Tag: How to Invest in Stocks

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Investing Stocks

How To Invest In Stocks In Your Sleep

What if I tell you you can invest in stocks in your sleep?  How would you react?  I realized you actually can…literally.  Read on to find out how.

Before I proceed, I would like to clarify what I mean when I say “invest in stocks in your sleep”. I don’t mean logging on to your computer like a zombie, eyes closed, still dreaming in your sleep, typing away at your keyboard in the middle of the night and placing an order to buy shares of stock.

I also don’t mean it’s easy to buy stocks.  Doing anything “in your sleep” figuratively means it’s easy. What I mean is more literal than that.

If you’re halfway around the world from the Philippines, you can put your order during your day, and while you’re asleep at night, the official trading hours of the Philippine Stock Exchange begins and your order automatically gets processed and invested in shares of stocks of your choice.

In short, while your order is being processed and buying stocks, you are practically sleeping. How about that? 🙂

Ok, I must admit, it’s more accurate to say “how to buy stocks in your sleep.”

Now, that I’ve got your attention, let me show you exactly how.

How To Buy Stocks In Your Sleep?

I’ve been asked many times before how someone can invest in the Philippine Stock Market outside the trading hours which is from 9AM to 12 noon.  Here’s one from Jezz logged under the comment section of my article Online Stock Market Investing in the Philippines.

“Mr. Allan, Am I right to assume that I can only trade from 9am to 12nn Philippine time? You see, I’m somewhere in the Middle East and 9am Philippine time is only 4am here. I find it quite difficult to trade in CitiSeconline because of this time difference.”

I’ve also had this dilemma myself so I was actually looking for some answers but with no luck.  Until now.

CitisecOnline, Inc has officially allowed placing an order to buy stocks outside the Philippine Stock Exchange trading hours (9AM to 12NN) starting September last year (apologies for sharing this to you just now).  It starts from 1PM to 8AM the next day.  Here’s a definition of Off-Hours orders from FAQs of the CitisecOnline site.

What are Off-Hours orders?

An Off-hours Order or ‘After Trade hours Order’ (ATO) – the Off-hours ATO Order is provided to allow customers to enter orders after closing in preparation for the next trading day. ATO orders are accepted after 1:00PM and before 8:55 AM weekdays and anytime on weekends. Off-hours orders will be collected on a first come first serve basis, and will be sent to the Exchange for posting on a first in first out basis during pre-open session. After posting, all Off-hours orders immediately become Limit Day Orders and cannot be cancelled/modified during (9:15AM-9:30 AM). All orders will be governed by the Exchange’s order regulations. For orders during market activity (9:00 AM to 12:10 PM), please use the regular “Enter Orders” function.

There are many reasons why someone would want to invest outside of the trading hours.  The most common is due to schedule restrictions.

For example, you may be working on a night shift and during the day, you would rather be taking your much needed sleep than go and buy stocks during the normal trading hours at 9AM to 12NN.

Or like Jezz you may be living in the Middle East or somewhere on the other side of the world.  Now, you don’t have to wake up in the middle of the night just to place an order to invest in your favorite stocks.

I was so excited about this development I decided to try it out.  Here are steps I followed to place an off-hours order.

How To Place an Off-Hours Order

1.  Log-in to your account at CitisecOnline.com

2.  Click on the ‘Trade/Portfolio’ tab

3.  Click on the ‘Off Hours Order’ section

4.  Enter your order details: Stock Code, # of shares to buy, and price, etc

5.  Click the ‘Preview Order’ button

6.  Review your off-hour order details

7.  Enter your password

8.  Click ‘Place Buy Order’ button

After following the above steps, you should receive a confirmation that your order has been placed.  Once confirmed, your order will be processed during the next day’s trading hours, regardless whether you’re in front of your computer or not at that time.

It’s a good idea to go check your order again the next day just to see if it was processed successfully.

And yes, you can be sleeping while your order is being processed.  Now, that’s investing in stocks in your sleep! 🙂

Happy investing!

Categories
Investing Stocks

Online Stock Market Investing in the Philippines

This article describes the 3 tips on how to do online stock market investing in the Philippines.  This is part 2 of a 3-part series on the lessons I’ve learned from the recent Money Summit and Wealth Expo.  If you missed the first part, you can read the real-estate investing tips in the Philippines here.

Online Stock Market Investing in the Philippines

It’s been months since I’ve started online stock market investing.  As I’ve shared in my 2010 Financial Goals Mid-Year Update, investing in stocks has been an eye opener for me.  This is the reason why I was so glad to learn more about online investing in the stock market during the Money Summit and Wealth Expo seminar.

Lesson #1 – Investing in the Stock Market Requires Discipline

According to Conrado Bate of CitisecOnline, Inc. (COL), one way to successfully invest in the Philippine Stock Market is to invest continuously and regularly on good quality companies with predictable earnings.  This investing method is known as cost-averaging. 

That means, you need to invest a fixed amount of money every month (or quarterly) regardless if the market is up or down.  If the market is down, your money buys more shares of the company.  If the market is up, your total investment would also go up in value.  So even if the market is up or down, over the long term, your investment will still yield a pretty good return.

This is a pretty simple strategy.  But it is NOT easy.  For one, you have to have the discipline to buy the stocks even if the price is too high and still buy the same stocks even if the price is too low.  Your tendency is to get greedy when the price is too high, and become afraid when the same stock is priced way too low. 

Personally, this has been my experience.  The reality is I am an emotional being and I too am driven by 2 emotions – greed and fear.  For example, initially I planned to invest monthly through EIP but my over excitement has gotten the best of me.  When I bought my first stocks, I was so excited, I bought 3 different stocks right away.  Then I learned about the Super EIP and realized some stocks are being sold 47% below their price.  So I bought some of those stocks too.  That’s greed in action. 

With so many stocks in my portfolio, I don’t have enough money to invest in each of them every month now.  In addition, the price of some of my stocks is down 5% (ouch).  Worse, I don’t know what to do (fear).  Should I buy more of this stock now that it is priced lower?  How about those stocks I own that are now 30% up?  Should I sell them now?

Sometimes, answering these questions is not always easy.  In times like these, having the discipline to stick to your plan will come in handy.

Lesson #2 – Invest Only What You Save, Not What You Need

One very useful advice from a COL agent (I can’t remember her name) during the seminar, was to invest only what you save, not what you need.  The stock market is subject to market fluctuations.  You have no control over how the price will go.  This is the reason why some investors advice on investing only what you save (or what you can lose), and not what you need.

You should NOT borrow money to invest in the stock market especially if you’re a beginning investor.  Save first.  Unless you have the discipline to save, you won’t have the discipline to invest. 

Don’t invest what you need.  Money spent for your needs should NOT be invested into the stock market.  Never use money from your emergency fund.  Never invest the money you are using to pay for your debts.  The stock market is risky precisely because you don’t have any control over the investment.

With consistent saving and investing, your small amounts can become big amounts over the long term through the power of compounding.   Your money is leveraging the consistent growth of the company and the power of compounding to give you a nice return in the future.

Lesson #3 – Don’t Watch The Market

One very good habit that I’ve realized recently, is NOT to track your investments on a daily basis.  This may sound contrarian.  Maybe it is.  Maybe for some they need to watch the market daily.  But personally, I have not found a very good reason to track my investments on a daily basis.

I do track my investments every now and then, maybe once or twice every month.  But it has never come to a point where I would have to watch over it on a daily basis.

This is both to make the most of my time as well as for my own sanity.  I cannot imagine myself being glued to the screen monitor tracking the stock price every minute and then and worrying about the problems of the world such as the European debt crisis, oil problems, election results or what not. 

I understand that my money will be able to work for me over the long term, only if I give it time and stick to my strategy.  I am not investing all of my money in the stock market.  Stocks is only a small portion of my investment portfolio at the moment.  Besides, I don’t invest what I need.  I invest only what I can lose.  That simple thought helps me sleep at night.

 

Readers, what other stock investing tips can you share?  do you think cost-averaging method actually works?

Categories
Business Investing Personal Finance Stocks

How to Invest in the Stock Market in the Philippines in 3 Easy Steps

Investing in the stock market is scary for a lot of people.  Others like Warren Buffet love it and end up making a lot of money in the process.  But everyone who wants to be rich through the stock market needs to know some basic things.

Here are the 3 easy steps I followed in getting started on how to invest in the Philippine Stock Market.

Step 1:  Open a stock brokerage account.

To begin investing in the stock market, you have to have a broker.   As for my case, I used an online stock brokerage firm in the Philippines, mainly because of the convenience of doing it all online, at the same time, taking advantage of the relatively lower fees.

A few months ago, my wife and I opened an online stock brokerage account with CitisecOnline.com.  It was after many many months of thinking about it.  I already wanted to open an account even when I was still in Malaysia but I always found an excuse not to do it.  I’d say, it’s hard to open an account since I’m out of the country-Philippines. But the reality is, I can actually fax or mail the application forms to Citiseconline if I really wanted to and they’d be able to open the account for me. 

I came across CitisecOnline.com again when I attended Bo Sanchez’s Truly Rich Financial Coaching Program after coming home to the Philippines last year. I got to know more about the company and the stock market in the Philippines.  I was pretty convinced this was something I wanted to get involved into so I picked-up the application forms and brought it home with me.  However, taking action on the investment opportunity is a totally different story.  The only thing I had to show for it after a few weeks is the unfilled and un-submitted application forms on my hands.

Getting frustrated with myself for taking a long long time to decide, I finally filled-up the forms and decided to mail it to CitisecOnline.com the next day.  My wife, being the thoughtful person that she is, tried to call up CitisecOnline.com to inquire how we can submit our application forms.  She was pleasantly surprised because CitisecOnline.com offered to pick up the forms for us.  It meant we didn’t have to pay for mailing the forms ourselves after all! So far, so good. 🙂

Step 2: Activate and fund your brokerage account

The CitisecOnline.com agent came to our office that same afternoon to pick up the forms.  He took a quick look at the forms to make sure everything was filled out properly.  After confirming that everything is in order, he smiled and thanked us as he went on his way to file our application forms. 

The application process went on smoothly and after a day we got an email and a call from the COL agent that our application has already been approved and ready for funding. 

Normally, COL requires a minimum amount of P25,000 to fund an account.  For CitisecOnline Easy Investment Program (COL EIP), however, you can open an account for as little as P5,000 minimum. 

We decided to fund our account with P5,000 first.  We went through the nearby BPI branch and deposited the amount to CitisecOnline account number provided to us by the COL agent.  Afterwards, we then faxed the receipt to the agent and waited for our account to be activated. 

After a few days, COL advised us through phone that our account has been activated and our the login name and password have been sent to our registered email address.

Here’s where I encountered a few problems.  The email containing the password was tagged as a spam.  Since the email client I was using then was very old, I went through a lot of trouble trying to un-tag it so I can read the password. With no luck, I requested COL to re-generate the password again. Unfortunately, the new email containing the re-generated password got tagged as a spam too.  Back to square one. 

Starting to get frustrated, I then requested to have my email address changed.  The COL agent sent the application form for changing my email address.  I quickly filled up the form and faxed it to COL. 

Eager to check my account, I waited for their reply everyday, expecting that they generate the new password to my new email address.  But after a week, there was still no response.  This time, I sent an email to follow-up and shared my frustration. 

That same day, I received my login and password via email and was able to view my COL account online. 

Now, we’re getting somewhere! 🙂

 

Step 3: Buy stocks using your brokerage account

After reading the book Rule #1 Investing by Phil Town, I learned that the basic idea of investing is buying a $1 worth of stock for half the price-$0.50.  But calculating the value of a stock is not a very straight forward process, and to some degree, it is more of a guess than anything else.    

I tried to calculate the value but it took a lot of effort digging up historical data.  Fortunately, CitisecOnline provides about 3 years worth of a company’s financial performance but it’s just not enough.  Looking at the negative growth rates in 2008, when stocks and businesses were hit by recession, it is even harder to make a reasonably accurate guess of the company’s future. 

At this point, I had a dilemma. I realized I needed to learn more. However, until I have some money actually invested in stocks, I would not be able to learn through experience.  This meant I had to invest another way, for now.

Enter COL Easy Investment Program (EIP).  The program takes advantage of the Cost Averaging method of investment.   The idea is to invest a fixed amount of money on a regular basis (weekly, monthly or quarterly) on premium growth stocks and take advantage of the power of compounding to grow your money in the long term. 

Since your investing the same amount every week/month/quarter, your money will buy more shares when the market is down.  If the market is up, the value of your shares will also go up.  So in essence, you’re making money both ways.  The only disadvantage is that you have to have the discipline to invest the same amount on a regular basis and leave your money for the long term (COL suggests at least 5 years) and not get carried away by your emotions.

For those investing through COL EIP, you can even choose to invest on the recommended companies/stocks listed on the COL site.

Here are the 3 main advantages of using the COL EIP method of investment. 

  • You don’t have to worry about constantly watching the stock market. 
  • For as low as P5,000, you can invest on solid growth companies.
  • Simple to use, regardless of age, income, or investing experience.

To gain valuable learning experience, I figured this is a great way for me to start investing in the stock market.  Without the necessary experience, I won’t have the knowledge to properly analyze a company and I won’t be able to make an educated assessment of the value of the stocks I want to invest in.

Besides, the Philippine stock market only has a limited number of companies at the moment, so I might as well invest in the most stable of companies for now, those that I think will still be in business for the next 10 years.

I know that P5,000 is a very small amount for some people.  However, it is an amount I’m comfortable
investing in into the stock market.  I may decide to invest more in the future as I gain experience in learning the world of stock market investing, but for now, I’ll stick to investing at least this amount on a regular basis.

How about you?  Have you started investing in the Philippine stock market?  How’s your investing experience been so far?