Why You Should Invest In The Stock Market - Part 1
Previously, I wrote a comprehensive introduction on how to invest in the Philippine stock market. The basic principles that each prospective investors should understand was extensively discussed. Here, the advantages of investing in the stock market, will be tackled.
I have stated before that the stock market is just another vehicle of investment. A good question to ask yourself is why should you choose to invest in the stock market. What advantage would you get in investing in the stock market ?
The question could probably be best answered by the following. Be advised that the examples given refer to Philippine based companies and currency. Should you wish to view the article in its entirety please visit my blog.
1.) The allure of great returns - Most financial expert would tell you that in a bull run the market really goes up. Average returns could be as low as 30 % and as high as 200 %+ per annum or even more. Profit is always expected when you invest in the long term. For example, In 1997, the Globe Telecom Inc. (GLO) stocks price per share was only P152.00. during that time you only spend P 1,520.00 to buy the minimum board lot which is 10 shares. Currently the price per share of Globe is P 1,620.00+. The value of those 10 shares that you previously bought is right now P 16,200, meaning in ten years time your money has grown ten times. This is translated to an average of 30 % return per annum. This is far better than putting your money in a time deposit account at less than 4 % per annum. It is interesting to note that the Philippine stock market is at its highest these days. For the next 2 to 3 years, they say the market will still be in a bull run. Make the best out of this situation.
2.)"Ownership" in the companies that you are investing in. - Wouldn't it be so cool to have your own Jollibee franchise ? However the investment of 20 to 25 million pesos does not make it so cool considering that you also have to put in time and effort to run the store. So instead of owning a Jollibee franchise why not buy Jollibee instead through buying shares of stocks in the corporation ? The minimum board lot of JFC shares (Jollibee Foods Corporations - JFC) cost only P 5,000+. With this investment you indirectly own the more than 1414 stores in the Philippines and 175 in other countries not to mention Red Ribon, Chowking, Deli-France, A popular fastfood chain - Yonghe King in China and popular teahouse chain from Taiwan called Chun Shui Tang including Jollibee's pilot restaurant "Tio Pepe's Karinderia." So next time you eat at Jollibee tell your friends and that you like to eat there because you "own part of the company." You might want to own stocks of PLDT or Globe to help you become more prompt in paying your bills.
3.) You belong to a special group of people when you invest in the stock market -
Every time I am asked to join a multi-level marketing scheme, I want to know when the company started. I believe that if the company started a long time ago, I will have lesser chance of recruiting other people since most people that I know has already been recruited.
Investing in the stock market may not be the same as engaging in mutli-level marketing as it does not matter whether the market is saturated or not. However it is always so much better to have the knowledge that we are among the first people to "mine" out the gold in the stock market.
Most of those who invest in the stock market are from the class A and B segments of the population. An Asian Development Bank study done in 2005 revealed that only 600,000, out of the of the country's 87 million population, invest in the stock market. This means that only 0.7 % of the population are involved in stock market trading. - 23310
I have stated before that the stock market is just another vehicle of investment. A good question to ask yourself is why should you choose to invest in the stock market. What advantage would you get in investing in the stock market ?
The question could probably be best answered by the following. Be advised that the examples given refer to Philippine based companies and currency. Should you wish to view the article in its entirety please visit my blog.
1.) The allure of great returns - Most financial expert would tell you that in a bull run the market really goes up. Average returns could be as low as 30 % and as high as 200 %+ per annum or even more. Profit is always expected when you invest in the long term. For example, In 1997, the Globe Telecom Inc. (GLO) stocks price per share was only P152.00. during that time you only spend P 1,520.00 to buy the minimum board lot which is 10 shares. Currently the price per share of Globe is P 1,620.00+. The value of those 10 shares that you previously bought is right now P 16,200, meaning in ten years time your money has grown ten times. This is translated to an average of 30 % return per annum. This is far better than putting your money in a time deposit account at less than 4 % per annum. It is interesting to note that the Philippine stock market is at its highest these days. For the next 2 to 3 years, they say the market will still be in a bull run. Make the best out of this situation.
2.)"Ownership" in the companies that you are investing in. - Wouldn't it be so cool to have your own Jollibee franchise ? However the investment of 20 to 25 million pesos does not make it so cool considering that you also have to put in time and effort to run the store. So instead of owning a Jollibee franchise why not buy Jollibee instead through buying shares of stocks in the corporation ? The minimum board lot of JFC shares (Jollibee Foods Corporations - JFC) cost only P 5,000+. With this investment you indirectly own the more than 1414 stores in the Philippines and 175 in other countries not to mention Red Ribon, Chowking, Deli-France, A popular fastfood chain - Yonghe King in China and popular teahouse chain from Taiwan called Chun Shui Tang including Jollibee's pilot restaurant "Tio Pepe's Karinderia." So next time you eat at Jollibee tell your friends and that you like to eat there because you "own part of the company." You might want to own stocks of PLDT or Globe to help you become more prompt in paying your bills.
3.) You belong to a special group of people when you invest in the stock market -
Every time I am asked to join a multi-level marketing scheme, I want to know when the company started. I believe that if the company started a long time ago, I will have lesser chance of recruiting other people since most people that I know has already been recruited.
Investing in the stock market may not be the same as engaging in mutli-level marketing as it does not matter whether the market is saturated or not. However it is always so much better to have the knowledge that we are among the first people to "mine" out the gold in the stock market.
Most of those who invest in the stock market are from the class A and B segments of the population. An Asian Development Bank study done in 2005 revealed that only 600,000, out of the of the country's 87 million population, invest in the stock market. This means that only 0.7 % of the population are involved in stock market trading. - 23310
About the Author:
Would you like to know more about investment strategies ? Visit the blog of Zigfred Diaz where he writes about several interesting topics such as investments, financial management, business, making financial online and Stock market investing
posted by Mr. Forex at
1:00 AM
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