Guide on How to Invest in the Philippine Stock Market

Step-by-Step Guide on How to Invest in the PSE or Philippine Stock Exchange

Step 0. Attend a Basic Stock Market Investment Seminar

This is not required but recommended, there are Free and Paid Seminars that you can attend, check colfinancial.com or pseacademy.com.ph for Free Seminars and pesosandsense.com for Paid Seminars.


Step 1. Choose a Stockbroker

You need a Stockbroker that is based in the Philippines, whether it is a live person that you know or an Online Stockbroker like COL Financial, you need to sign up with one. The Stockbroker should be authorized and licensed by the SEC or Securities and Exchange Commission and the PSE or Philippine Stock Exchange to trade securities.

Note: You can actually choose more than one stockbroker

Step 2. Open an Account with your Stockbroker

Let us take COL Financial as an example, here are the requirements to open an account from them
-Application Forms (CAIF, OSTA and Specimen Signature Cards)
-Photocopy of one (1) valid government issued ID (For Filipino Citizens)
-Billing Statement (Recent, no later than 3 months past) (For Filipino Citizens)
-Money for Investment (Entry-level account is P5,000 only)

For more info, please visit https://www.colfinancial.com/ape/Final2/home/open_an_account.asp

Submit the Applications Forms and Requirements to COL Business Center at 2403-B East Tower, PSE Centre Exchange Road, Ortigas Center, Pasig City, Philippines 1605.


Step 3. Add Funds into your Account

With COL Financial again as example, you can add funds in your account together with Step 2 at the COL Business Center or through Online Bills Payment or Over-the-Counter Bills Payment using BPI, BDO or Metrobank.

Step 4. Choose a Company or Stock that you like to Invest

This is the hardest part for most investors, which stocks are good to invest in. You can choose many different stocks to invest in depending on your available funds.

Here are some of the reasons why we invest in a certain stock:
-Recommendations from friends
-Recommendations from stockbrokers
-Because they just like the company (Ex. JFC because you or your family like eating in Jollibee)
-Recommendations from Clubs like the TrulyRichClub
-Own stock analysis
-Just a hunch

Here my personal guide questions in choosing stocks:
-Will the company last in the next 10-20 years?
-Does the company have growth potential in the next few years?
-Does the company give dividends?
-Will the stock potentially earn more than 20% each year?

Example:
Let us take a look at SM Prime Holdings or SMPH
-Will the company last in the next 10-20 years? Yes, I think SM Malls/Groceries will still be here in 20 years
-Does the company have growth potential in the next few years? Yes, SM is expanding not just in the Philippines but in China as well
-Does the company give dividends? Yes
-Will the stock potentially earn more than 20% each year? Yes, based on the Target Price of COL Financial

Note: Different analysts give different Target Prices for each stock

Step 5. Keep on Investing Monthly, Quarterly or as Frequently as possible

The goal actually is to acquire lots of shares of your chosen stocks as early as possible for long-term investment.

Tips to earn more from your Stocks
-If you have extra money, then add funds in your account (From 13th month pay or Bonus).
-If you earn dividends from a certain stock then re-invest the money earned by buying more shares.
-If Stock A is near its “Target Price” and Stock B is relatively cheap and way below the “Buy Below Price”, sell Stock A, then buy Stock B.
-Keep on learning by reading books and other blogs as well as attending seminars

Happy Investing!

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