Zigfred Diaz
A lot of people have asked me on whether they should invest in the Philippine stock market. Most of those who asked also wanted to know how to start doing it. I do not know if they are really serious about investing or if they are merely curious about it since it has been given emphasis lately considering its very positive performance.
The Philippine stock market or the stock market in general is not a child's play ground. If you are a true investor, you must have expectations as to how much you are going to earn for a certain type of investment. This is measured in terms of how much your money will grow at a certain period of time. (The most common measure being interest per annum) Since the Philippine Stock market is at its peak for months now, people think that they should join the party even they do not understand how it works. They are even naive with the basic principles involve. This is not to say that you should be an economist before you start investing.
The point I am making is that you should understand the basic principles first before you will be successful in the stock market. It is true that fortunes are made on the Stock market, however there are also stories of people loosing a large amount of their money. Other who just dive into the stock market without knowing the basic principles of investment quit after some time, telling themselves that the stock market does make any money for anybody.
Let us not begin first by discussing the "how tos" in investing in the Philippine stock market. Let us first understand the basic principles of investment so that we might enjoy trading and be successful in the stock market. There are ten principles involved. We will talk about the first principle here. Other principles will follow in the next articles. Visit my blog if you want to see the whole article.
1.) An alternative vehicle of investment - The first principle is that you must realize that the stock market is just another alternative vehicle of investment. There are other investment vehicles in which you could invest in. Each vehicle of investment is unique and one is not more superior than others. Each of them has their own advantages and disadvantages. This will not be discussed in depth here.
The stock market belongs to a category called "Capital Markets." In the Capital Market there are several vehicles wherein you could place your money in order for it to grow. You could place it in bonds, pension funds, insurance, real estate, different types of savings and time deposit accounts and of course the stock market. Why is it important to know this? Well, you should know the different types of investment vehicles under the Capital markets in order for you to determine whether or not you should invest in the Stock Market as there are other vehicles of investment.
Bear in mind that each vehicle of investment has their own advantages and drawbacks. The secret here is not to place all of your eggs in one basket. Even if most of my investments are in the Capital Markets, I diversified by placing investments in the stock market, bonds through mutual funds, pension, deposits and insurances.
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With his diverse educational background and job experiences, Zigfred Diaz blogs on several topics including Financial managment and investing in the stock market
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