Sunday, 28 June 2015

How to Earn from Stock Market?

Our agenda on this post is to discuss the 5th foundation of money skills which is MAKE IT. Make money thru your chosen investment vehicle.

In this lesson, I will discuss how to earn from the stock market and how the stock market works.

How the stock market works?

Stock market is like a “PALENGKE”. There is a buyer  (mamimili), seller( nagbebenta) and product (stock or company). The main difference is the broker or the trading platform provided by your broker.

Example:
“Gusto mo bumili ng isda at isang kilong bigas,  ang laman ng wallet mo ay 120 pesos lang. Ang gusto mong isda ay tilapia at ang presyo nang isang kilo ay 90 pesos habang ang bigas na sinandomeng  naman ay 35 pesos ang isang kilo .” Ang kabuuang halaga ay 125 pesos ngunit ang pera mo ay 120 pesos lamang. Kailangan mo humanap ng mas murang nagtitinda ng tilapia at mababang klase ng bigas.

Sa stock market ay ikaw ang buyer, at gusto mo magkaroon ng shares sa isang kompanya. Humanap ka ng kompanya na mabibili mo sa halaga lang ng buying power mo, depende rin ito sa board lot ng isang kompanya parang katulad din ng isda na hindi mo kaya ang presyo na 90 pesos kasi kukulangin ang pambili mo ng isang kilong bigas. Kailangan mong humanap ng mas murang kompanya na sa tingin mo ay tataas ang halaga pagdating ng araw. Makikipagtawaran ka sa palengke sa presyo ng isda o pwede rin makuha sa mas mababang offer (ask price), at ang nagtitinda naman ay sa presyo na bidding( bid price). Kailangan ang isdang mabili mo ay fresh at hindi luma. Ganun din sa stock market, ang kumpanya na mapipili mo na bilhin ay dapat maganda for long term meaning mababa pa ang value nya sa time na bibilhin mo.

How to earn from stocks ?
There are 2  ways how to earn from stock market:

1.   Capital Appreciation ( Gains in the increased value of the stock price). The rise in price of the asset or rise in the price of your stocks.


2.    Dividends ( Earnings distributed by the company to stock holders). Dividends can be in the form of cash, stock, and property dividends. Companies can declare dividends because of their good financial standing and can encourage shareholders  to invest more because they can see the returns of their investment. Most stable and secure companies  declare dividends regularly.


Here is the link for 5th Newbie Lesson Video: https://www.youtube.com/watch?v=ECyRpS9sy-E

Sincerely yours,

Jonathan Ruiz
NEWBIE Mentor

P.S. For those who wants to learn advanced stock market lessons, please join us in our journey to financial freedom, http://www.pamacademy.net/


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