51 | P a g e
people, the self-doubt, negative belief that they
are not enough and don’t deserve. As you imagine
that everyone has a Golden thing inside of us that
was just covered. Everything you need is just
within, you just have to trust yourself and chip
away the clay to discover who you really are.

Final Word

Everyone wanted a good life, having their dream in

the future and not everyone is lucky as the others
might be but as the person who seek and keeps on
working in themselves, it’s skies the limit of what
he can achieve.

Life teaches many things as long as you’re willing

to learn your failures and decide on keeping
standing up whenever you knocked down, success will
be attainable in different aspect in life.

I know it takes time to absorb every bit of

information about this book but if simple reading
would change your perspective about how money
works, hopefully you can pay this forward by
teaching this to other person who is seeking for it.

By doing this investment I learn few things not just

money. It teaches how you can be grateful to simple
things in life. People may have everything, money
and other perks in life but unhappy because they
lack to give the values to their family.

Use your wealth to create not to break.

52 | P a g e