Strategy in Building and Multiplying wealth

A Personal Compilation by: nes2013

Market
Guide in
Basic Investing

Philippine Stock
 WH Y
INVEST?
Strategy in Building and Multiplying wealth

“Investing is the most

effective way to build
your personal wealth
and secure your
financial future”
 KNOW YOUR RISK PROFILE
Strategy in Building and Multiplying wealth

 WHAT IS YOUR INVESTMENT OBJECTIVE?

 Preservation of capital
 Regular income
 Growth in capital

 WHAT IS YOUR INVESTMENT HORIZON?

 Short term
 Medium term
 Long term

 WHAT IS YOUR INVESTMENT PERSONALITY?

- If you can’t sleep at night if in stocks, then it’s better for a
conservative type of investments..Money market, fixed income
instruments
 INVESTMENT INSTRUMENTS
Strategy in Building and Multiplying wealth

1. CASH AND MONEY MARKET INSTRUMENTS

 Savings account
 Time deposit
 Fixed income instruments
 Treasury bills
2. BONDS - are debt instruments that pay a
fixed interest within a specific period of
time and mature on a certain future date
3. STOCKS AND EQUITIES
 WH Y
Strategy in Building and Multiplying wealth

INVEST
in the
STOCK Market?

Stocks over the long-term provides greater

returns and protection against inflation
than other fixed-income instruments, such as
savings accounts, time deposits, government
securities, and bonds.
 W hen to 35
Starting Age
Annual Investment P 60,000.00
Years Investing 10 years

INVEST
Strategy in Building and Multiplying wealth

Total Investment P 600,000.00

Ending Value at age 65 P 23,380,269.00

Starting Age 40
Annual Investment P 50,000.00

in the Years Investing

Total Investment
10 years
P 500,000.00

STOCK P 9,900,128.00
Ending Value at age 65

Starting Age 45

Market? Annual Investment

Years Investing
P 50,000.00
10 years
Total Investment P 500,000.00
Ending Value at age 65 P 5,035,526.00
Note: examples are assumed to grow by 17% a year @ 3.5%
inflation rate

Keeping the money in good stock over long-term, then

reinvesting the dividend, will make your investment grow
exponentially.
Investing early is the best way in securing the future..
 6847.47
+ 32%
5107
 What are Stocks?
Strategy in Building and Multiplying wealth

Stocks are shares of ownership in a

corporation.

When you buy stocks of a publicly listed

company, you become a stockholder or
shareholder of a company.

You become a part-owner of that company. As

an owner, you participate in that company's
growth and future profits.

You may also lose if the company suffers a loss

or performs below market expectations.
 Types of STOCKS
Strategy in Building and Multiplying wealth

Common stock Ordinary shares

Preferred stock Preference shares

According to Ownership

Class A Filipino Investors

ONLY
Class B Filipino and Foreign
 Interest rate risk
If interest rates rise:
Strategy in Building and Multiplying wealth

------ the prices at which the assets

of the Fund can be sold may fall. The
longer the maturity of the assets, the
more sensitive the prices of the
assets will be to changes in interest
rates. In other words, a long-term
investment (e.g. 5-year Retail
Treasury Bond) will have higher
interest rate sensitivity than a short-
term investment (e.g. 365-day
Treasury Bill
 STOCK Market Risk
Strategy in Building and Multiplying wealth

Investing in shares of stock is generally riskier because

of the volatility of the stock market.

1. Changes in prices
2. The performance of the companies whose shares are
included in the portfolio of the Fund are very much
dependent on the people behind those companies
3. Stock prices are sensitive to political and economic
conditions that normally change from time to time.

Action : Diversification of the stockholdings (not only

in terms of the number of stocks but also in the
different sectors and industries) of the portfolio
will be done to reduce its impact.
 What are the costs of trading?
Strategy in Building and Multiplying wealth

TYPES of FEES Amount

1. Stockbroker's commission 0.25% to 1.5% of transaction
plus 12% Value-added Tax on amount or a minimum of
commissions* Php20.00, whichever is
higher

2. Clearing Fee 0.01% of transaction

amount
3. PSE Transaction Fee 1/200 of 1% of transaction
amount
4. Stock transaction tax 0.5% of transaction amount

BUY 0.3% of GROSS Note: *Varies depending on

stockbrokers' fee structure
SELL 0.8% of GROSS
 EARNING DIVIDENDS
Strategy in Building and Multiplying wealth

Profit sharing with shareholders made either in

Cash, Stock or a combination of both.
CASH DIVIDEND
• -Money given back to
the investor as his
share of distributed
profits.
• Ex. Cash div of
200/share: if I had
1000 shares, I would
get P200.
STOCK DIVIDEND
• -Additional shares given
to the shareholder
• Ex. Stock div of
100%: if I had 100
shares, I would get
100 additional shares;
share price will adjust
down by:
• price /2 (P=value/(value
+Div))

• Ex-Date - the cut off point for dividend entitlement is a day before this
date (you must be a shareholder as of the day previous to this date)

• Date Payable - the day when the dividend is given to shareholder (usually
a month after the Ex-date)
 PRICE IMPACT!
Strategy in Building and Multiplying wealth

POSITIVE IMPACT TO PRICE: NEGATIVE IMPACT TO PRICE:

• Growth in • Deterioration in Growth

Income/Value of Income/Value or a
• Prospective Story for loss
business expansion • No Story, no dividends,
• Buyouts no nothing...
• worthy Dividends • Uncontrollable debts
• Inefficiency / poor
performance
 What is a STOCK
Strategy in Building and Multiplying wealth

Market?

A stock market is a place where

stocks are bought and sold. The
Philippine stock market is the
place where people can invest in
'publicly listed‘ companies in the
Philippine Stock Exchange (PSE).
 The PSE Composite Index (PSEi)
is a fixed basket of thirty (30) common stocks of
Strategy in Building and Multiplying wealth

listed companies, carefully selected to represent

the general movement of the stock market. The
benchmark measuring the performance of the
Philippine stock market.

Companies should meet three (3) criteria to qualify under the

PSE index
1. 12% Free Float Level
2. The company must rank among the top 25% in terms
of median daily value in nine out of the twelve-
month period in review.
3. Ranking of TOP 30 qualified companies based on
full market capitalization.
 Stocks listed and traded on the PSE are classified into
six (6) sectors:
Strategy in Building and Multiplying wealth

1. Financials Sector
2. Industrial Sector
a. Electricity, Energy, Power, and Water
b. Food, Beverage, and Tobacco
c. Construction, Infrastructure, and Allied Services
d. Chemicals
e. Diversified Industrials

3. Holding Firms Sector

4. Property Sector
5. Services Sector
 Stocks listed and traded on the PSE are classified into six
(6) sectors:
Strategy in Building and Multiplying wealth

--cont--
5. Services Sector – includes companies
involved in the following:
a. Media
b. Telecommunications
c. Information Technology
d. Transportation Services
e. Hotel and Leisure
f. Education
g. Diversified Services

6. Mining and Oil Sector

 PSE index 2013
No. Company Stock Code Adjusted Float Level (in %}
1 Ayala Corporation AC 38.0
Strategy in Building and Multiplying wealth

2 Aboitiz Equity Ventures, Inc. AEV 44.0

3 Alliance Global Group, Inc. AGI 40.0
4 Ayala Land. Inc. ALI 49.0
5 Aboitiz Power Corporation AP 20.0
6 BDO Unibank, Inc. BDO 43.0
7 Belle Corporation BEL 44.0
8 Bloomberry Resorts Corporation BLOOM 29.0
9 Bank of the Philippine Islands BPI 47.0
10 DMCI Holdings, Inc. DMC 28.0
11 Energy Development Corporation EDC 50.0
12 First Gen Corporation FGEN 33.0
13 Globe Telecom, Inc. GLO 22.0
14 International Container Terminal Services, Inc. ICT 49.0
15 Jollibee Foods Corporation JFC 40.0
16 JG Summit Holdings. Inc. JGS 32.0
17 Metropolitan Bank & Trust Company MBT 49.0
18 Megaworld Corporation MEG 34.0
19 Manila Electric Company MER 13.0
20 Metro Pacific Investments Corporation MPI 41.0
21 Manila Water Company. Inc. MWC 66.0
22 Petron Corporation PCOR 17.0
23 Philex Mining Corporation PX 32.0
24 Robinsons Land Corporation RLC 39.0
25 Semirara Mining Corporation see 28.0
26 SM Investments Corporation SM 39.0
27 San Miguel Corporation SMC 15.0
28 SM Prime Holdings, Inc. SMPH 30.0
29 Philippine Long Distance Telephone Company TEL 50.0
30 Universal Robina Corporation URC 39.0
 How are stocks traded?
Strategy in Building and Multiplying wealth

1. Place your buy or sell order directly

through online trading account
2. The Stockbroker or trading participant
(TP) transmits the order electronically
to the PSE
3. Upon placement of a buy or sell order,
your stockbroker will give you a
confirmation receipt as proof of your
trade.
 PRICE

Price,
Period,
Volume

TIME Period

VOLUME
 2009-2013 Historical Price Appreciation - selected
STOCK Apr-09 Mar-12 LAST Mar-12 Todate 2009-2013
TEL 2165 2700 2988 10.67% 38.01%
Strategy in Building and Multiplying wealth

Disclaimer: SECB 33.5 143 182 27.27% 443.28%

Past MER 87.5 262 326.6 24.66% 273.26%
performan MBT 26.5 87.3 117 34.02% 341.51%
ce doesn’t JGS 2.9 30.5 42.5 39.34% 1365.52%
guarantee AC 204 406 566 39.41% 177.45%
that you’ll SMPH 7.3 13.5 19.1 41.48% 161.64%
have the ICT 12.75 65 92.1 41.69% 622.35%
exact same BPI 35 74 110 48.65% 214.29%
results in RLC 4.35 16.5 25.5 54.55% 486.21%
the future. ALI 5.7 20.7 32.7 57.97% 473.68%
After all, AGI 1.52 12.6 21.15 67.86% 1291.45%
your BDO 25 53.13 89.75 68.93% 259.00%
earnings SM 198 660 1115 68.94% 463.13%
all depend MWC 11.25 23.2 40 72.41% 255.56%
on the URC 6.4 63 113 79.37% 1665.63%
market’s FGEN 22 13.5 24.75 83.33% 12.50%
performan PGOLD - 20.4 40.05 96.32% IPO 2012
ce.) EEI 1.18 6 13.1 118.33% 1010.17%
PIP 0.92 2.7 6.28 132.59% 582.61%
RFM 0.24 2 4.72 136.00% 1866.67%
LTG 2.5 3.8 17.84 369.47% 613.60%
APM 0.0055 0.016 0.159 893.75% 2790.91%
Alliance Global + 67.8 %

4yrs = + 473 % PHP 12.6

PHP 21.15
Metrobank + 34 %
87
4yrs = + 341 %

117
JG Summit + 39 %

4yrs = + 1,365 % 30.5

42.5
Ayala Corp
39 %
4yrs = + 177 %

PHP 566
PHP 406

REF : COL
SM Prime + 41 %

4yrs = + 161 % 13.5

19
ICTSI + 41.6 %
65

4yrs = + 622 %
92
BPI Bank + 48.6 %

74
4yrs = + 214 % 110
Robinson Land + 54.5 %
16.5

4yrs = + 486 % 25.5

Ayala Land
Ayala Land + 57.9 % 32.7

4yrs = + 473 % 20
Alliance Global + 67.8 %

12.6
4yrs = + 1,291 %

21.15
BDO Unibank + 68.93 %

89.75
4yrs = + 259 % 53.13
SM Investments + 67.8 %

660 1115
4yrs = + 463 %
Manila Water + 72 %
40
4yrs = + 255 % 23.2
Univ Robina + 79.3 %
63
113
4yrs = + 1,665 %
First Gen + 83 %

4yrs = + 12.5 %

13.5 24.75
Meralco + 24.6 %
262 326.6
4yrs = + 273 %
Strategy in Building and Multiplying wealth

If luck was with you…next pls..

EEI Corp + 118 %

4yrs = + 1010 % 6
13.1
Pepsi
+ 132.5 %

4yrs = + 582 % 6.28

2.7
RFM Corp

2
4yrs = + 1,886 %
4.72
+ 136 %
Lucio Tan Group 17.84

+ 369.4 %
4yrs = + 613 %
3.8
Alcorn Gold

4yrs = + 2, 790 % + 893.75 %

0.159

0.016
Strategy in Building and Multiplying wealth

The Troubled Mining…..

Dizon 45.8

- 77 % 10.28
Lepanto Mining

1.5
- 29 %
1.05
4yrs = + 1,414 %
Philippine Mining Corporation
17.2

- 15 %
21

4yrs = + 218 %
Strategy in Building and Multiplying wealth

IPOs & Rumors

DNL Industries

IPO: 12- Dec -2013 @ 4/s

6.99
4.3
+ 74 %
MEDco

+ 122 %
0.27

0.6
 NOTES on IPOs
Strategy in Building and Multiplying wealth

1. The blackout rule restricts

brokers from giving
recommendations
2. One-sided information
(underwriter)

HOW TO CHOOSE A GOOD IPO:

 LOOK at the Business

Prospects
 OBSERVE whether people
are talking about it
 INVESTMENT Guidelines
 Start to save as much as you can as soon
Strategy in Building and Multiplying wealth

as you can.
 Be sure that the money you will invest in
the stock market is an amount that you
can set aside for long-term investment.
 Know your investments. Understand
more about the company you are looking
to invest in.
 Do not put all your eggs in one basket.
Try to maintain a portfolio of at least three
to five good stocks.
 Plan your trade and trade your plan.
 METHODS of Investing
Strategy in Building and Multiplying wealth

PESO COST Averaging Market Timing

• Gradual HOLD & • Trading Thru
BUY Strategy.. Technical Analysis
• BUY LOW & SELL
1. Invest monthly for HIGH Strategy
Long term. • Take Advantage of
2. Invest only in Big Market Fluctuation.
Companies • Defining Entry & Exit
3. Invest even when Points
there’s a crisis.
 PESO Cost Averaging
Strategy in Building and Multiplying wealth

BUY
STOCK DATE PRICE PRICE YOUR TARGET EXPECTED
BELOW
SYMBOL BOUGHT BOUGHT TODAY RETURN PRICE GROWTH
PRICE

AC Oct-12 440 444 0.91% 452.17 520 18.18%

AC Nov-12 444 444 0.00% 452.17 520 17.12%

TOTAL 0.45% 17.65%

AP Jun-11 29.78 34.75 16.69% 31.05 33.59 12.79%

AP Jul-11 31.80 34.75 9.28% 31.05 33.59 5.63%

AP Aug-11 29.90 34.75 16.22% 31.05 33.59 12.34%

AP Sep-11 29.80 34.75 16.61% 31.05 33.59 12.72%

AP Oct-11 29.95 34.75 16.03% 31.05 33.59 12.15%

AP Nov-11 29.85 34.75 16.42% 31.05 33.59 12.53%

AP Dec-11 29.95 34.75 16.03% 31.05 33.59 12.15%

AP Jan-12 29.80 34.75 16.61% 32.22 37.06 24.36%

AP Feb-12 30.25 34.75 14.88% 33.21 38.19 26.25%

AP Oct-12 33.00 34.75 5.30% 33.21 38.19 15.73%

TOTAL 14.41% 14.67%

BPI Feb-12 68.45 85.30 24.62% 69.57 80.00 16.87%

BPI May-12 67.00 85.30 27.31% 69.57 80.00 19.40%

BPI Jun-12 67.85 85.30 25.72% 79.13 91.00 34.12%

TOTAL 25.88% 23.47%
 TOP 10 winners of TRC
Strategy in Building and Multiplying wealth

STOCK TIME YOUR

STOCKS TIME RECOMMENDED PRICE RANGE
SYMBOL HELD RETURN

Lepanto LC Dec 2010 to May 2011 5 Months P0.34 to P0.85 150%

Jollibee JFC Mar 2010 to May 2011 14 Months P47.50 to P94.45 98%

Security Bank SECB Mar 2010 to May 2011 14 Months P53.00to P96.20 81%

DMCI DMC Sep 2010 to May 2011 8 Months P27.25 to P44.80 64%

Int'l
ICT Sep 2010 to May 2011 8 Months P32.40 to P48.70 50%
Container

First Gen Co. FGEN Mar 2010 to May 2011 14 Months P9.80 to P14.78 50%

Mega world MEG Jul 2010 to May 2011 10 Months P1.54 to P2.30 49%

Nickel Asia NKL Oct 2010 to May 2011 8 Months PI 5.00 to P22.40 49%

Ayala Land ALI Mar 2010 to May 2011 14 Months P11.25 to P16.64 47%

Energy Dev't
EDC Mar 2010 to May 2011 14 Months P4.85 to P6.49 33%
Co.
Strategy in Building and Multiplying wealth

Spotting a Trend
Strategy in Building and Multiplying wealth

Trend in Time
Strategy in Building and Multiplying wealth

Technical Indicator - MA
 Fundamental Guide in
Picking a Stock
Strategy in Building and Multiplying wealth

G- ROWING INDUSTRY
E- ARNINGS VISIBILITY / PREDICTABILITY
M-ANAGEMENT CREDIBILITY
S- UPERIOR PRODUCTS OR SERVICES
S- TRONG BALANCECSHEET

By COL
 Strategy in Building and Multiplying wealth

By COL
 Easy Investment Plan Stock List
STOCK STOCK NAME
Strategy in Building and Multiplying wealth

AC AYALA CORPORATION
ALI AYALA LAND, INC.
AP ABOITIZ POWER CORPORATION
BDO BDO UNIBANK, INC.
BPI BANK OF THE PHILIPPINE IS
DMC DMCI HOLDINGS, INC.
EDC ENERGY DEVELOPMENT CORP.
ICT INT`L CONTAINER TERMINALS
JFC JOLLIBEE FOODS CORPORATIO
MBT METROPOLITAN BANK & TRUST
MPI METRO PACIFIC INVESTMENTS
MWC MANILA WATER COMPANY, INC
SM SM INVESTMENTS CORPORATIO
SMPH SM PRIME HOLDINGS, INC.
TEL PHIL. LONG DISTANCE TEL.
URC UNIVERSAL ROBINA CORPORAT
 Stock-Picking Strategies:
Strategy in Building and Multiplying wealth

PRICE
• Actual Value or the real value to which a
stock can be said to be worth.
• Market (Price) Value or that value
determined demand and supply

Market Analysis:
• Fundamental Analysis – Studies Actual Value
 Look for cheaply stock (low PER & higher EPS )
 Earnings (profitability is increasing)
 New developments of products

• Technical Analysis – Studies Price, select stocks by

analyzing statistics generated by past market
activity, prices and volumes (Charting).
Price action, Charts, Spot Trends
 Investor’s Biggest
Mistakes
Strategy in Building and Multiplying wealth

1. Emotion
2. Failing to Diversify
3. Buy on Rumors

“Every day that you remain non-invest is a one that

you can’t make more money”

“WE’RE NOT HERE TO BUY MEDIOCRE STOCKS.

WE’RE HERE TO BUY GREAT BUSINESSES.”

Juanis Barredo COL CFA

 Strategic Tips for Success
Strategy in Building and Multiplying wealth

 Don’t run with all the amateurs

 Don ‘t ever trade with money that
you can’t afford to lose
 Never get into a trade that has a
poor risk-to-reward ratio
 Get out of the trade as soon as you
realize the odds are against you
 Online Stock Brokers
Strategy in Building and Multiplying wealth

COL Financial
www.colfinancial.com
First Metro Securities Brokerage Corp.
www.firstmetrosec.com.ph
BPI Securities Corporation
www.bpitrade.com
Accord Capital Equities Corporation
www.philstocks.ph
AB Capital Securities, Inc.
www.abcapitalonline.com
RCBC Securities, Inc.
www.rcbcsec.com
F. Yap Securities, Inc.
www.2tradeasia.com
Strategy in Building and Multiplying wealth
Strategy in Building and Multiplying wealth
Strategy in Building and Multiplying wealth
Strategy in Building and Multiplying wealth
Strategy in Building and Multiplying wealth
 References
Strategy in Building and Multiplying wealth

http:// www.pifa.com.ph

http://www.pseacademy.com.ph/

https://www.colfinancial.com/ape/Final2/home/new_t
o_investing.asp

http://www.bsp.gov.ph/

http://fami.com.ph

http:// trulyrichclub.com

http:// www.pse.com.ph
A Personal Compilation by: nes for nesVentures Holdings 2013
 Strategy in Building and Multiplying wealth

A Personal Compilation by: nes 2013