Reasons For Investing In The Stock Market - Part 1
In my previous articles, I gave a comprehensive introduction on how to invest in the Philippine stock market, particularly talking about the basic principles that each prospective investors should understand. In this article we are going to discuss the advantages of investing in the stock market.
As I said mentioned previously, the stock market is just another vehicle of investment. You might be wondering what is the reason why you should invest in the stock market? Is there an advantage in investing in the stock market ?
The following reasons could probably answer the above question. Take note, examples given refer to Philippine based companies and currency. If you wish to view the entire article please visit my blog.
1.) The allure of great returns - Most financial expert would tell you that in a bull run the market really goes up. Average returns could be as low as 30 % and as high as 200 %+ per annum or even more. Profit is always expected when you invest in the long term. For example, In 1997, the Globe Telecom Inc. (GLO) stocks price per share was only P152.00. during that time you only spend P 1,520.00 to buy the minimum board lot which is 10 shares. Currently the price per share of Globe is P 1,620.00+. The value of those 10 shares that you previously bought is right now P 16,200, meaning in ten years time your money has grown ten times. This is translated to an average of 30 % return per annum. This is far better than putting your money in a time deposit account at less than 4 % per annum. It is interesting to note that the Philippine stock market is at its highest these days. For the next 2 to 3 years, they say the market will still be in a bull run. Make the best out of this situation.
2.)"Ownership" in the companies that you are investing in. - Wouldn't it be so cool to have your own Jollibee franchise ? However the investment of 20 to 25 million pesos does not make it so cool considering that you also have to put in time and effort to run the store. So instead of owning a Jollibee franchise why not buy Jollibee instead through buying shares of stocks in the corporation ? The minimum board lot of JFC shares (Jollibee Foods Corporations - JFC) cost only P 5,000+. With this investment you indirectly own the more than 1414 stores in the Philippines and 175 in other countries not to mention Red Ribon, Chowking, Deli-France, A popular fastfood chain - Yonghe King in China and popular teahouse chain from Taiwan called Chun Shui Tang including Jollibee's pilot restaurant "Tio Pepe's Karinderia." So next time you eat at Jollibee tell your friends and that you like to eat there because you "own part of the company." You might want to own stocks of PLDT or Globe to help you become more prompt in paying your bills.
3.) Being part of a "Special group" -
When asked to join a multi-level marketing scheme, I always want to know when the company started. I ask this question because I believe that if it started a long time ago, my chances of recruiting other people will be lessened as most people that I know has already been recruited.
But investing in the stock market is not multi-level marketing. It does not matter whether the market is saturated or not. But it's good to know that we are among the first to exploit the market's potential.
Statistics released by the Asian Development Bank shows that as of 2005, only 600,000, out of the of the country's 87 million population, invest in the stock market. If you do the math that is only 1 % or roughly around 0.7 % Most of the market players are from the Class A and B segments. - 23196
As I said mentioned previously, the stock market is just another vehicle of investment. You might be wondering what is the reason why you should invest in the stock market? Is there an advantage in investing in the stock market ?
The following reasons could probably answer the above question. Take note, examples given refer to Philippine based companies and currency. If you wish to view the entire article please visit my blog.
1.) The allure of great returns - Most financial expert would tell you that in a bull run the market really goes up. Average returns could be as low as 30 % and as high as 200 %+ per annum or even more. Profit is always expected when you invest in the long term. For example, In 1997, the Globe Telecom Inc. (GLO) stocks price per share was only P152.00. during that time you only spend P 1,520.00 to buy the minimum board lot which is 10 shares. Currently the price per share of Globe is P 1,620.00+. The value of those 10 shares that you previously bought is right now P 16,200, meaning in ten years time your money has grown ten times. This is translated to an average of 30 % return per annum. This is far better than putting your money in a time deposit account at less than 4 % per annum. It is interesting to note that the Philippine stock market is at its highest these days. For the next 2 to 3 years, they say the market will still be in a bull run. Make the best out of this situation.
2.)"Ownership" in the companies that you are investing in. - Wouldn't it be so cool to have your own Jollibee franchise ? However the investment of 20 to 25 million pesos does not make it so cool considering that you also have to put in time and effort to run the store. So instead of owning a Jollibee franchise why not buy Jollibee instead through buying shares of stocks in the corporation ? The minimum board lot of JFC shares (Jollibee Foods Corporations - JFC) cost only P 5,000+. With this investment you indirectly own the more than 1414 stores in the Philippines and 175 in other countries not to mention Red Ribon, Chowking, Deli-France, A popular fastfood chain - Yonghe King in China and popular teahouse chain from Taiwan called Chun Shui Tang including Jollibee's pilot restaurant "Tio Pepe's Karinderia." So next time you eat at Jollibee tell your friends and that you like to eat there because you "own part of the company." You might want to own stocks of PLDT or Globe to help you become more prompt in paying your bills.
3.) Being part of a "Special group" -
When asked to join a multi-level marketing scheme, I always want to know when the company started. I ask this question because I believe that if it started a long time ago, my chances of recruiting other people will be lessened as most people that I know has already been recruited.
But investing in the stock market is not multi-level marketing. It does not matter whether the market is saturated or not. But it's good to know that we are among the first to exploit the market's potential.
Statistics released by the Asian Development Bank shows that as of 2005, only 600,000, out of the of the country's 87 million population, invest in the stock market. If you do the math that is only 1 % or roughly around 0.7 % Most of the market players are from the Class A and B segments. - 23196
About the Author:
Would you want to know more about investment strategies ? Visit the blog of Zigfred Diaz where he writes about several interesting topics such as investments, money management, business, making money online and Stock market investing
posted by X - Men @ 12:59 AM
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