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Friday, February 28, 2014

A beginners guide to buying Philippine stocks using CitisecOnline (COL) (2)

 Part 2 of 2

"Fear"-ther questions ( I know you are still afraid and want more information):

How much cash do I really need on a regular basis?
It depends on what companies you have set your heart out on buying. Basically, you just need enough to buy 1 boardlot of  the company you intend to buy. For SMC (San Migue Corporation) which costs between Php 55-Php60 per share, the minimum boardlot is 10, so that adds up to just around Php600. A bigger company like Globe (GLO) costs around Php 1500 per share with a minimum boardlot of 5 shares, so you'd need a minimum of Php7500-Php8000 per transaction. For other companies like ABS-CBN (ABS) and JG Summit Holdings (JGS), the minimum boardlot is 100 shares, so that will cost a minimum of between Php 4000-Php5000 per transaction.

Am I required to attend seminars?
No, it is not a requirement. The free COL seminar on EIP is part-FYI and part-marketing. They basically just introduce the concepts and why buying stocks is advantageous over bank savings, and other  investment instruments such as UITFs (mutual funds), treasury bills, bonds, and etc. If you have set your heart out on investing, you no longer need this to build on your belief and help you decide.

For those still interested in the seminars, check out their schedules here. It is usually held on Mondays and Thursdays. If you don't have time yet but are still very curious about the free EIP seminar, you can download my .AMR recordings here: COL EIP 1 || COL EIP 2 || COL EIP 3

How profitable is buying stocks?
Think about this: if you're 25 years old right now and you invest Php5,000 monthly for the next 10 years only, your total investment will be Php 640,000. By your retirement, at age 65, this would have grown to more than Php 20M. If you're 35 right now and invest the same amount over the same period of time, your Php 640,000 will at least earn you more than Php7M for your retirement plans. If you're 45, the same Php 640,000 will earn you more than Php3M. Not bad right?


Actually that's a good way to think of your stocks- as a retirement fund. It is like depositing money in the bank for your senior years but instead of being "lugi" because of taxes and inflation, your savings actually earns an average of 16% return on investment (ROI), not counting the dividends that you can also get if the company pays their shareholders dividends too.

Are there any risks in buying stocks?
Yes, as in every investment. I personally think however that doing cost-averaging investing on blue-chip companies is actually almost risk-free. It is because even if the stock market crashes, it will eventually regain health and blue-chip companies are in for the long-haul just like we are. Hell, maybe I'm wrong but honestly, I'd rather have even a 5% chance of making profit over time on what little I earn now and securing my retirement, than spend everything now and become a burden to my future children because I did not bother on learning anything now about financial security and involve myself in actual investments.Share on Twitter Think about it.

How liquid is my stock investment?
Investments in stocks are not as liquid as a regular bank deposit which you can withdraw anytime. First, you need to sell your stocks, and then withdraw the proceeds from the sale. More information here:   "An individual can withdraw the proceeds of a stock transaction sale in three days (T+3) after a stock is sold subject to the procedures on the withdrawal of funds."

How much does COL earns as a broker with my transactions?
From experience as a minimum stock buyer, they charge less than Php30.00 per transaction, inclusive of government taxes.

I want to start but I'm currently abroad.
The COL help page states that in case of non-appearance, your authorized representative need to present bills under your name. For more information, better send them an email at helpdesk@colfinancial.com

Have you heard of Truly Rich Club and IMG wealth Academy that gives member advice on what stocks to buy or sell?
Yes. I have friends who are members of Bo Sanchez' Truly Rich Club. They are provided guidance on what stocks to buy, and for those who are trading, what stocks to sell, all based on Bo Sanchez' own stock-buying practices. Members are also given affiliate earnings for people that join the club through member links in members' websites, as well as discounts to other Club resources.

As for IMG Wealth Academy, I have attended one of it's seminars and an initial financial coaching session. It is actually a third-party reseller of health, insurance, and investment plans from industry leaders. They closely follow the network marketing business  model. What I like about them is that they actually provide sound guidance to members regarding financial literacy and security. One of its prominent members is Fitz Villafuerte, a financial blogger and owner of the Ready to be Rich blog, which I must credit for very informative reads about the stock market from which I have learned so much.

No, I am not a member of both groups. Before doing COL, I did my own research and attended a COL EIP seminar. For stock trends I check Reuters which also advises to either Sell, Hold, or Buy. But since it's cost averaging, who cares? :) The goal is to periodically add to your portfolio for a period of 5-10 years or more.

When is the best time to start buying stocks?
Even if the forecasts say that stock prices will dip further next month making stocks cheaper so you can buy more value for your money, how can you buy them if you do not even have an account by then?

Forecasts will always be just that- forecasts. The thing is if you start buying now, whether through COL or other stock buying platforms (e.g. BPI Trade, BASecOnline, Philstocks,  etc.), the sooner you start, the better. Refer to the "how profitable" question above.
 If you haven't started younger, start sooner! Start now!

If you want to experience it first through a simulated trial, COL offers one. Go check-out COL's 7-day trial. Another update for those interested in the COL platform, they have recently signed a memo with BPI so that aside from stocks, members can also begin investing in UITFs.

Let me know in the comments if this post has been helpful or not.

***

Reference:
COL EIP primer. Retrieved January 23, 2014 from www.colfinancial.com

Must-read:
https://www.colfinancial.com/ape/Final2/home/online_trading.asp
https://www.colfinancial.com/ape/Final2/home/faqs_main.asp
http://fitzvillafuerte.com/8-charts-that-all-philippine-stock-market-investors-should-see.html
http://www.pinoystockmarket.com/2013/03/earn-133-stock-market-one-year.html

August Bernadette

kaigachi is a conjugation of the Japanese term "kigaicha" or crazy. It roughly translates as "crazy about something."

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