4 Easy Steps to Start Trading in the Stock Market

Written by imoney

The national economy is in an upswing. With industries and companies performing well, it is possible to earn a decent profit from investing in the stock market. Here are the steps you can take to commence investing in the Philippine stock market.

1. 1. Know how much and where to invest. Decide how much you would be willing to invest to buy shares. These days, an investor can invest at least P5,000 to get started. Logically, the higher the investment, the better is the chance of diversifying it to minimize risks and boost profit potential.
2. Open a Central Depository (CD) account with any bank, and an account with an accredited stock broker. The CD account is an electronic book-keeping system that records and monitors all share ownership and transfers. In terms of stock brokers, check out the list of reputable and duly accredited stock brokerage firms at the official website of the Philippine Stock Exchange (PSE). Basic requirements for opening a trading account are two valid identification cards, proof of billing, and signature cards. Cash deposit is required to jump start the investment process in the stock market.
3. Start picking a stock to buy. Check out the list of publicly traded companies at the PSE website. Investors should be updated about economic and company news so they can make good decisions choosing a sound company to invest in.
4. The next step is the beginning of the trading process. Place an order. The stock broker would have to make the transactions on behalf of investors, who in turn make the decision and put orders about which stock and how many units of shares to buy. When the order is completed, the broker provides a confirmation invoice containing the transaction details. Transactions should be settled or funded within three days following trade. Online brokers can assist investors in settling transactions within the trading day.

It is the duty of investors to monitor the trading market movements in order to make good and timely investment decisions according to their profit requirements and risk profile. Do your homework in researching the performance and prospects of the companies you hold shares in, or want to buy into so that you can make good, profitable decisions.

There are dozens of investment options other than investing in the stock market, such as Bonds, UITFs and Time Deposits. This article covers the basics of time deposits.