IN PERSPECTIVE
December 30, 2007

Philippine Stock Market: How To

Each time I log on to my YM, I always get a couple of invitations from random people. Most of them ask about the stock market. It's a bit strange since I haven't actively been updating my site. It turns out I still get top billing when searching Google for "investing in the Philippine stock market". Fair enough. I'll be the nice guy and I'll put this information out. I'm fairly sure some other site has this, but hey.

I will start with the assumption that you've all seen some stock market movie or television show. If this piqued your interest, then you probably want to get rich quick. That won't happen unless you're Erap and you were offered BW shares when it was still called GRC resources. Nonetheless, prudent investing can provide you with good returns over a long period of time.

If you're checking this out, I'm assuming you're fairly young and that this will be your first investing venture. Let me give you an unsolicited tip. If you buy something, be prepared to hold it for years and years. You'll probably say yes, but you won't follow me. Why? There is something very addictive about checking stock prices, reading the stock market news and frantically calling your broker to buy or sell. It is. I promise. It's fun and it's cool to tell your friends that you're buying and selling, but it's probably not a very profitable way to go about this. Trust me on that.

Honestly, I don't think it's the best time to buy. Let me warn you that I haven't been reading the news all that much, but I do know the economy's still riding on some pretty good times. And if you're excited to invest, then it's really not the time. When you're scared about tomorrow and you see bankruptcy news and some really enticing interest rates, that's the best time. If there seems to be a mass exodus of folks to the US or Canada, that's the time. It sounds simple enough, but it's harder to execute than you think. When we were right smack in the middle of the Asian financial crisis in 1998, it didn't seem clear when the economy was going to bottom. So please give that some thought.

With the proper mindset in place, the rest is mostly administrative. Go to a broker. Most of them are just in Ayala Tower. You may also check the PSE website and find the list of member brokers. Go call them up and tell them you want to open an account. It's just like opening a savings account in the bank. Bring IDs and probably the money you want to invest. It's not hard at all. The difficult part is finding the right broker for you. I'd say go the referral route. Find a friend who has a broker. Is broker selection important? Of course it is. You'll have a fiduciary relationship with this person. Trust is important. I wish I could recommend one but I've been out of the market for a while now.

With the account in place, all you have to do is call your broker if you want to buy or sell something. If you need more details than that (like how to pick stocks) or how to ignore the bullshit stock market reports you read on the papers, let me know.

BTW, it's usually faster if you contact me through my blog.