I was 19 when I started investing in the Philippine stock market...well, just some few months ago. And nope we're not talking about hundreds of thousands nor millions of pesos-- just a student-friendly budget yet.
Why Invest in the Stock Market now?
- To let your money work for you.
- Investing early means retiring early.
- Banks have really small interest rates per year.
PREREQUISITES
Aside from the required documents(which we will be discussing below), it is important to note the following:
BE SURE TO HAVE AN EXISTING EMERGENCY FUND. When we invest, we're looking at longterm goals, so imagine if an emergency happens which obliges you to withdraw your investments -- there's a high possibility that you won't get the exact amount of your investments back. This is because the prices in the stock market constantly fluctuates. So as much as possible, do not touch your investment.
INVESTMENT=LONGTERM. You have to emphasize to yourself that this is not a get-rich-quick scheme. Investing in the stock market requires investing small amounts of blue chip stocks every month for more than 10 years.
YOU ARE NOT A TRADER. If you've noticed, I used the term "investing" and not "trading". For most of us, we are no trader. Trading requires intensive trainings and knowledge about the factors affecting the global and local market as a whole. Trading is speculating. Trading involves risks that we cannot afford -- or at least for me.
APPLYING FOR AN ACCOUNT
Before you can participate in the Philippine stock market, you'll be needing an account from a stock broker. You can actually choose your preferred broker but for now, we will be going through my stock broker, COL Financial.
Unlike the traditional way of investing in the stock market where a middleman processes things on your behalf, COL Financial offers an online platform where you, yourself, can perform whatever you want on your account.
Choose an account type
First, you need to choose an account type.
Application Forms
- Customer Account Information Form (CAIF)
- Foreign Account Tax Compliance Act (FATCA) - TIN # required
Download All Forms
Additional Requirements
For Filipino Citizens:
- Photocopy of one (1) valid government issued IDFor Resident Foreign Citizens:
[1] Photocopy of one (1) valid government issued ID,
[2] Alien Certificate of Registration (ACR) or Work Permit from DOLEFor Non-resident Foreign Citizens:
- Authentication of a photocopy of one (1) valid passportFor In-Trust-For (ITF) Accounts:
[1] Photocopy of one (1) valid government issued ID of the parent,
[2] Birth Certificate of the minor applicant
For Filipino students who don't have at least 1 valid government issued ID, [1] a photocopy of your validated school ID will do as long as you include your [2] Certificate of Registration (COR) from your school and [3] a photocopy of your NSO Birth Certificate.
Students are also required for a TIN #. You can follow the steps here to apply for a TIN.
Submitting Forms & Requirements
Note: Before submitting the documents, scan and email it to them first at helpdesk@colfinancial.com so they can review and confirm that all requirements are correct and complete.
If they confirm, you may personally submit originally signed forms and clear ID documents to COL Financial (Office Hours: M-F, 8:30am to 5:30pm) or send them thru a courier. Use a standard letter envelope to avoid additional charges.
Their addresses are:
COL Business Center
2403B East Tower, PSE Centre,
Exchange Road, Ortigas Center,
Pasig City 1605, Philippines
(+632) 651 5888
Ground Floor, Citibank Tower,
Valero corner, Villar Streets,
Makati City 1227, Philippines
(+632) 478 2954
(+632) 478 3316
(+632) 478 3275
COL Investor Center - Davao
2nd Floor Robinsons Cybergate,
J.P. Laurel Ave., Bajada,
Davao City 8000, Philippines
(+6382) 287 8192
(+6382) 287 8193
(+6382) 287 8194
If you opt to send it thru a courier, a sales officer will review your application once they receive it. You will have to wait for 2-3 days for their confirmation email which includes an instruction to schedule a video conference call for information verification (so prepare the ID you've presented). The video conference will be done thru skype.
Funding your COL account
After a successful application, you'll be given a COL account which you'll be using in gaining access to the platform.
Now, it's time to fund your account. You are given three months to fund you account. If within those months you haven't, you will need to re-apply with new forms and IDs.
You can fund your account in four (4) different ways:
BPI
BDO
Metrobank
AUB
OVER-THE-COUNTER BILLS PAYMENT
BPI
BDO
Metrobank
AUB
OVERSEAS REMITTANCE
BDO Kabayan Bills Bayad
iRemit
BDO Overseas Remittance
COL BUSINESS CENTER
2403-B East Tower, PSE Centre
Exchange Road, Ortigas Center,
Pasig City, Philippines 1605
Once you successfully funded your account, an email will be sent to you by a COL representative confirming that your account has been activated.
BUYING YOUR FIRST STOCK
Since we are aiming for a longterm investment, we only buy blue chip stocks.
The term blue chip came from the popular game poker because blue chips have the highest value. Blue-chip stocks are stocks from large corporations or well-established companies that have operated for many years already. These companies are well-known, well- established and well-recognized as “Giants” because they usually come profitable and stable in spite of economic challenges thus making them not too volatile. Read More
You can find Philippine blue chip stocks here.
After deciding what stock/s to buy, you can then directly login to your COL account to execute your first purchase:
The basic things you should consider in buying a stock/s are:
- Board lot - the PSE uses a minimum Board Lot or round lot system that specifies the minimum amount of shares one can buy or sell. The minimum amount of shares will depend on the market price of the stock.
Ex. A market price of P3.00/share will allow you to buy/sell a minimum of 1,000 shares or in added increments of 1,000. Any order size below its Board Lot is known as an Odd Lot and can only be traded in the Odd Lot market. The Odd Lot Market may have different pricing schemes than the Main Market. Learn More
- Stock Quotes - it show you the willingness to buy and sell in a market.
A Bid (or buying) price represents the willingness for a buyer to purchase stock at that price.
The Ask (or selling) price represents the willingness of a seller to sell shares of stock at that price.
The size columns make reference to the number of shares that these buyers or sellers are posting to trade. Learn More
If you've noticed, I currently have insufficient funds on my account that's why the transaction wasn't successful. But basically, after clicking "Preview Order", you will be redirected to a page where you can review your order:
Then:
Congratulations!
You are now a shareholder of your chosen company! 😉
You are now a shareholder of your chosen company! 😉
GOLDEN RULES WHEN INVESTING IN THE STOCK MARKET
For months now, I've been following Bro. Bo Sanchez, a renowned author. According to his book entitled "My Maid Invests in the Stock Market And Why You Should, Too!", there are four (4) basic golden rules when investing in the stock market.
These are:
Rule #1: Invest Small Amounts Every Month for 20 Years or More
One-time commitment
Monthly Commitment
Rule #2: Invest Even When There’s a Crisis
Bro. Bo added that a crisis is a wonderful buying opportunity and this is the reason why we only buy the strongest companies.
"The “crashes” today are temporary dips. In fact, you should be happy that you’re buying your stocks at cheaper prices. One day, when the crisis is over, you’ll be happy you bought at such low prices." - Bro. Bo.
Rule #3: Invest Only in Giants
Again, here's the list of giants in the Philippine stock market ---> See more
Rule #4: Invest in Many Giants
I hope this has been helpful in encouraging you
to start taking your baby steps to financial freedom!