The Advantages Of Investing In The Stock Market - Part 1
Previously, I wrote a comprehensive introduction on how to invest in the Philippine stock market. The basic principles that each prospective investors should understand was extensively discussed. Here, the advantages of investing in the stock market, will be tackled.
As I said in the previous articles, the stock market is just another vehicle of investment. You might be asking yourself why would you want to invest in the stock market? What are the advantages of investing in the stock market.
The following reasons could probably answer the above question. Take note, examples given refer to Philippine based companies and currency. If you wish to view the entire article please visit my blog.
1.) The allure of great returns - Most financial expert would tell you that in a bull run the market really goes up. Average returns could be as low as 30 % and as high as 200 %+ per annum or even more. Profit is always expected when you invest in the long term. For example, In 1997, the Globe Telecom Inc. (GLO) stocks price per share was only P152.00. during that time you only spend P 1,520.00 to buy the minimum board lot which is 10 shares. Currently the price per share of Globe is P 1,620.00+. The value of those 10 shares that you previously bought is right now P 16,200, meaning in ten years time your money has grown ten times. This is translated to an average of 30 % return per annum. This is far better than putting your money in a time deposit account at less than 4 % per annum. It is interesting to note that the Philippine stock market is at its highest these days. For the next 2 to 3 years, they say the market will still be in a bull run. Make the best out of this situation.
2.) Investing in the stock market would make you "part owner" of the company that you are investing in. - Franchising a Jollibee outlet could cost you somewhere between 20 to 25 million pesos, not to mention the time and the effort you have to put in. Instead of franchising a Jollibee outlet in order to own your "own" Jollibee why not buy stocks of Jollibee instead ? For only P 5,000 + you get to own 100 JFC shares (Jollibee Foods Corporations - JFC) That means you indirectly own the more than 1414 stores in the Philippines and 175 in other countries not to mention Red Ribon, Chowking, Deli-France, A popular fastfood chain - Yonghe King in China and popular teahouse chain from Taiwan called Chun Shui Tang including Jollibee's pilot restaurant "Tio Pepe's Karinderia." Isn't that cool! You could proudly say to your friends and relatives the next time you eat at Jollibee that you like to eat there because you "own part of the company." Perhaps owning stocks of PLDT or Globe will make you more prompt in paying your bills.
3.) Being part of a "Special group" -
When asked to join a multi-level marketing scheme, I always want to know when the company started. I ask this question because I believe that if it started a long time ago, my chances of recruiting other people will be lessened as most people that I know has already been recruited.
Investing in the stock market may not be the same as engaging in mutli-level marketing as it does not matter whether the market is saturated or not. However it is always so much better to have the knowledge that we are among the first people to "mine" out the gold in the stock market.
Most of those who invest in the stock market are from the class A and B segments of the population. An Asian Development Bank study done in 2005 revealed that only 600,000, out of the of the country's 87 million population, invest in the stock market. This means that only 0.7 % of the population are involved in stock market trading. - 23199
As I said in the previous articles, the stock market is just another vehicle of investment. You might be asking yourself why would you want to invest in the stock market? What are the advantages of investing in the stock market.
The following reasons could probably answer the above question. Take note, examples given refer to Philippine based companies and currency. If you wish to view the entire article please visit my blog.
1.) The allure of great returns - Most financial expert would tell you that in a bull run the market really goes up. Average returns could be as low as 30 % and as high as 200 %+ per annum or even more. Profit is always expected when you invest in the long term. For example, In 1997, the Globe Telecom Inc. (GLO) stocks price per share was only P152.00. during that time you only spend P 1,520.00 to buy the minimum board lot which is 10 shares. Currently the price per share of Globe is P 1,620.00+. The value of those 10 shares that you previously bought is right now P 16,200, meaning in ten years time your money has grown ten times. This is translated to an average of 30 % return per annum. This is far better than putting your money in a time deposit account at less than 4 % per annum. It is interesting to note that the Philippine stock market is at its highest these days. For the next 2 to 3 years, they say the market will still be in a bull run. Make the best out of this situation.
2.) Investing in the stock market would make you "part owner" of the company that you are investing in. - Franchising a Jollibee outlet could cost you somewhere between 20 to 25 million pesos, not to mention the time and the effort you have to put in. Instead of franchising a Jollibee outlet in order to own your "own" Jollibee why not buy stocks of Jollibee instead ? For only P 5,000 + you get to own 100 JFC shares (Jollibee Foods Corporations - JFC) That means you indirectly own the more than 1414 stores in the Philippines and 175 in other countries not to mention Red Ribon, Chowking, Deli-France, A popular fastfood chain - Yonghe King in China and popular teahouse chain from Taiwan called Chun Shui Tang including Jollibee's pilot restaurant "Tio Pepe's Karinderia." Isn't that cool! You could proudly say to your friends and relatives the next time you eat at Jollibee that you like to eat there because you "own part of the company." Perhaps owning stocks of PLDT or Globe will make you more prompt in paying your bills.
3.) Being part of a "Special group" -
When asked to join a multi-level marketing scheme, I always want to know when the company started. I ask this question because I believe that if it started a long time ago, my chances of recruiting other people will be lessened as most people that I know has already been recruited.
Investing in the stock market may not be the same as engaging in mutli-level marketing as it does not matter whether the market is saturated or not. However it is always so much better to have the knowledge that we are among the first people to "mine" out the gold in the stock market.
Most of those who invest in the stock market are from the class A and B segments of the population. An Asian Development Bank study done in 2005 revealed that only 600,000, out of the of the country's 87 million population, invest in the stock market. This means that only 0.7 % of the population are involved in stock market trading. - 23199
About the Author:
Would you like to know more about investment strategies ? Visit the blog of Zigfred Diaz where he blogs about several interesting topics such as investments, financial management, business, making financial online and Stock market investing
posted by X - Men @ 1:17 AM
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