Basic considerations in investing in the stock market

1. STOCK INVESTING 101
• ALTERNATIVE CLASS BY PROF. BERNADETTE C. RAMOS, CPA, MBA
• FEU MANILA

3. THE INFLATION EFFECT
NOW200
PESOS
AFTER 12 YEARS…
AFTER 24 YEARS… AFTER 36 YEARS…

4. WHY INVEST?
•GROW MONEY
•BEAT INFLATION
•FINANCIAL INDEPENDENCE

5. WHERE TO INVEST?
• Stocks
• Bonds
• Bitcoins
• Forex
• Mutual Funds
• Unit Investment Trust Funds
• Insurance
• VUL
• Real Estate
• Collectibles/Valuables
5

6. WHAT IS A STOCK MARKET?
•IN THE STOCK MARKET, PEOPLE BUY AND SELL SHARES OF
COMPANIES LIKE PLDT, AYALA LAND, MERALCO, AND MANY MORE.
•PSE, NYSE. NASDAQ, DOW JONES, JAPAN EXCHANGE GROUP,
SHANGHAI STOCK EXCHANGE, ETC.

7. WHY INVEST IN A STOCK
MARKET?
•IN THE STOCK MARKET, YOU CAN BECOME A PART-OWNER OF
SOME OF THE BIGGEST COMPANIES IN THE PHILIPPINES..
•ALTERNATIVE INVESTMENTS LIKE BONDS, REAL PROPERTIES
MIGHT NOT BE AS ATTRACTIVE AS INVESTING IN STOCKS

8. HOW TO EARN IN INVESTING
IN STOCKS?
•EARNINGS THROUGH PRICE APPRECIATION.
•EARNINGS THROUGH DIVIDENDS

9. AC IN 1985 IS ONLY P1.19 NOW IT’S P802

11. INTERESTED? HERE’S HOW YOU
CAN GET STARTED?
•STEP 1: KNOW WHAT YOU’RE GETTING INTO.
- VIRTUAL TRADING PLATFORM. (TO LEARN TECHNICAL ANALYSIS)
- STUDY FUNDAMENTALS OF COMPANIES YOU LIKE TO INVEST (PSE
EDGE, COMPANY WEBSITE,INVESTAGRAMS, BUSINESS NEWS.ETC)

12. INTERESTED? HERE’S HOW YOU
CAN GET STARTED?
•STEP 2: FIND A RELIABLE STOCK BROKER.
- TRADITIONAL.
-ONLINE (COL, FMSBC, BPI TRADE, BDO NOMURA, ETC.- LOCAL
STOCKS
-E-TORO

13. TOP STOCK BROKER

14. INTERESTED? HERE’S HOW YOU
CAN GET STARTED?
•STEP 3: OPEN AN ACCOUNT
•1. A PROPERLY FILLED UP APPLICATION FORM, WHICH YOU
CAN GET FROM THEIR OFFICE OR WEBSITE
•2. TWO VALID GOVERNMENT ID’S, LIKE A PASSPORT OR
DRIVER’S LICENSE
•3. YOUR TAX IDENTIFICATION NUMBER (TIN)

15. DONE?
•DEPOSIT & START INVESTING

16. BULL MARKET & BEAR MARKET

17. HOW TO PICK A GOOD STOCK
•FUNDAMENTAL
•TECHNICAL

18. FUNDAMENTAL ANALYSIS
HOW ?
•STEP 1: USE THE FINANCIAL RATIOS FOR INITIAL SCREENING.
•STEP 2: UNDERSTAND THE COMPANY.
•STEP 3: STUDY THE FINANCIAL RESULTS OF THE COMPANY.
•STEP 4: CHECK THE DEBT AND RED FLAGS.
•FIND THE COMPANY'S COMPETITORS.
•STEP 6: ANALYZE FUTURE PROSPECTS.

19. TECHNICAL ANALYSIS
IN FINANCE, TECHNICAL ANALYSIS IS AN ANALYSIS METHODOLOGY
FOR FORECASTING THE DIRECTION OF PRICES THROUGH THE
STUDY OF PAST MARKET DATA, PRIMARILY PRICE AND VOLUME.
BASIS OF ENTRY AND EXIT.

21. DIFFERENT TYPES OF STOCKS
•BLUE CHIP STOCKS (INDEX FUND) – EXPENSIVE, LOW RISK
•SPECULATIVE STOCKS(PENNY STOCKS) – CHEAP, HIGH RISK
•GROWTH STOCKS – LOW DIVIDENDS
•VALUE (BARGAIN) STOCKS – UNDERVALUED STOCKS CONSIDERING
PRICE TO BOOK VALUE, ETC.
•INCOME STOCKS – BLUE CHIPS, HIGH DIV.

22. TERMINOLOGIES
 BULLISH – USED TO DESCRIBE A PARTICULAR STOCK MARKET OR STOCK WHEN ITS VALUE IS GOING UP
 BEARISH – USED TO DESCRIBE A PARTICULAR STOCK MARKET OR STOCK WHEN ITS VALUE IS GOING DOWN
 INITIAL PUBLIC OFFERING (IPO) – WHEN FIRMS ARE SELLING THEIR COMPANY SHARES FOR THE FIRST TIME
IN THE PUBLIC TO RAISE CAPITAL.
 VALUE INVESTING – AN INVESTMENT STRATEGY WHERE INVESTORS LOOK FOR UNDERVALUED STOCKS
 GROWTH INVESTING – AN INVESTMENT STRATEGY WHERE INVESTORS LOOK FOR COMPANIES WHICH HAVE
A HIGH GROWTH POTENTIAL
 LONG POSITION – A “LONG” OR “LONG POSITION” IS THE BUYING OF A SECURITY SUCH AS A STOCK,
COMMODITY OR CURRENCY WITH THE EXPECTATION THAT THE ASSET WILL RISE IN VALUE.
 SHORT POSITION – A “SHORT”, “SHORT POSITION”, OR “SHORT SELLING” IS A TRADING STRATEGY WHERE
THE INVESTOR SELLS SHARES OF BORROWED STOCK IN THE OPEN MARKET. THE EXPECTATION OF THE
INVESTOR IS THAT THE PRICE OF THE STOCK WILL DECREASE OVER TIME, AT WHICH POINT THE HE WILL
PURCHASE THE SHARES TO REPLACE THOSE THAT HE INITIALLY BORROWED.

23. REALITY OF THE STOCK MARKET?
•IF THERE ARE WINNERS, FOR SURE THERE ARE
LOSERS.

24. HOW TO MAKE INVESTING IN STOCK SAFE?
• FUNDAMENTALS AND TECHNICALS AGAIN.
• INVEST EXCESS FUNDS ONLY.
• BUY IN TRANCHES – 8K RULE
• BUY LOW, SELL HIGH
• MENTAL AND EMOTIONAL PREPARATION.
• CONSTANT MONITORING.
• NO FOMO, NO TO HYPE.