A lot of people ask me “Fehl, I’m a beginner, what should I do to invest in stocks?” As I would always answer, you need a basic knowledge about what you’re getting into, you need a goal and strategy. Once you are ready, you need an online broker.
If those things sound so mind blowing to you, you just simply need to visit our guides here at Dailypik.
I want to share with you some more things you should know before you invest in stocks which some of you may know already but still you need to be reminded of.
Note that this post is about passive investing and not about active trading.
Table of Contents:
5 Things You Should Know Before Investing in Stocks:
- Stocks Make Money
- Investing is Risky
- Time is Gold
- Know your Target
- Do not Panic
Stocks Make Money
One of the reasons why the rich becomes richer and the poor becomes poorer is because the rich people know how to invest their money.
The rich people would rather invest their money in stocks to multiply their equity.
Equity is a percentage of your ownership in a company or business.
When you invest your money in well established companies, you multiply your money when those companies earn revenue from their businesses.
Why?
Because you are literally a co-owner of those companies. The rich people know their priorities, they are business and equities.
Investing is Risky
The moment you put your money in the stock market, you should be aware of the risks involved. The financial world, the economy, the companies you invested with could affect the movement of the market.
Today, you might lose some, tomorrow you might lose some more. The next day you might double your money. It is very uncertain that is why it is risky.
You should only invest what you can afford to lose.
Only YOU (not your financial advisor, not me, not your friends, not Kendall Jenner) know how much you are willing to invest.
Time is Gold
Time is the only necessity we cannot recover when it has passed.
That is why when it comes to investing blue chip companies and investing for long term, it is always better to start young. The earlier you invest, the better.
Know Your Target
These are 2 things you must know: Your Target Year and your Target Money.
Target Year – this could be about how long do you want to invest your money in the stock market. Or until what year do you aim to keep your investments? Or what age do you want to sell and redeem all your stocks investments?
Some say they want to invest in 10 years, others start as early as 20 and want to en-cash all their stocks at age 40 while others target year 2030.
Target Money – this is actually what you think it is – your money goal. Hashstag portgoal (portfolio goal), million goals, millionaire goals, multimillionaire goals, financial freedom goals, and passive income goals.
What’s your Target? Is it 5 million at age 20? Maybe 10 million at age 28? Perhaps, 20 million at 35? Envision your goal, it is not impossible to make it come true.
Do Not Panic
Investing in the stock market is not a walk in the park. The market could crash any day or any moment but if you are into long term investing on blue chip stocks, you should not panic.
Focus on applying cost-averaging technique and remember your goal which is your target.
If you find this post useful, please share it with your friends. Spreading good karma will come back to you 🙂
Happy investing!
Hi Ms.Felh,
Would you recommend joining truly rich club for beginners? Or to study using other sources of info?
Thanks in advance.
Best regards,
Joy
Hi miss fhel.. I’m a newbie. I’ve just started investing last May with bdo nomura. And every month i was planning to buy the minimum share only on the boardlot. Do you think i would gain a lot from it for long term? Following the magic 10 strategy? Or with peso cost averaging? Thank you very much.
Hi Miss Fehl!
i just sold our property for 9M. I would like to invest in Stocks..
is it wise to invest 20k monthly for 5 yrs to three different blue chip companies?
Or UITF by PCA? Or both.
{ don’t really understand what I should be doing.
dnalor
Hi Ms. Fehl
Thank you for having this very informative blog. I would like to ask when is the best time to pull out a Phil equity investment.? Last year it gained around 17K but by December of last year it just gained like 5K., loss around 12K. Since I was new to phil equity investment, i didn’t pull out my investment around June 2016, btw the date I started investing with this bank was around January 2016. By June 2017, I am not sure if I will pull out my investment then I will invest it to another bank, since it gained around 16K as of today. What are your thoughts about this?
Hi, Beannie 🙂 Well depending on your money invested, if it’s 30K and you had 17K gain, I suggest lock in your gains na. Then buy some other cheap equity funds. You can also keep your shares if you want, for longer term if you don’t need the funds badly as Equity Funds are suited for 5 years or more to appreciate much in value. Cheers!
hi miss fehl,
ive bern reading your blogs and recently opened bdo nomura acct. i’m a first time investor and just been reading blogs about stock investing. if you can suggest any stocks for long term investment it would really be abig help. thanks.
Hi, Nor. Congrats in starting your stock portfolio. Well, we have a list here for long term investing. Head over the Blue Chip companies on this page: http://dailypik.com/best-blue-chip-stocks-in-the-philippines/
hi ms fehl i started investing on fgen stocks and philequity fund. what can u say about atr kim eng fund? i love that they are very informative regarding their asset management so im actually drawn into investing. i understand though that this is a high risk mutual fund. i would love to hear your insights. thanks for your blog it is very useful for first time investors. ????
Hi Fehl,
If let’s say I will invest 5K today and 1K monthly applying the cost averaging technique in 10 years with a blue chip company, is the invested amount worth it to keep buying 1K/month?
I’m a low-income earner and as of to date, that’s maximum amount that I can only invest per month within my budget.
Please advise.
Cheers!
Hi, Den. 1K monthly won’t generate so much after 10 years. It could give you gains yes, but do not expect a six digit earnings for 1K/month in 10 years. At least you invested it 🙂 Cheers!
Hi miss fehl,
Ok pa po ba for long term investment ang metrobank? Medyo napagiwanan na po kasi sila ng bdo at bpi.
Hi, if you are referring to stocks, yes. MBT is still a good blue chip company to invest with. Personally, I prioritize BDO since it gives dividends regularly hehe but I still have some MBT stocks