On the Road to Recovery?

After more than three months of getting a negative standing on my overall investment portfolio at the Philippines stock market (it went down to -13%), at last, my overall investment portfolio is now on its positive standing ... not that big margin though but at least if ever I sell all my positions today, I would be gaining on my investment.

Is this the start of stock market recovery?  Well, let's wait and see.

Board Lot and Odd Lot

Board lot is the minimum size a stock can be traded and it is controlled by the stock price.  If a stock has a board lot of 100 shares, that means that you can buy or sell that stock for a minimum of 100 shares and in the scale of 100 thereafter.  With this board lot, you can trade it at 100, 200, 300 and so on and so forth.

Odd lot on the other hand is a number of stock shares not wholly divisible by a minimum board lot.  For example the minimum board lot for EDC (Energy Development Corporation) is 100 shares.  If you have 150 shares then 50 shares is considered as odd lot.  

Now, you may be wondering, if stocks are traded by board lot then why is there such a thing as odd lot.  Well, this odd lot usually happens when a company declares a stock dividend or stock rights.  For example you have at present 300 shares of EDC then they declare a 25 % stock dividend, this means you will receive additional 75 shares.  The additional 75 shares is considered an odd lot since it is below the minimum board lot which is 100 shares.  

This odd lot shares can only be traded at Odd Lot Boards but are not easy to trade and are usually traded at a discounted price.

You may minimize getting this odd lot shares by buying additional shares whenever a company declares a stock dividend.  As for our example above, once you learned that EDC will give out a 25% stock dividend, you may buy additional 100 shares so you will get a total of 400 shares.  This 400 shares will give you an additional 100 shares dividend which is already equivalent to the minimum board lot.

I have an odd lot shares for BPI last year when they declared a stock offering.  I did not try to sell it so it’s just there in my account, anyway it still earns interest whenever the company declares a cash dividend so I’ll just leave it there.

Below is a table of board lot for Philippines Stock Market:

Stock Price Range		Board Lot
0.0001	0.0099	1,000,000
0.01	0.049	100,000
0.05	0.249	10,000
0.25	0.495	10,000
0.5	4.99	1,000
5	9.99	100
10	19.98	100
20	49.95	100
50	99.95	10
100	199.9	10
200	499.8	10
500	999.5	10
1000	1999	5
2000	4998	5
5000	Up	5

I hope you learned something from this post.

Happy investing everyone.

Crazy Week for the Stock Market

Wow, it’s been a crazy week for the stock market.  At the beginning of the week, all stocks were going down and my portfolio was down by almost 5%.  Wednesday came and the stock market rebounded but still it’s lower than what it was last week and my portfolio is still down by 3%.    

Anyway, I had been through this before.  The worst that I experienced was a 20% down on my portfolio and that happened first half of 2009 when the stock market was just starting to recover from the 2008 financial crisis.  I was only new to the Philippines Stock Market then but it didn’t scare me, my portfolio was made up of big companies so I was so confident that my investment will recover so I just hold on with all my investments, not selling anything.  True to my expectations, in a few weeks time, my portfolio was up.

This craziness that’s happening in the stock market today will also have its end and if you’re tough enough to hold on and even buy stocks of companies that are way down below their valued price, we are on the same side.  It’s bargain hunting week at the stock market.

Good luck everyone.

Another Recession?

Another selling frenzy swept the Wall Street for the past weeks and yesterday the Dow Jones Industrial Average fell more than 500 points, the 9th steepest decline ever according to analysts.  See story here.

I don't really understand all this issues in the U.S. economy that gives fear to its investors and leads to the selling frenzy at the stock market but definitely all stock exchanges outside the U.S. will be affected. 

This will be a wait and see day for me at the Philippine Stock Market but there's nothing to worry, stock market always have it's highs and lows and as long as you don't panic and sell all your losing positions, rest assured that the market will always bounce back, higher than the previous high.  This is the reason why it is advisable that the money we put in the stock market are extra money that we won't need for our everyday and emergency funds.

Happy investing everyone.

How to Start Investing/Trading in the Stock Market

I have talked to some friends who have been interested in investing in the stock market for a long time it's just that, they don’t know how to start.  Well, I told them, if you’re really serious in getting involved with the stock market, have the extra money to invest or trade and you are willing to take the risks (which can actually be managed), getting started is just simple.

The only thing you have to do is to open an account with a stock broker.  It is the only way anyone can transact business with the stock exchange.

There are a lot of licensed stock brokers in the Philippine Stock Exchange, you can visit the PSE website and click on the trading participants to get the complete list.  The list is really long that if you’re new in the stock market, it would be a headache to choose which stock broker you are going to transact to so this is where information from friends and some research can help.

In my case, I chose the stock broker recommended by Bro. Bo of Truly Rich Club which is the Citiseconline.  I'd been reading books, articles and newsletters written by Bro. Bo, in fact, it is from his writings that I learned about the stock market so it's just natural for me to follow his recommendations.  But of course, before I opened my account with Citiseconline, I did my own research.  I browsed their website and attended the free seminars they offered and so far, two years after opening an account with them, I’m satisfied with their services.

Once you have opened an account with a stock broker, you can now buy your first shares of stocks of any listed company you want to.

Happy investing everyone.

How Money Grows in the Stock Market

People are investing in the stock market with the goal of making their money grow but how does our money grow in the stock market?

It’s been two years since I started investing/trading in the stock market and so far, I have earned through the following:

a.       Capital appreciation - this happens when the price of stocks I bought appreciates.  For example, I have bought 1000 shares of ALI (Ayala Land, Inc.) stocks at a price of 15 pesos per share and after some time the price appreciates to 16 pesos per share.  At that instant my capital increased by more or less 6% and depending on my plan, I may opt to sell my shares so I can already secure my 6% profit or I may wait for the stock to appreciate more for a bigger profit.

b.      Cash Dividend - This is the money given back to the investor as his/her share of distributed profits declared by the company.  As per my experience, most companies where I invest declare cash dividend twice a year.  For example, I have 30 shares of TEL (PLDT) stocks then they declared a cash dividend of 78 pesos per share.  That means I will be getting 2,340 pesos dividend less 10% tax, I will get a net dividend of 2,106 pesos.

c.       Stock Dividend – This is the additional stocks given by the company to its shareholders.  This is usually declared in percent.  For example, If I have 4000 shares of EDC (Energy Development Corporation) stocks and then they declared a 25% stock dividend, I will be having an additional 1000 shares of EDC stocks which I can sell right after the stocks were credited to my account.

d.      Stock Rights Offering – This is a special offering of companies to its existing shareholders wherein the offered share price is lower than its current market price.  This is usually declared in ratio and shareholders are given a timeframe to accept the offer or not.  Yes, a shareholder can opt not to accept the offer but if you have the cash to buy the offered shares, it is much better to accept the offer.  This is seldom offered by companies so it’s an opportunity to grab.  I have experienced this opportunity last year when BPI (Bank of the Philippine Islands) offered a 1:10.555 stock offering.  I have an existing 2200 shares so I was offered 208 (2200/10.555) shares at a price of 32.50.  At that time, BPI trades at 51 pesos/share so it’s just like buying the 208 shares at 36% discount which I sold immediately giving me a more or less 50% profit.

There’s really a lot of opportunity to grow your money in the stock market.  It’s high risk, yes, but you can develop your strategy to counter the risks.

Happy investing/trading everyone.

Why I Started Investing in the Stock Market

 Last 2009 as an effect of the global economic crisis, the bank's interest rate on deposit accounts was reduced tremendously that my little savings deposited on my time deposit account earned a very minimal interest.  Starting from 5% annual interest, it dropped to as low as 2.5% annual interest.  A 20% withholding tax is still to be deducted from the meager earnings I get from my savings.

This situation pushed me to start reading books from financial experts.  I bought books written by Mr. Robert Kiyosaki and Mr. Colayco and registered to Bro. Bo's Truly Rich Club.  Having read the insights of these financial experts, my financial outlook in life changed.  I now understand the value of investing.

There are different investment vehicle available in the market but what really caught my attention is the stock market.  Before, my perception about stock market is that, only the rich with large amount of capital can invest in this market and that it's a very complicated and difficult thing to learn.  But when I started reading articles from Truly Rich Club regarding the stock market, little by little I was enlightened. 

Of course, I did not immediately plunged into investing in the stock market, I did a lot of readings first not only from Bro. Bo's Truly Rich Club but also from other sources.  I visited Philippine Stock Exchange website and monitored the stock's movement of companies I'm interested in.  I also visited CitiSecOnline website, the online stockbroker Bro. Bo recommends and I attended the free seminars they hosted.  In other words, I did a research on stock market's ins and outs (at least the basic ones) before I opened an account at Citisec.

Now, it's more than two years since I started investing/trading in the Philippines Stock market and I'm really happy that I did.  It's high risk, yes, but you can always develop strategies to counter the risks.