Principles Of Investments In The Stock Market - Part 3
This is the third installment on the discussion about basic principles in stock market investing. In the previous articles, we discussed about the first three principles of investment. First, the stock market is just another vehicle of investment. Secondly, investing in the stock market is a roller coaster ride and thirdly, you must determine what type of investor you are. We continue with the next 4 principles in part 3 of this 4 part series. If you wish to view the entire article, please visit my blog.
4.) You must realize that investing in the stock market does not take a lot of money but if you really want to make an impact on your portfolio you have to place in a substantial amount. - You don't need millions or hundreds of thousands of pesos to invest in the Philippine Stock market. You only need at least P 20,000.00 to somehow play it out. I started out with only this amount. In fact you can invest if you only have P 10,000.00 but for me that is too small an amount. For example Jollibee (JFC) shares cost only 51.50 per share as of today. The board lot (which is the minimum amount of stocks that you could invest in) is 100. 51.50 x 100 = P 5,150.00. This is the only amount you need to be a stock holder of Jollibee. Let's say in 1 year time Jollibee stocks climbed to P 100.00 per share, you have gained P 5,000.00 more. But if you had invested 200 shares you could have gained more than just investing in 100 shares.
5.) Be consistent in your investment - Start small but do not stay small. You must have the discipline to consistently invest a certain amount of your income to the stock market. This way you can have more capital thereby growing your portfolio. Over the years, I have slowly added to my investment. I did not stay at P 20,000.00. The act of investing should become your habit, and I say it is a good habit to develop.
6.) Maximizing profit at the least possible losses. - Every time you see that the price of your stock went down, relax, the loss is only on paper. Actual loss is only attained when you sell your stock at the "losing" price. Therefore never sell at a loss. It should be emphasized that the money that you put into the stock market should not be taken from your emergency fund. It should by "surplus money." Putting in your emergency savings will result in you selling your stocks at a loss if you need the money badly. The gains you received in the stock market such as sales from stocks and dividends should be utilized to purchase more stocks to maximize your profits.
7.) You must realize that the stock market is not a get rich quick scheme - Don't ever expect to get rich overnight in the stock market. In all investment scheme always remember that money takes time to grow. Investments that give you unbelievable rates of return in a very short period of time are mere scams. The stock market, especially the Philippine stock market takes several months or even years in order for you to really profit. There may be times that it will just take weeks or days perhaps but these are rare occasions like when there is a consistent bull run that is going on or that there is an unusual drop or climb of prices in a short period of time. - 23212
4.) You must realize that investing in the stock market does not take a lot of money but if you really want to make an impact on your portfolio you have to place in a substantial amount. - You don't need millions or hundreds of thousands of pesos to invest in the Philippine Stock market. You only need at least P 20,000.00 to somehow play it out. I started out with only this amount. In fact you can invest if you only have P 10,000.00 but for me that is too small an amount. For example Jollibee (JFC) shares cost only 51.50 per share as of today. The board lot (which is the minimum amount of stocks that you could invest in) is 100. 51.50 x 100 = P 5,150.00. This is the only amount you need to be a stock holder of Jollibee. Let's say in 1 year time Jollibee stocks climbed to P 100.00 per share, you have gained P 5,000.00 more. But if you had invested 200 shares you could have gained more than just investing in 100 shares.
5.) Be consistent in your investment - Start small but do not stay small. You must have the discipline to consistently invest a certain amount of your income to the stock market. This way you can have more capital thereby growing your portfolio. Over the years, I have slowly added to my investment. I did not stay at P 20,000.00. The act of investing should become your habit, and I say it is a good habit to develop.
6.) Maximizing profit at the least possible losses. - Every time you see that the price of your stock went down, relax, the loss is only on paper. Actual loss is only attained when you sell your stock at the "losing" price. Therefore never sell at a loss. It should be emphasized that the money that you put into the stock market should not be taken from your emergency fund. It should by "surplus money." Putting in your emergency savings will result in you selling your stocks at a loss if you need the money badly. The gains you received in the stock market such as sales from stocks and dividends should be utilized to purchase more stocks to maximize your profits.
7.) You must realize that the stock market is not a get rich quick scheme - Don't ever expect to get rich overnight in the stock market. In all investment scheme always remember that money takes time to grow. Investments that give you unbelievable rates of return in a very short period of time are mere scams. The stock market, especially the Philippine stock market takes several months or even years in order for you to really profit. There may be times that it will just take weeks or days perhaps but these are rare occasions like when there is a consistent bull run that is going on or that there is an unusual drop or climb of prices in a short period of time. - 23212
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Would you like to know more about investment strategies ? Visit the blog of Zigfred Diaz where he blogs about several interesting topics such as investments, financial management, business, making financial online and Stock market investing
posted by X - Men @ 1:58 AM
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