invest in a bank or the stock market?

In my opinion, many people from the Philippines have missed an investing opportunity that could increase their cash - be it capital or savings. Some even think that investing can only be done through savings or time deposit accounts in banks; aside from investing in a business - store, boutique, restaurant, or franchise. The avenue for investing that I am referring to is the Philippine Stock Exchange or the stock market. While some may have heard of the stock market, many have wrong notions about it. People think that it is very risky (although that is partly true) and can spell disaster for their hard earned cash. However, investing in banks do entail a level of risk and at some point worse than investing in the stock market.

Now, why am I sounding as if the stock market is the better option of investing over banks? Because in the long term, you can earn more in the stock market. Consider a savings account in a bank which earns an annual interest of 1% or a time deposit account which earns 5% per annum - if I had 10,000 pesos in the bank, after a year I have an additional 100 in my savings account and 500 in my time deposit account. Looking at it, the earnings are not that much.

In the stock market, on the other hand, one can earn as little as 20% annually; in some cases, some earn more than 200% of their invested amount - which spells, from an initial investment of 10,000 pesos to an additional 2,000 for 12% earnings and 20,000 for a 200% increase. Now that is much!

While this might seem very attractive, let me spoil it with the reality that its not easy to invest in the stock market because there are risks involved. However, the key to minimizing these risks is not expertise in how to trade, rather, an investor must develop the most important trait - discipline.

More on this in the coming posts...

thoughts on trading stocks

I have been preoccupied with a lot of things lately and have not been able to update this blog. Honestly, after my work, what has been keeping my busy was stock trading. I think this is really one of the things that I would be involved in for the next few years. Here are a few things that I have learned on stock trading:

First of all, it is not easy. I may have titled my last post as "trading stocks is easy" but the reality is, it is easy up to a certain point such as being reminded of the principle: buy low, sell high. However, knowing when to buy and when to sell is an entirely different matter. Stock trading requires that the trader continually reads and studies. There are a number of principles and disciplines that needs to be developed to become a successful trader. It would also help, for those who are interested in pursuing it, to have friends and people whom you can exchange ideas with. Doing it alone has greater risks than pursuing it with a company of traders. However, it should be remembered that to be a successful trader, you must develop your own strategies and principles, after all, it is your money you are trading and not your colleagues. So, it is one to consider their opinions but it is another to decide on your own according to your understanding and the principles you have developed.

For me, the key ingredients that are essential in succeeding as a trader include discipline and diligence.

trading stocks is easy

I have been reading a few materials related to stocks lately and have realized that a lot of people have no idea of the great opportunities in stock trading. Most people have preconceptions and myths that they have not really looked into and because of this, only a handful of people enjoy the benefits it can bring. I read in a book that stock trading is as easy as managing household finances. It has become difficult and intimidating for some because of its jargons. However, I cannot say much yet since I have been on it for a month and have only learned a few but I am positive that a year from now, I can say a lot of this about stock trading and its rewards. For now, I have to thoroughly learn the basics and all that is necessary for me to become an expert trader.

patience brings wealth

It has been almost a month since I started investing on the stock market and I have been learning a lot of things. But, the most important thing that I learned and continue to develop is patience. I have learned the value of waiting for investments to grow despite the varying opinions on the market. Time cannot always be an enemy. Time can be a friend and an asset to success and prosperity. Also, with patience I have learned to do more important things rather than stare at the charts the whole day. I thank God for my wife who continually reminds me to keep in touch with reality and not lose focus on things that are in need of much attention right now. After all, stock trading is a long term investment (especially with a small starting capital).

novice investor

It has been a week since I started investing in the stock market and I am a bit overwhelmed by the many things I needed to learn. However, I am also excited with it that I religiously wake up before the market opens and prepare myself before trading happens. When I think about it, ideas continue to fill and grow in my mind. I was glad though that I was not fully hooked into it since I needed to spend time with my real work and also with my commitment to the ministry. 

One of the discussions I had this week was related to passion and it is said of passion that it is something you can do with all enthusiasm and at times forget the passage of time while at it. So, is this my passion? Or is this only for a short time? If this is it then I need to really know my way around this. 

Personally, I find excitement and fun while investing in the stock market and I am hopeful that not only will we grow financially but that our country’s economy grow as well.