I’m sharing a step-by-step guide on how to sell shares of stock in the Philippines stock market or (PSE) Philippine Stock Exchange.
Selling stocks can be a smart strategy for managing your portfolio and reaching your financial goals. Before making a decision, here are some key factors to keep in mind.
6 Reasons Why You Should Sell Your Stocks
- Achieve your investment goals – If your stocks have reached your target price or achieved your desired return, it may be time to sell and reallocate the funds to other investments.
- Diversify your portfolio – Selling some stocks can help you re-balance your portfolio and reduce your exposure to a particular sector or company.
- Avoid further losses – If a stock’s performance has declined significantly and you no longer believe in its long-term potential, selling can help you minimize your losses.
- Take advantage of market opportunities – Selling stocks can free up funds, and that will allow you to invest in new opportunities as they arise.
- Reduce risk exposure – If you’re nearing retirement or have a lower risk tolerance, selling some riskier stocks can help you manage your overall risk profile.
- Generate cash for personal needs – Selling stocks can give you the money you need to cover other expenses such as travel funds, hobbies, new investments, and emergency needs.
By carefully evaluating your investment objectives, risk tolerance, and market conditions, you can determine if it’s the right time to sell your stocks on the Philippines Stock Exchange.
When investors decide to sell, they can do so through a licensed stockbroker who facilitates the transaction on the PSE trading platform. The sale of shares affects ownership and impacts an investor’s rights to dividends and other benefits associated with being a stockholder in a particular corporation.
How to Sell Shares of Stock in the Philippines (PSE)
1. Have a goal or target profit
Before you sell, you must have a clear goal or target profit in mind. This could be a specific price per share, a desired return on your investment, or a strategy to manage your overall portfolio risk.
My personal trading strategy in the Philippines is to lock in profit every time a stock gains 5% or more. Every investor is different, and I follow my own technique.
2. Sell on your target
When your stocks reach your predetermined target, it’s time to execute the sale. Avoid the temptation to hold on to a higher price, as market conditions can change quickly. Sell based on your goals, not on your emotions.
3. Log in to your trading platform
Visit your online trading account or your stockbroker to initiate the sell order. Sign in using your credentials. The top online trading platforms in the Philippines right now are COL Financial, First Metro Sec, and BDO Securities. Select one that is convenient for your banking and investment needs.
4. Visit your portfolio
Locate the specific stocks you want to sell within your portfolio. Select the shares you want to let go. Decide on the number of shares you wish to sell, taking into account your investment goals and the potential tax and transaction fees.
In the example below, I’m selling 10 shares of SM Investments Corporation. I’m happy with the returns, and I’m looking for another attractive buy entry.
5. Place your SELL Order
Click “Trade” or “Sell” and pick the stock you want to sell. Enter the number of shares and set your price. Choose the appropriate order type, such as a Day or GTC order, to ensure you get the best price for your shares. You can choose a DAY order to sell at the current price within the day or a GTC order meaning, Good ‘Til Cancelled.
Double-check all details before hitting “Submit.” Your broker will execute the order during PSE trading hours: 9:30 AM to 3:15 PM, Monday to Friday.
6. Wait for the sell execution
Once you’ve placed the sell order, monitor the progress and wait for the transaction to be completed. The sale may happen instantly or take some time to execute, depending on market conditions.
Once filled, you’ll see a confirmation in your account. The cash from your sale will show up in your account after the settlement period.
Remember, selling stocks is a crucial part of portfolio management, but it should be done with care and consideration for your overall investment strategy. By following these steps, you can execute stock sales in the Philippines Stock Exchange and potentially optimize your investment profit.
What are the Risks of Selling Shares of Stock in the Philippines Stock Market?
While selling stocks can have its advantages, always be careful of the possible risks and uncertainties:
- Missed opportunities – If you sell a stock that subsequently increases in value, you may miss out on potential future gains. This is known as the “opportunity cost” of selling.
- Market timing – This is very tricky because when you aim to sell at the “perfect” moment, it may lead to missed opportunities. The market could keep rising after you sell, leaving you on the sidelines.
- Transaction costs – Each time you buy or sell a stock, you’ll incur transaction costs, such as brokerage fees and commissions. These fees can reduce your overall investment returns.
- Liquidity risk – If you need to sell a large number of shares or a thinly traded stock, you may have difficulty finding buyers, which can result in a lower sale price.
- Emotional decision-making – The emotions of fear, greed, or regret can sometimes drive investors to make impulsive decisions to sell, which may not be in their best long-term interests.
To minimize these risks, it’s helpful to have a well-defined investment strategy, carefully consider your reasons for selling, and seek the advice of a financial professional if necessary.
Tips to Consider Before Selling Your Stocks in the Philippines
Before you decide to sell your stocks in the Philippines Stock Exchange, here are some helpful tips to consider:
- Review your investment goals – Clearly define your investment objectives, risk appetite, and time horizon to ensure that selling your stocks aligns with your overall financial plan.
- Analyze your portfolio – Evaluate the performance of your individual stocks and how they fit within your broader portfolio. This can help you identify which stocks are underperforming or no longer serve your investment strategy.
- Evaluate Market Trends – Watch market trends and news that affect stock prices. The PSE sets static and dynamic price limits to control market fluctuations. These rules help you gauge when to sell.
- Set clear target prices for your stocks – This strategy guides your selling decisions based on market conditions.
- Check PSE trading hours before selling – The market opens Monday to Friday, 9:30 AM to 3:15 PM. Plan your sale during these times for the best results. Keep an eye on economic reports and company news.
- Consider tax and trading fees – You’ll face fees when selling stocks. These include broker’s commission fees, VAT, and other charges. The commission fee is 0.25%, PSE transaction fee is .005%, Securities Clearing Corp. of the Philippines fee is .01% of the gross trade amount. VAT is 12% of commission. Your broker may charge sales tax of 0.006%. Keep these costs in mind when setting your sell price. They’ll affect how much money you’ll actually get from the sale.
- Avoid emotional decisions – Try to make objective, well-informed decisions about selling your stocks rather than being driven by fear, greed, or other emotions.
- Diversify your portfolio – After selling some stocks, consider reinvesting the proceeds into other asset classes, funds, or investments to maintain a balanced and diversified portfolio.
- Timing the market – Sometimes we can’t avoid this, but we can’t have the perfect timing. It’s extremely difficult and often leads to sub-optimal investment decisions. Focus on your long-term investment strategy instead.
- Seek professional advice – If you’re unsure about the best course of action, consider hiring a an expert who can manage your funds for you.
What Happens After You Sold Your Shares?
After selling, the stockholder no longer has claims to any future dividends declared by the corporation. Additionally, they relinquish voting rights and any influence on corporate decisions.
Whether an investor is looking to liquidate assets, take profits, or reallocate funds, understanding the procedures and requirements for transferring shares or a company’s stock is essential for smooth Philippine transactions.
Trading stocks in the Philippines is simple. You need a stockbroker, a trading account, and market knowledge. Follow the rules, pay fees, and time your sales well. With experience, you’ll improve your trading skills and grow your investments.
Good luck with your trading!
Watch the video version of this article:
Make sure you read this before selling your shares:
How to Buy Shares of Stock on the Philippine Stock Exchange
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Disclaimer: This article is for informational purposes only and should not be considered professional investment advice or a recommendation. All investments carry risks, and it is essential to practice due diligence and conduct thorough research before making any financial decisions. We are not connected to or affiliated with any of the companies mentioned in this article.
