by Nicasio Angelo Agustin
There are any number of ways for one to earn a living. The more traditional mode is to get employed and try to build on your chosen career. Climb up the career ladder and establish a name and grab each opportunity to get promoted until you reach the pinnacle of your career. Once employed, you get a good source of regular income to meet your daily needs. From available census data, however, most employed individuals do not earn as much as their annual increasing financial needs.
Going into business is sometimes seen as an option only for those who have enough build-up capital. But, as discussed in my previous article, there are several ways to raise the needed capital aside from extras and savings. Yet again, going into business would require great personal sacrifice and effort to make your business successful. And unless you are patient enough to wait for some period of time for your business to flourish, going into business may not be a good option after all.
One option which is hardly patronized by the ordinary Filipino is the stock market. The stock market, when played well, could double your money in no time at all. The pay back of most outstanding stocks is greater than the interest rates one earns from the usual bank deposits. Not very many know how to play or simply invest money in the stock market. There are valid reasons. One is the fact that stock market and how it operates is not widely promoted, except in business and commercial capitals of the country. Another reason is the perceived risk in stock market investments. Still another is the inaccessibility of stock markets.
Educating ourselves on the complexities and requisites of the stock market could then introduce us to the greater opportunities to earn more money for ourselves and our families.
Let me just share with you these simple thoughts on the stock market for whatever purpose they may serve you.
When one buys a “share” from the stock market, the money he or she pays goes to the corporation he or she bets on. In a sense, he or she becomes a part owner of that company, where the stock is technically a share of ownership of a corporation.
The stock market has two categories – the capital market and the money market. The capital market trades stocks and bonds which are known as long-term shares or “proof” of ownership or indebtedness in a company. The money market, on the other hand, trades securities in the form of treasury bills and commercial papers which are basically short-term notes or proofs. There are various terms used to refer to these “proofs” of part-ownership of corporations or shares, more specifically for securities. Each has distinct features of maturity but all of them yield the same result – more money for you, if you play them well, that is.
The first step then is to choose the corporation you are willing to ‘bet’ your money on. The market performance of the big corporations categorized by industry is regularly published in leading newspapers. The daily report on industry winners or gainers and losers should give you a good choice where to put your money on. Stock shares offered by these corporations are traded at the PSE Centre in Ortigas, Pasig City and PSE Plaza in Ayala, Makati City – where trading participants trade daily – from 9:30 a.m. to 12:10 p.m. except Saturdays, Sundays, legal holidays and days when the Central Bank Clearing Office is closed.
The next step is to choose your stockbroker who will do the trading for you. The PSE has a complete list and information on qualified and accredited stockbrokers and all its trading participants who are authorized to trade either equity or debt securities for you. They could even advise you on the corporation to invest in, at some period of time. Depending on how you approach them or how you deal with them, they could really help you “win” or “lose” in the stock market, if you get what I mean; then there is usually an upliftment fee you have to pay for his or her professional services.
Once you have your stockbroker, you can wait for developments on how your chosen corporation is performing. At any given time, you could either keep or sell your stock shares, or might even choose to buy more shares depending on the performance of your chosen corporation, or buy stock shares from other corporations depending on their performance. Foresight is always critical in winning in the stock market. It requires a good sense of appreciation and understanding of the economic and political environments – both local and international. And, if you have the guts and common sense plus the money, you will go a long way in stock market investments.
Feel free to send your comments to nic_agustin@yahoo.com.
