How to Buy Philippine Stocks Online

in Stocks

Investing in stocks is becoming popular in the past years because of the rapid development of Internet and the technology related for trading stocks. In the past, you cannot buy or sell stocks using the Internet since the technology has not been developed and put in place.

However, today, buying Philippine stocks online is very possible through the introduction of online stock trading. Buying and selling stocks can now be done online provided you have an online stock account from your broker.

What is Stocks?

Perhaps you have heard or read this word several times but you don’t have the clear understanding what it is really about. Stock is the portion or share of ownership of a public company listed in a stock exchange or market. If you buy the stock of a particular company, you become a co-owner of that company.

For example, you are a fan of Jollibee and you want to have your store but you don’t have a big capital to start your own Jollibee store. Now, you have learned that you can still be a co-owner of Jollibee by buying its stock.

When you buy Jollibee stock, you will buy it in share or portion. The price per share of Jollibee depends on many factors that can be controlled and cannot be controlled.

Stock is not like a deposit account in the bank. There’s no guarantee of profit when you invest in stock because no one knows what will happen in the future of the company you are buying.

However, if you buy Philippine stocks of established and big companies like Jollibee and Universal Robina Corporation, you are eliminating many risk of losing your money from stocks. The scenario is assuming you will invest for several years like minimum of 5 to 10 years.

Requirements Needed to Buy Philippine Stocks Online

As what I have said before, in the past, you cannot buy stocks online because Internet has not been discovered and developed especially in the Philippines. Because of the fast development of technology and Internet, buying and selling stocks online is now possible.

Before you can buy Philippine stocks online, there are several requirements that you must have to be able to do so. Here are the list of requirements that you must have.

1. Online Stock Account

Obviously, you cannot buy stocks without your own stock trading account. I have published before the list of online stock brokers in the Philippines, you can see the post here.

Online stock brokers are Philippine companies that offers online stock trading though the Internet. The popular brokers in the Philippines right now based on what I’m seeing and reading in blogs and websites are CitisecOnline, BPI Trade, First Metro Securities, Philstocks, and RCBC Securities.

2. Computer with Internet Connection

Since you are planning to buy stocks through the Internet, you must have your own computer with Internet connection. It is not advisable to buy and sell stocks using computers in the Internet cafe due to security reasons. It is dangerous and prone to identity theft.

Some people use their office computers during their break time or lunch. Other people use smart phone to trade stocks. Either way is good but it is better if you have your own computer in your home.

Buy Stocks Online

2. Money

When you open a stock account, you are required to invest an initial amount of money into it. You can use that money for buying your prospect stock. When I opened my CitisecOnline account 2 years ago, I invested P25,000 at first. Then when I have extra money, I normally transfer it from my BPI account to my CitisecOnline account using BPI Internet banking.

Some people use the strategy of cost averaging when investing in stocks. In this technique, you’ll put a fixed amount of money to your stock account every month which you will use to buy the stock you want. This strategy is good when carried out consistently over the time.

How to Buy Philippine Stocks Online

If you have all the requirements mentioned above, you are now ready to buy Philippine stocks via the Internet. However, you also need other things before purchasing that prospect stock that you’re wanting for a long time.

1. Study and understand what you invest

As I always mention in this blog, you need to understand first what you are investing, meaning, you must know and study the company you are buying. For example, in case of Jollibee, you should take some effort how it makes money, how it conducts their business and who are the people behind this corporation.

If you start this habit every time you buy investment, you will have a better decision-making on which stock to buy. There are tons of information in the web about stock investing. In this blog alone, you’ll know basic information on how stock works, how to choose a profitable stock and the things you should avoid when buying stocks.

2. Buy Stocks of Established Company

Once you have your own online stock account, you can now log in to your online stock account to start purchasing the stock you want. I recommend you buy and concentrate first on stocks of established company in the Philippines.

In the language of stock investing, these companies are called blue chip stocks. Normally, these stocks are the ones included in the stock index which are the most traded and have the biggest impact in the Philippine economy.

In the past, I invested in some of the blue chip stocks in the Philippine Stock Exchange such as Jollibee, First Philippine Holdings, Energy Development Corporation, Universal Robina Corporation, GMA7, RFM, and Ayala Corporation. Though these stocks are blue chips, it doesn’t mean that they are the best to buy. Some factors you should consider when buying stocks would be their financial statement, cash flow, dividend policy, and their debt.

3. Buy and Hold

When investing in stocks, you will not see a profit at an instant. Unless you are a day trader, you should wait until the stocks you bought increase its price over the time. You must buy and hold the stocks you have for several months or years.

If you are serious in stock investing and you want to invest for a long period of time, this strategy is good. Even though the stock market is on the ups and down, you don’t have to worry because in the long term, your stock will definitely give you a profit through dividends and price appreciation.

4. Continue to invest

Investing in stocks is not a one time investment unless you have millions on your account already. For common people like you and me who don’t have that big amount to invest one time, it is advisable that you put money little by little on your stock account.

It is better you have an online banking that you can link to your stock account so that it would be easier for you to transfer money. In this way, even when you go abroad to work or live there, you could still add money to your stock account and use it to purchase stocks.

In my case, I am using BPI express online to add money to my CitisecOnline account. It is easy and convenient way to transfer money between the two. When I want to withdraw my money from my Citisec account, I would instruct them to deposit the money to my BPI account. It is really cool and hassle-free.

To Wrap Up

If you are planning to buy Philippine stocks, first, you should apply for an online stock account through the reputable companies like Citisec, BPI Trade and First Metro Securities to name a few. At the beginning, you must deposit and initial investment so that you can start buying the stock you want.

It is far better to study and understand which stock you plan to buy before actually pouring your money into it. Always remember that investing in stock involves risk of losing your money, it is not guaranteed that you will take home profit when you invest in it. Therefore, it is very important to spread the risk by carefully selecting the stock and buying it in lower price.

 

About the Author:

GilGil Tenorio is a blogger, a husband, a father, and an active Christian. He likes playing guitar, C.S. Lewis, Plants and Zombies and NBA. Follow him at Facebook, Google+, YouTube and Twitter. Thanks!

Image Credit: FreeDigitalPhotos.net

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{ 2 comments… read them below or add one }

Personal Finance Apprentice January 20, 2013 at 08:35

Great info! Online stock investing is the best – great returns (potentially:) – and very easy to do.

I use BPI Trade myself, though I hear Citisec regularly sends out investment advice (stock picks) and conducts seminars.

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Gil January 20, 2013 at 11:57

I use Citisec but I don’t follow their stock picks because I’m investing in companies I know and studied.

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