One of the main reasons why Filipinos doesn’t invest in the Philippine Stock Market or other investment vehicles is generally they don’t have any idea and enough education on how to do it.
Most of us who came from the province or born poor has zero background about stocks and we always think that this type of investment is for the Ayala’s and Lopez’s only.
Here are the top 7 Misconceptions about investing in the stock market.
A lot of Filipinos doesn’t want to jump into the stock market game because they thought that it is gambling.
According to the dictionary:
When you gamble, you are betting your hard earned money on CHANCE!
How about investing?
According to investopedia:
The act of committing money or capital to an endeavor (a business, project, real estate, etc.) with the expectation of obtaining an additional income or profit. Investing also can include the amount of time you put into the study of a prospective company, especially since time is money.
The keyword is STUDY. When you invest in the stock market, you need to study the prospective company first before you commit and buy shares using your Broker.
2. STOCK MARKET IS FOR THE RICH PEOPLE ONLY
I am one of this people!
When I heard about investing in the stock market, I thought it is for the rich.
I thought people who have blue collar jobs can’t invest in the stock market because they don’t have enough money to invest and they don’t know the stock market terminology and how to do it.
But I was wrong because even maids and drivers can do it.
Here’s what you can do if you think you don’t have enough money to invest in the stock market today, save 30% of your 13th month pay and invest it immediately.
Do you know that you can start your investment journey today with P5,000 pesos as an initial investment? Yes, you read it right.
I started investing in the stock market in 2010 and the P5000 initial investment have grown 31% in just two years. Bank can’t give you that interest!
3. I DON’T HAVE ENOUGH TIME TO MONITOR THE STOCK MARKET
Do you have time doing the following time waster activities?
Watch Telenovela, browsing Facebook, reading fiction books, gossiping and the lists goes on.
Investing in the Philippine stock market doesn’t need you to monitor all the time. The Philippine Stock Exchange is open from 9:00 AM to 3:30 PM and you can even buy off-line.
Long term investors doesn’t monitor the stock market everyday. I only check my portfolio once a week and when I want to buy a stock.
Traders are the one who monitor the stock market everyday because they timed the market and study the pyschology of the market.
Your aim should always be long term and if you have enough funds and enough knowledge, then you can do short term investing.
4. YOU SHOULD HAVE AN EDUCATION RELATED TO THE STOCK MARKET
You don’t need masteral degree or PHD to be able to buy a shares of a company. If you have the following qualities, then you are absolutely qualified to invest in the stock market.
- Desire to learn
- Common sense
- Willing to spend time studying a company
Initially I couldn’t understand and it overwhelms me. What I did is I read books about investments, joined the Truly Rich Club and attends seminars.
Invest in your education first before you invest in the stock market.
5. WHEN PSEi (INDEXES) IS DOWN I WILL LOSE ALL MY MONEY!
Of course you will lose money when the PSEi is down but it’s only paper loss. You will lose money if you withdraw it from your broker.
The stock market will have it’s ups and down and you can capitalise this trend by investing your hard earned money every month (peso-cost-averaging).
Truly Rich Club does this strategy. They call their recommended stocks SAM Stocks. SAM means Strategic Averaging Method.
Be Fearful When Others Are Greedy and Greedy When Others Are Fearful – Warren Buffett
When others are fearful about the stock market, that’s the time you accumulate a lot of shares because the shares are cheap!
In 2009 when the stock market crashes, Jollibee share price is P52.00 pesos. Today Jollibee (JFC) price is P207.00 pesos, a whopping %398 growth!
If you put your P20,000 pesos on Jollibee, your money should grow to P79,600 pesos. What if you put 1 Million pesos?
6. THE STOCK MARKET IS COMPLICATED
Getting an answers to our questions about stock market is very easy. Just type your question on Google search engine and presto your question will be answered.
During the pre-internet era, stock market is complicated because you need to go to the library or buy books about investing. This is not possible if your from the province.
That’s why the Internet is one of my favorite tool in educating myself, not just investing but in other niche. So don’t be afraid to ask questions and say your opinion.
7. THE STOCK MARKET IS RISKY
Yes, it is risky if you are a trader but if you are a long term investors and follow the advise of the Truly Rich Club or COL Financial (online broker) then you will not worry about it too much.
You invest what you are willing to risk and sometimes, based on my experience, that small investment will grow as you grow your knowledge about investing.