I find it remarkable that quite a number of INQUIRER.net readers are raring to invest in local stocks considering that those in more advanced markets are still stumped by subprime worries. From the kind of emails and queries I receive, the gung-ho attitude is not borne of ignorance but of a desire to be part of the action in the capital markets and a hope that owning stocks will make retirement so much better. From what you tell me, I can sense that the “prestige” of playing with stocks is a big part of the equation too.
Perhaps some of you are thinking of investing your Christmas windfalls instead of spending them. Or for OFWs, investing will hasten the days for your final homecoming. Investing in equities is a personal choice, and one that might work for some and not for others. To begin, the first thing that you have to do is get a broker. The Philippine Stock Exchange requires investors to be represented by a broker before they can own or sell stocks.
For many who are not in the country physically, setting up an account and making phone calls made to brokers can be quite expensive. Online brokerage accounts have become convenient ways of investing in the stock market because communications via email lessen the cost. Secure websites that display personal accounts add to the attractiveness of this option.
Ideally, beginners should start with a traditional broker account, says the Philippine Stock Exchange. I was surprised to find that even at P5,000, nowadays, one can already open an account with a brokerage. Just don’t expect the broker to be calling you up when he has a hot tip on his plate.
For those whose only option to go online, make sure you get an online brokerage that’s duly registered with the PSE, that don’t charge very steep rates, has secure platforms (you don’t want a hacker getting your account details), has good customer service, and has good track record. Here is a list of accredited online brokers and their websites.
AB CAPITAL SECURITIES, INC.
ACCORD CAPITAL EQUITIES CORPORATION
BPI SECURITIES CORPORATION
CITISECURITIES, INC.
DIVERSIFIED SECURITIES, INC.
F. YAP SECURITIES, INC.
FIRST METRO SECURITIES BROKERAGE CORPORATION
PNB SECURITIES, INC.
RCBC SECURITIES, INC.
Read this article for more tips on finding a good online stock broker.
December 22nd, 2007 at 4:34 pm
@ johnjr & starter boy,
If you would like to learn about the stock market and how to trade it, there’s a group outside of the PSE that teaches a seminar on technical analysis of the financial markets. This group is Absolute Traders (http://www.absolutetraders.com). It’s not free, but many of those who joined them have said it was worth more than what they paid for.
December 21st, 2007 at 12:38 pm
Hi Salve,
Its not that difficult actually. I just log on (fully secure by the way), keep tab of the movement of the stocks I am watching then at any time during the trading hours I make the transaction. If your target price is reached, a short wait to see if yours went thru (no rejected bids/sale from me so far). The trick is you have to be fast enough. Not to mention a fast internet connection because as we all know it only takes a second for a stock price to change. Timing is essential too. The good thing I like about BPI is that they have a feature where you get to see every transaction made on a certain stock. This is helpful in a sense that if you are particularly watching X stock, you know when everyone is selling off or buying, what time were the price went the lowest and how are the price progressing. That way you can anticipate the next move. I’m not sure if this is a common feature of online traders. You also see what time your successful transaction went thru.
For those wanting to start trading by themselves, you can start with a small amount and play with it (armed with research of course). Small enough that if things went wrong while you are still learning the ropes, you can write it off. Then try again.
Note: Being able to transfer funds online is dangerous to the undisciplined. It is always tempting to “borrow” funds when you know they are just a mouse click away.
December 21st, 2007 at 10:02 am
Salve,
Sadly, the only book I truly found helpful was Irving Ackerman’s book about the PSE. Forgot the title but it detailed quite a bit about how the PSE works. However, it was written decades ago when the PSE was still trading manually. Nowadays, the books I see don’t really give neophytes a good idea about the workings of the PSE. Citiseconline does give good seminars but understandably, their talks are geared towards getting you to sign up with them. I used to teach Technical Analysis at ADMU in the 90’s but the course fell out of favor when the market crashed. The PSE used to give a nice pamphlet about stocks but it really didn’t detail the risks about investing in stocks. All in all, newbies are pretty much left to fend for themselves and that is one reason that our market’s investment base doesn’t grow — a lot of people learn about the market based on second-hand theories and haphazard methodologies — and that is always a recipe for disaster.
Regards,
Malaya
December 21st, 2007 at 9:50 am
Don,
You have a valid point. In order to address it, ask your broker to fax / email to you a copy of the actual contract that is printed when a trade is consummated. Said contract should have your name or account number on it as well as the time the trade was done. These are PSE and SEC requirements so the broker should be willing to show it to you since it is your trade. The thing is, in the 80’s and 90’s, there would be unscrupulous brokers who would post an order ostensibly for their client but if the price moved favorably, then they would claim it for their own. To combat this, brokers are now required to indicate on the order screen, the account to which a particular order belongs. Hence, if you think that a broker acted too slow on your order, ask to see the contract. This is also one advantage of having a “Live” broker — you can ask him how many shares are ahead of you in the line. That way, you will know if you have a good chance of getting your order done or not. (i.e. if you are buying Ayala Land and you find out there are 10 million shares ahead of you, then you may want to adjust your price.)
December 20th, 2007 at 10:14 pm
online brokers do not specify their execution time. some takes only a few seconds, other times up to 20 minutes when the price you posted already changed. this means that when you post an order online, it still passes thru your broker to be executed and re-transmitted to pse. data feeds from pse are in real-time.