Stock market seminars spur investor awareness

CEBU, Philippines - As a market education initiative to spur investor awareness and heighten local involvement in the stock market, Philippine Stock Exchange conducted stock market seminars at the Cebu Parklane Hotel last May 21 and 22.Regina Capital Development Corporation Managing Director Victor Limlingan Jr. admitted that the financial literacy of Filipinos in stock trading is very low, estimating one percent or less of the country involved in such investment compared to United States of America which has 50% participation.

“To invest in stocks, you need to have excess income and education. It’s sad but most of our countrymen do not save since they only have minimum wage and unfortunately, the art of investing is not taught in Filipino schools. But it’s still a long way to go. Besides, Philippines is a growing country,” he told The Freeman.

Sharing what really happens in the stock market, Limlingan spoke of the basics of stock trading as a guide for beginners.

He noted that one has to understand the risks to make money in stock trading or else they end up losing their money in the end due to misconception or mismanagement.

Discussing the differences of equity and debt, he further said that the former is better than the latter since it represents the residual claim after all other claims than just a fixed claim on the resources of the company.

“Any business that exists, no matter how big or small, has to have some form of assets. It’s either you borrow money or you ask them to invest. Debt is fairly risky because the outcome is fairly predictable. Though inherently risky, you have a chance for profit and for wealth in equity since you have a share in the excess. If you own one share of the company, you own a corresponding one percent of the entire company,” he stated.

Representing proportionate ownership in the company, he said that shareholders have ideal rights and earnings as business partners.

He added that an investor can have a number of options to get equity such as the Philippine Stock Exchange where one can buy equity from large companies and industries in the country such as those involved in financial, holding firms, industrial, property, services, mining and oil.

Describing a perfect investment with high returns, low risk and high liquidity, Limlingan noted that investing in stocks is about trade-offs, having to compromise one over the other two.

He then reminded the neophytes to have different investments addressing different needs, hold a diversified portfolio of investments, and to invest in stocks of the strongest and well-established companies rather than those controlled by syndicates.

“Understand the business. Even if you’re not an expert but you are a consumer, you know if a certain company is doing well or not. The best gauge is to look at PSE indices. The point here is to buy low and sell high. You have to be a contrarian,” he advised, admitting that fear and greed are evident in the stock arena.

Meanwhile, First Metro Securities Brokerage Corporation Equity Sales Officer Norman Jay Go tackled the advantages in trading online which includes lower commission rates, real-time updates, minimized reliance on human interaction and ease of access to information.

He added that as a brokerage and designated Apple developer, FMSBC is constantly innovating in the world of stock market as they offer three platforms to traders such as personal computer, iPad and iPhone.

Publicly listed with a stable shareholder base, PSE is a sole institution providing a suitable market for efficient trade of stocks to the general investing public, serving as a watchdog of the stock market. (FREEMAN)