You may have already heard about the stock market, but just curious on how to go about it. Well there is lot of info you can get through the internet and I will try to explain it in a very short detail for you to be able to have an idea.
By the word alone "Stock Market" unlike your typical market place where you will buy your basic food necessities, here you are buying shares from different companies like Jollibee, Max, San Miguel, Ayala, SM, BDO, BPI and so on*.
*You may visit PSE to get more details of complete listing of companies that are open for public trading in the market
Well it may sound good that you will be entitled as one of the "stock holders" (owning portion of shares) of a particular company where you invested your money but it does not mean you already have the control of the company's operation and act like one of the boss.
So how does it work? It's quite simple companies mentioned above listed in PSE will be selling some shares to the public to be able to pool some funds and will be used either for paying up their debts, new expansions for their stores/offices or other new projects the company is trying to accomplish.
In short think of it like lending your money and if the company revenues will yield good results, chances are the company may reward you in the form of a "Dividend" in cash or stocks.
Stocks to mention a few like JFC and MPI are always giving "cash" dividends for every stock holder annually.
Aside from the dividends, if the price "appreciates" in value from the time you make your purchase of shares then that would benefit you when you want to sell your shares and turn into cash.
Always expect the unexpected when you will be in the stock market, there will always be ups and downs for the prices so you need to have some efforts to always check the performance of each company through the use of charts.
So you earn from the stock market two ways and that is "Price appreciation" and Dividends*
*Selected companies only
If the company is not performing well and you happen to purchase at the peak, then don't hesitate and get emotionally attached to your losses but rather get out from your losing position right away, no second thoughts.
Now that you know on how you can earn from the market, then there are two things you will only execute as well, and that is "BUY" and "SELL"
You may earn and lose money in the market that is a fact but if you master the art of trading with risk management those small losses are negligible when you're already profitable.
As a piece of advice, when you venture to this type of market to make money just be sure to be "psychologically" prepared.
For those who come prepared will always have greater edge to other traders in the market.
I wish you luck to your stock journey!
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