Buying stocks is becoming a popular and convenient source of investment because, with just a few simple steps, you can also purchase shares and receive profits. Before buying a stock, you must define a clear goal: Why do you want to believe that stock? You buy for long-term or short-term investment.
The following article will show you how to buy stocks Philippines and give a few tips when you buy stocks on the markets.
Table of Contents
How To Buy Stocks Philippines
Open An Account
To buy stocks, investors must have an account to perform transactions. This account will be a place to store money and help investors trade stocks. To open a securities account, investors only need a national or citizen identification card.
Investors can also open a securities account online at reputable securities companies today.
Download And Install Stock Trading Software
The trading software will help investors place orders and manage orders more clearly. In addition, smart software also supports investors in analyzing and providing some industry and business-specific data information. Thereby it helps investors get successful transactions that bring high profits.
To choose the right tools, investors need to carefully consult the information about them and go through the installation instructions by the manufacturer.
Deposit Money Into the Account
For a securities account to be able to be traded, investors need to deposit money into the account. Depending on the financial situation, investors can top up the corresponding budget. Currently, from only 5,000 PHP, investors can start buying shares of companies.
Place An Order To Buy Stocks
The order to buy shares will be based on the charges on the stock exchange, which is also one way to buy stocks online. Investors need to ensure that the money in their account is enough to purchase the number of shares at the price they want.
To choose a good stock, you need to pay attention to the following criteria:
- (Total debt/current assets) < 1.1: Value investing values low debt because this is a factor that helps ensure the financial position of businesses when the economy turns bad.
- Current ratio >1.5: This index calculates existing assets by short-term liabilities, showing a company’s ability to pay debts maturing in less than 1 year. The higher this index, the lower the possibility of the company becoming insolvent.
- Positive EPS growth in the last 5 years: This criterion is simple. EPS has had a positive change in the previous 5 years. This criterion helps investors stay away from high-risk stocks.
- P/E <9: Stocks with P/E less than 9 are recommended to buy. The reason is that a stock with this P/E is considered a bargain, able to resell at a higher price. However, this criterion can cause investors to ignore growth stocks with relatively high P/E.
- P/B <1.2: Using P/E as a standard is sometimes confusing if the enterprise has abnormal profits from asset liquidation, financial income, etc. P/B will overcome this limitation by using the nearest book value.
Regular dividends: Buying an undervalued stock requires a lot of patience as it can take a long time for the market to recognize it. If the company pays good dividends, investors will still have a source of income while waiting for the stock to appreciate.
Something You Should Notice Before Buying Stocks
After knowing how to buy stocks, note a few issues below to limit the risk when purchasing supplies.
Set Goals
Before doing anything, the goal-setting step is an integral part of your plan. So investing is no exception. By determining the target, investors will know how to buy stocks reasonably and allocate appropriate capital to stick to the target.
Setting goals also helps investors see their direction in the future, thereby limiting risks. For example, you set a goal to buy stocks to prepare for retirement, invest in your children’s education, buy a house, buy land, etc.
Define Time Goals
From the target, investors will have a way to buy stocks and allocate appropriate capital. For example, with an investment goal for a retirement fund, investors will know how much money they need in the future and how much time is left to achieve the above purpose.
Based on specific goals and time, investors will know how they should invest and how much money to invest from now on. Expert advice is that investors should aim to participate in long-term investment stocks to ensure safety and future profits.
Assess the level of risk
Is buying stocks risky? Is the investment risky? The answer is yes. Any field of making money will have certain risks. It’s your job to equip yourself with the knowledge to assess risk tolerance.
There is a famous saying in the investment world that “Don’t put all your eggs in one basket.” This statement represents risk dispersion. You should not invest with all your money or use all your investment money to buy stock.
Therefore, before investing, ask yourself, “What if I lose that money?”. It will help you assess the level of risk and know how to buy stocks sensibly.
Calculate The Right Investment
Once you’ve done the above 3 things, you will calculate a reasonable investment to achieve your goals. Experts say that, as wise investors, we should not let investing affect our lives much.
As mentioned above, you should not use all your money to invest but equip yourself with other safe financial barriers to minimize risks.
Conclusion
Through the above content, we have shared with you how to buy stocks Philippines safely and effectively through 4 simple steps. We hope that with these ways to buy stocks, you are confident to start your investment journey. In addition, you also need to note a few characteristics to become a smart investor and not lose money.
