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Author:Investa
Investagrams has helped thousands of Filipinos all over the world on their stock market journey. Now, we're aiming to help thousands more! Follow us on InvestaDaily for investing tips and stock market advice to help you reach your first million.
As with any craft, if you want to be one of the greats or at least perform decently you will need to do your homework. You will have to put in the reps and the hours to be able to execute at the highest level. If you’re going to war you will need to know the weapons you’re carrying with you. In the case of trading the financial market, you have both fundamental and technical analysis at your disposal.
In our previous articles, we finally discussed a few basic concepts in the realm of fundamental analysis. A lot of us in the community are technical traders, but it also pays dividends to know a few concepts to understand fundamentals as well. Those who have a finance or accounting background may have an advantage since they already know how to read financial statements, but any non-business person can also read these if he/she puts in the time to learn.
In the first place, why is it important to learn at the very least one of these forms of analysis? Here’s another question, would you go to war without any weapons? If your investment process is simply buying stocks you know since you buy the company’s products or you heard that they give out high salaries to their employees, you may be in a world of trouble.
This is what we call BLINDLY INVESTING, simply placing your hard-earned money in a stock you know without doing any homework. This may have worked if you began investing between 2009 to 2012 and held it then sold it at the market top last 2018. However, imagine if you began doing this during 2019, what would’ve happened to your investment? We’re not bashing long term investing, what we’re trying to help you avoid is blindly investing. Long term investing works, as with any strategy, in specific cycles and there’s a little more to it than just simply buying $JFC because you like their Chicken Joy. You have to do your homework!
So now to the main point of discussion in this article: WHICH IS BETTER? FUNDAMENTAL OR TECHNICAL ANALYSIS?
If you check out some of our older articles here on InvestaDaily and our videos on our YouTube channel, we have already discussed in depth the basics of both Technical Analysis and Fundamental Analysis so you can easily check them out there. So let us give you guys who may not know what these are a quick overview of both.
Technical analysis is basically the study of price and volume behavior to make better investment decisions. You mainly use charts and other tools to know which stocks to buy. Once you study technical analysis, a chart would now not simply look like a bunch of lines. You’ll see patterns that occur over and over again. You’ll learn concepts like Support and Resistance, Breakouts and Breakdowns, Trendlines, Moving Averages, Oscillators, and many more.
On the other hand, the fundamental analysis takes a deeper look at the actual company to make better investment decisions. You dig deep into their financial statements to see if the company is really profitable or if it’s too much burdened in debt. You compare financial statements of different companies across the same industry to see which is a better investment. You try to see if a company is overvalued or undervalued. Once you study more on fundamentals, you’ll learn concepts like P/E Ratio, Book Value, Earnings Reports, and the like.
So now it’s time to answer the question: Which is better? The answer is — IT DEPENDS. Both approaches work fine, the only way to truly answer the question at an individual level is to try both out for yourself. You need to see which approach works better for you as a person; taking into consideration your personality, characteristics, and circumstances.
Is it enough to learn just one? YES! There are countless successful traders around the world who trade using either only fundamental or technical analysis. However, being a specialist at their approach, they most likely put in their 10,000 hours to be a master at their style.
Can you do both at the same time? YES! Technical analysis can tell you WHEN to buy, while fundamental analysis can tell you WHAT to buy. There are also countless market wizards who use a combination of both approaches in their overall investment strategies.
So now it’s up to YOU to decide which works best for you. If you don’t know these concepts yet, again, you can check out our other articles here on InvestaDaily or both our Youtube and Facebook page for informative videos on both topics.
This week’s featured trader is no one other than one of the most active members of the community, Jet Toyco! If you guys have been with us since 2018, you would’ve remembered that Jet was one of our speakers during Uprising: The Trading Revolution 2018 event where he generously shared his entire trading journey with us. Since then, Jet has been continuously posting high-value content on both our social platform on Investagrams and the Investagrams Trading Community FB group.
If you’ve been following Jet for some time now on Investagrams(if you haven’t, you’re missing out) you would know that he posts content on a daily basis. Whether it’s about trading principles he learned from other great traders like Rayner Teo, practical advice he learned throughout his journey, and much more. Jet also does a weekly Q&A session open to everyone in the community where he answers questions in video format and posts it on our Facebook group: Investagrams Trading Community.
He is also very generous to share high value content he’s found on other platforms as well. Here he shares a very RARE video of one of Mark Douglas’, the father of trading psychology and author of Trading in the Zone, seminars a few years back. If you want to watch the videos, we highly suggest checking the post on Jet’s wall on Investagrams!
Jet also doesn’t only post about topics related to trading or investing in the financial markets. He is also a practitioner of proper handling of personal finances. In this post, he shares some practical advice so we can all achieve financial freedom. He reminds us to track our expenses/income, simply our lifestyle, have a budget plan, eliminate consumer debt, and the like. He reminds us to not start a business, or trading for that matter, to achieve financial literacy. But to start doing business or trading once we are financially literate.
We are all grateful for people in the community who take the initiative to share their learnings, insights, and experiences about the market and life to other trades. A community is only as strong as its members, without people like Jet, our community would not be complete.
The Investagrams Team would like to congratulate Jet Toyco for being our featured trader of the week by being a team player towards the community. You will receive FREE 1-month access to InvestaPRO!
As a newbie or beginner in the finance industry, some of us have encountered ‘Price to Earnings Ratio’ or commonly called P/E Ratios and wondered what does it mean and how does it help in our investing research.
In this article, we will discuss and give you the foundation of Price to Earnings Ratio including some examples that you might need for reference. Let’s start!
The Price to Earnings Ratio is commonly used by investors to get a quick idea of how the market values a certain company.
It is a ratio for valuing a company based on its current share price relative to its per-share earnings. It is also called the price multiple or the earnings multiple because it shows how much investors are willing to pay per dollar of a company’s earnings.
For example, if a company’s P/E Ratio is 10, then an investor is willing to pay 10x for every P1 a company earns. It is more so a way to recognize how the market currently perceives a stock than its actual valuation, as it takes into account the market price. It gives a glimpse into how investors view or value a certain company, and helps determine a company’s market value as it shows what the market is willing to pay for a stock based on its past or future earnings.
Formula
Price to Earnings Ratio = Market Value (Stock Price) per share/Earnings per Share
The Earnings per Share (EPS) is calculated by dividing the net profit by the number of outstanding shares. It indicates how much money a company makes for each share of its stock. A higher EPS indicates that the company has more value, as it makes more for each share of stock.
Two types of P/E ratios are commonly used: Forward and Trailing P/E. The Forward P/E ratio uses future earnings as guidance, hence why it is also called “estimated price to earnings”. Figures used are predictions of future earnings, and this ratio is useful if you want to compare present earnings to future earnings. The Trailing P/E, on the other hand, relies on past performance and the company’s earnings over the past 12 months. Compared to the Forward P/E, it is more objective, as the figures are factual rather than predictions.
Importance of P/E Ratios
The P/E Ratio is best used when making comparisons, either between different companies in the same industry or against the company’s own historical records. The P/E ratio standardizes stocks with various prices and earning levels, making it easier to compare various stocks.
A high P/E ratio suggests that investors are expecting a higher earnings growth in the future, because at present, people are willing to pay more per share. It means that the price is much higher than the EPS, suggesting that the market values a certain company greatly, indicating positive future performance and high growth expectations. However, it is not always a good thing, as a company may be overvalued or may not be able to deliver on the high expectations. As such, investing in a company with a high P/E ratio is considered a riskier investment. On the other hand, low P/E ratios suggest that a company may be undervalued, meaning that at the moment, it is a good bargain. Investors can opt to buy now and reap profits in the future, when the stock price goes higher as a result of the market correcting it. If a company is experiencing losses or has no earnings, its P/E ratio will be posted as N/A because the earnings fall below or are equal to 0.
Examples
Company A and Company B
Company A trades at P50 per share, and Company B at P70 per share. At first glance, Company B seems more expensive and more highly valued; however, by using the P/E ratio, we can reach a better conclusion.
Let’s say that Company A’s earnings for the fiscal year is P20M and they have 3M outstanding shares. This would make their EPS P6.67 per share. Plugging that into the P/E ratio equation, its P/E ratio would be P7.5. This means that investors are willing to pay 7.5x for every P1 earned by the company.
For Company B, let’s say that its earnings for the fiscal year is P15M and they have 3.5M shares outstanding. This would make their EPS P4.29. Plugging that into the P/E formula, the P/E ratio would be P1.5: investors are willing to pay 1.5x for every P1 earned by the company.
By standardizing the prices using the P/E ratio, we can see that Company A is valued much higher than Company B. As an investor, you could buy Company B now at a bargain because the market is undervaluing it. Another choice is to invest in Company A because investors are confident in its future growth, though it is more risky of a choice.
Company C and Company D
Company C and D both trade at P40 per share respectively. This does not mean that they have the same value and potential for growth; let us use the P/E ratios to get a more conclusive answer.
Let’s say that company C earned P20M for the fiscal year, and have 5M shares outstanding. This would make their EPS P4 per share. Plugging that into the P/E formula, the P/E ratio would be at P10, meaning that investors are willing to pay 10x per P1 earned.
For Company D, let’s say that they earned P30M for the fiscal year and have 6M outstanding shares. Its EPS would then be P5 per share. Plugging that into the P/E formula, the P/E ratio would be at P8, meaning that investors would pay 8x per P1 earned.
By using P/E ratios, we see now that though their market price may be at the same level, it doesn’t mean that their underlying value is the same. By being aware of these ratios, we can make choices that are better suited towards what we want to get out of our stock choices.
As a last note, it is important to remember that there are no set rules when dealing with P/E ratios. The P/E ratios could mean various things depending on the industry or other factors. It is necessary to use these ratios along with taking into account market conditions and world events.
Welcome to the second round of INVESTA PRO LEAGUE!
THE CHALLENGE JUST GOT BIGGER AND BETTER. ARE YOU READY?
As traders, to achieve consistent results we have to be able to commit to mastery. We must be willing to face challenges that will help in our growth in this craft. What better way to achieve continuous improvement than to hone your skills, test your strategies, and compete with fellow traders in this another round of one-month competition?
The Investa Pro League is open to ALL. The competition will run for ONE (1) MONTH from August 3, 2020 until August 28, 2020.
Winners and Prizes:
The top three (3) participants with the highest account value at the end of the trading round will be announced as the winners.
Each winner will receive a corresponding cash prize as follows:
A. You must have an Investagrams account. If you don’t have one yet, you can sign-up here for FREE.
B. Anyone can join the competition. Participants may register until August 2 (Sunday), before the competition officially begins on August 3 (Monday).
C. Registration comes along with a subscription of InvestaPro and InvestaPrime to help you have an edge on your trading game.
D. Complete your payment through Credit/Debit Card, Bank Deposit/Transfer, 7–Eleven (Coins.ph), M-Lhuillier, or Cebuana Lhuillier. You will be notified once your payment has been confirmed.
E. Validation of ID. From your Transaction Invoice, or when you click on “Investa Pro League 2020” competition room under the Virtual Trade tab in Investagrams, you will be led to an instructions page in order to validate your identity. If you haven’t uploaded your Proof of Identity yet, please do so, as this is a required step for all participants. Once approved, you will receive a notification and your Proof of Identity under Account Settings will already be marked as Completed. Access to the official competition room will be granted.
F. Important note: Only one (1) entry and account per person is allowed. If you have more than one (1) account to join the competition, you will be disqualified immediately.
2. Investa PRO League will be accessed through the Investagrams Virtual Trading Platform (https://www.investagrams.com/vTrade) and participants will start with Php 100,000.00 virtual money to trade.
3. Participants can only trade liquid and actively trading stocks (we have filtered out which stocks fit this criteria) and have taken out illiquid names that have wide spreads that can be easily abused. The whole stock list can be accessed once you are accepted into the competition. The tradable stock list can be changed.
4. Upon buying a stock, you can only sell it after 20 minutes. This will protect the competition against ‘rinse-and-repeat’ abuses on illiquid stocks that are not realistically in-line with real market mechanics.
5. To promote diversification, maximum exposure in a single stock can only be 1/3 or 33.33% of the portfolio. This requires the participant to buy at least 3 different stocks should they want to fully invest their portfolio. The system won’t allow you to allocate more than 33.33% in a single stock.
6. Buying and Selling Conditions. Participants now have two options when transacting. The first option is to transact using the current price of the stock and use market orders to buy and sell specific stocks at their real-time prices. The second option is to transact using our new LIMIT ORDERS. By using Limit Orders, you won’t need to watch the market the whole day in order to transact in the market.
Buy – You can buy the same stock multiple times within a day.
Sell – You can only sell the same stock two (2) times in a day. This will be strictly observed in order to avoid abuse. This includes selling in TRANCHES. Example: If you bought 1000 shares of $SMPH at 29 then sold 300 shares at 29.10, then you have only one (1) sell transaction left for $SMPH within the day.
7. Holding period for all stocks
We will be applying the twenty (20) minute time lock for taking profits to ALL STOCKS to avoid widespread and rinse-repeat trades. There are instances where specific names are simply bought due to the 2-2.5% widespread sold after 5 minutes once the stock has been ticked up.
There will be no timelock or restrictions when selling at a loss.
8. Revision of Tradable Stocks. Investagrams has the right to remove any stock from the list should it suddenly become too illiquid, abusable and/or delisted. Furthermore, Investagrams may also add new stocks on the tradable list as new stocks become more active and tradable in the market. All changes will be announced before implementation.
In such cases that a stock is to be removed, we will follow this process:
Investagrams shall notify all the participants via the Investagrams Platform before the market opens.
If you still have the stock in your portfolio, you can sell it at any point in time at your discretion.
9. Initial Public Offering (IPO). All upcoming IPOs that will happen while the Investa Pro League is on-going will be added on its SECOND (2nd) trading day.
10. For stocks that will be detected by our WIDE-SPREAD DETECTION SYSTEM (WSDS). The Wide-Spread Detection System’s main condition is that the first (1st) best bid and ask should never be more than 2% at any moment during open market session.
Fig 1. Real-time Market Depth / Orderbook showing the first (1st) best bid-ask data.
Example: $ATN (Refer to Fig. 1)
Given:
1st best bid = 1.11
1st best ask = 1.14
Formula:
X = (1st best ask – 1st best bid) / 1st best bid
Condition:
If X is greater than 2% then WSDS detects that the stock is wide-spread and can be abused.
Solution:
X = (1.14 – 1.11) / 1.11 = 0.02700 x 100% = 2.70%
Verdict:
Since X is greater than 2% then the stock is wide-spread as computed by the system.
The participant will be given a prompt that the detected stock is not tradable upon executing a buy or sell transaction.
The stock will again be tradable once the system detects that the spread of the 1st best bids/asks are below 2%.
11. On Trading Abuses.
Day trading opportunities on natural market moves are normal, but please take note that Investagrams will be on full-guard against participants that abuse illiquid opportunities. We want our winners to show real trading skills that are applicable in the PSE. Abuse of intraday spread trades will NOT BE TOLERATED. These rules are set to protect against the usual ‘rinse-and-repeat’ abuses that are mostly used in virtual trading competitions like this.
Any player that has more than 10% of their profits from rinse-and-repeat wide spread, illiquid and other abusive trades will be penalized or DISQUALIFIED depending on the severity of their offenses. We will be able to validate this through our data and algorithms that verify the historical transactions of each participant.
Any form of hacks, cheats, and abuses shall not be tolerated and will have corresponding repercussions. Suspicious behavior that may not be specified in the rules may also be flagged as ‘abusive’ trading behavior. Warning shall be sent after Investagrams has reviewed and confirmed that the actions are against the integrity of the competition. All trade records shall be verified and those who fail to follow the rules will be disqualified.
Participants will only be given ONE (1) warning, any participant who has constantly repeated any abusive trading behaviors (whether illiquid stocks, system abuses, loophole abuses) will instantly be DISQUALIFIED. Investagrams has the right to review any suspicious activity, and if the behavior is deemed inconsistent with real life trading then the said player shall be disqualified.
Questionable Transactions. Questionable transactions will be cross-checked through the buy and sell transaction time and the traded stock. Stocks that have more than 2% consistent gaps in the one (1) minute timeframe within the transaction period shall be deemed invalid and Investagrams has the right to deduct the profits from the said transactions. It is normal to trade natural intraday moves and gaps can really happen, but if a participant is constantly trading stocks that have gaps within one (1) minute timeframe and their profits from these kinds of scenarios make up more than 10% of their total profits, then he/she will be automatically disqualified.
Fig 2. Example 1 for one (1) minute time frame gaps with buy (green arrow) and sell (red arrow) transactions
Fig 3. Example 2 for one (1) min. time frame abusable 2% gaps
Fig 4. Example 3 for one (1) min. time frame abusable 2% gaps
Investagrams will warn the player that is proven to be constantly transacting with illiquid stocks with 2% one (1) minute gaps. Basically, any stock that has 2% spreads and do not really have a trend is included in this definition. After the first warning, any player that is proven to repeat this kind of behavior shall be disqualified.
12. Trading Halt. Stocks that are on a trading halt will not be tradable during the halt and will be tradable again during the announced lifting time.
13. Trading Hours: Weekdays from 9:30AM – 1:00PM (This is the current PH trading hours and will be changed once the enhance community quarantine is lifted. Meaning, you can’t trade during off-hours and on weekends.)
14. Participant rankings are constantly updated every 10-minutes and automatically ranked by Investagrams system according to net profit gain/loss.
15. At the end of the competition, the participants with the highest net profits will win. The top 1 to 3 participants shall be announced the official winners.
16. Modification and adding of rules. Investagrams has the right to modify the rules of the competition and add protective measures against any future abuses that may arise to ensure the integrity of the Investa Pro League. Announcements shall be made if there are any changes. Rest assured, we prioritize keeping the competition as FAIR as possible to all participants.
17. Ignorance of the rules is no excuse. All participants are expected to have read and understood the rules and mechanics of Investa Pro League. These are published for the participants’ information and protection. Ignorance of these rules and mechanics is not an acceptable excuse for violation.
18. Joining the Investa Pro League means that you agree with all the clauses mentioned above.
19. If you are part of the Top 3 winners, the FINAL DEADLINE to claim your cash prize is on SEPTEMBER 30, 2020. The cash prize will not be given anymore past this date.
Though we are slowly easing out of ECQ and some semblance of normalcy can be seen, many of us still have much more time on our hands than we are used to. Plus, with the rainy season fast approaching, the cozy atmosphere makes for the perfect time to delve into books! Below we have compiled a list of books to read, ranging from business and finance to fiction books perfect for rainy days or whenever you feel like letting your mind wander away from reality for a bit.
The Power of Habit (2014) by Charles Duhigg
We all know that habits are an essential part of our lives – but this book goes even deeper in showing that habits are present in every single thing we do. Finding the right habits and understanding how to stick to them is essential to success, and this book dives deep into what exactly habits are and how to mold them into self-propelling drivers for success. It goes across the globe, from top companies to the Civil Rights Movement, to explore just how essential habits are in creating success.
Rich Dad Poor Dad (1997) by Robert T. Kiyosaki
One of the most well-read non-fiction books, it teaches valuable lessons about money. One of the key takeaways from Kiyosaki’s book is the importance of investing early and instilling this in the youth. Many lessons can be learned about the value of money, how to make it work for you, and how to make the most of what you are given.
The Essays of Warren Buffet: Lessons for Corporate America (Fifth Edition, revised 2019) by Warren Buffet and Lawrence Cunningham
This collection is like a treasure chest for would-be investors – with tips and tricks from one of the most prominent investors in the world, this book provides knowledgeable insights on the stock market and how to work around it with ease. This is a collection of letters written to Buffet’s shareholders throughout the years, giving any reader insider knowledge on the workings of one of the most successful investors of all time.
The Intelligent Investor (1949) by Benjamin Graham
A cult classic for investors, this book has laid the groundwork for many prominent trading philosophies today. Warren Buffet himself swears by this book, and though publishes more than 50 years ago, its trade secrets still hold true today. Though not the easiest book to digest, the concepts introduced are definitely worth the read.
Grit (2016) by Angela Duckworth
A must-read for anyone struggling to find meaning in their work, set direction in life, or simply just looking for some extra motivation. Each page is packed full with wisdom and scientific knowledge to back up claims about motivation and hard work, allowing everyday readers to gain a deeper understanding of what it takes to truly find the drive and motivation to persevere. It is easy to follow along with and an engaging read, sure to captivate readers of all ages and professions.
The Bluest Eye (1970) by Toni Morrison
The first novel by Pulitzer Prize-winning author Toni Morrison, this novel has become a hallmark of the fight against racism in America. It explores the early life of a young, African-American girl named Pecola who faces oftentimes subverted but sometimes painstaking, blatant racism in the years following the Great Depression. Told through the point of view of people around her, it paints a clear picture of just how deep the roots of racism grow in American culture.
Kafka on the Shore (2002) by Haruki Marukami
By world-renowned Japanese author Haruki Marukami, this book is often praised to be the best book to start with by the author. It was named one of the 10 Best Books of 2005 by The New York Times, and engages readers with its enticing use of language and imagery. Telling the intertwining stories of a young boy and ageing man, it paints a picture that is detached from reality with its magic realism, yet is strangely able to hit home at the same time.
For our featured trader of the week, we have chosen Secret Jockey a.k.a. @buhospamore for his/her efforts in engaging the community!
Often when you scroll through the posts in the Investagrams platform, it is common for most users to talk about their different stock picks as well as why they believe in them. Although these posts are able to provide information, it is often refreshing to see a user who talks about the principles and processes involved in trading.
Secret Jockey is one of these people as some of his posts are addressed to newcomers to the stock market.
In one of his posts, the terminologies used by veterans are listed down. Although these are only the basic terms used, newbies would most likely appreciate it as it can be confusing to follow the thoughts as well as conversations of traders in the platform without knowing what some of the terms used actually mean.
Another post, directed towards newcomers again, holds especially true in light of recent events. Ever since the bloodbath occurred where the $PSEi rapidly fell towards the 4,000 levels, there has been a sudden influx of interest in investing. We’re sure most of you traders out there have received a message or two from a friend or acquaintance asking for tips on how to invest in the market. As one of our missions is to increase the financial literacy of Filipinos, we implore non-investors to participate in the stock market. However, what we would like to encourage is responsible investing.
Investing and trading isn’t about just putting money in the markets and then calling it a day, just waiting for a profit. As mentioned by Secret Jockey, there is no easy money. The simplest way to put it is that investing is simple, but not easy. You don’t have to be scared of not being smart enough because the market doesn’t care about who you are; it cares about the conscious effort that you put into making sure that your capital is safely compounding itself.
As the saying goes, there is nothing worth it that doesn’t come with the price of effort and time. If you’re hesitating because you don’t know how to start, don’t fret! That’s why we’re here. You can head on over to the Investagrams platform and find various informative articles that tackle how to start investing (READ: How to Start Investing in the Philippine Stock Market).
Just head on over to the “Learn” tab on the upper right side of the webpage and enjoy the curated content that we update from time to time in order to help more people become comfortable with the stock market.
Although we have seen quite a few rallies these past few weeks, it can still be said that the equity markets aren’t out of the woods just yet. In just a snap, we could go back to a strong bear market that could easily wipe out gains and cut down the amount of opportunities available.
Whether you’re a novice or a veteran trader, this advice holds true: always try to sharpen the saw. Find your edge, or in layman’s terms your advantage, and make it as sharp as possible. Also, if the state of the market is not suitable for your edge, then don’t be afraid to sit out. You don’t have to be a genius that catches every move in order to be a good trader.
Warren Buffett, an icon in investing, likened stock trading/investing to baseball and said that “in this game, the market has to keep pitching, but you don’t have to swing. You can stand there with the bat on your shoulder until you get a fat pitch.”
Again, we would like to congratulate Secret Jockey for being our featured trader of the week by being a team player towards the community. You will receive FREE 1-month access to InvestaPRO!
Now that we have an understanding of the US markets and have been introduced to international trading as a whole, it’s time to truly begin our trading journey. To truly understand the markets, we must dive into them ourselves; however, this in itself is not an easy task! Below, outlined are some steps you can take to begin your journey and make sound decisions with regards to trading through a broker. We have also provided information on trading independently on international markets, if that is the route you want to go. There’s no better time to start trading than today, so read on to for some tips on doing just that!
Brokerage Trading
Many Filipinos opt to trade through a broker as it is easier and more hands-off. If you do not want to invest all your time into monitoring the market, trading through a broker is the best option. The broker is able to make decisions for you and put your money in different funds that will grow over time without the need for constant monitoring. However, not all brokers are created equal; here are some steps to finding the right one:
1. Know your needs and your current financial standing.
Before looking into brokerage options, it is important to understand what it is you want to get out of your broker – do you want them to make all the decisions for you? Or do you want them to provide advice, but you still make the final decision on your investments? Knowing the answer to these questions will be a big help when communicating with potential brokers, as you will know exactly what you want from them. At the same time, it is crucial to have a firm understanding of how you are doing financially. Evaluate how much you are able to shell out for investments for easier and quicker communication between the two parties.
2. Based on your needs, research on potential brokers.
There are many brokerage firms in the Philippines, differing in the amount of commission they charge and the extent of services provided. Look for reviews online and get background information on the company as well. This will allow you to gauge whether the company is handling the money given to them well and if they are able to generate an adequate return on investments. Additionally, it would be helpful to get the opinions of friends, as they will be able to give honest, real-life advice.
3. Narrow down your brokerage options.
This will depend on the research you were able to do on the companies, how much they charge, and whether they are providing the best services that cater to your needs.
4. Contact brokers.
Before finalizing a brokerage company, it is important to communicate with them. This will be helpful in understanding whether they provide great customer services as well as to iron out any other concerns you may have. Having a voice call or any form of communication with them will also help you understand whether this is the right broker for you.
With those steps in mind, the best thing to do is to do your research thoroughly and don’t jump in empty-handed. You must have a clear understanding of what you are getting into, as this is a big investment to make. To start with, some top brokerage firms in the Philippines are COL Financial, BPI Securities, and First Metro Securities; however, there are many others out there, so be sure to still do your research!
Online Trading Platforms
Another way to trade internationally is through online trading platforms. This is for traders who want to take a more hands-on approach, and are interested in investing beyond just the benefits it reaps. This way requires more time and effort but is especially rewarding when you see the fruits of your work. Below are two trusted trading platforms to kickstart your journey.
eToro is a social trading company that provides a platform to trade assets such as Forex, commodities, cryptocurrencies, and more. Importantly, they have a patented CopyTrader addition that allows you to copy the trading portfolio of successful users. For beginners, this proves especially useful if you do not want to invest your time heavily in monitoring the market. There are no commission fees when trading on the platform, and blue-chip companies such as Apple, Facebook, and Amazon are readily traded. They have various educational materials such as blog posts and articles that provide knowledge on the financial markets. Overall, eToro is a great platform to use if you are just starting your trading journey, but still want the freedom to make your own trades.
XM is an international investment firm and an industry leader in providing trading platforms and tools. It delivers trading services in Forex, US equities, energies, precious metals, and indices. Additionally, XM provides its users with free account managers, financial market tutorial videos and webinars, live help, access to Forex data and analytics, and many more. For users that are still wary about entering international markets, XM provides the option to open a demo account, allowing you to trade up to $100,000 in virtual cash. Users can opt to start trading in real financial markets for as low as $30 to open an account. Given its wide array of services and tools it offers, it may be overwhelming to those who do not have as much experience in trading. However, they also offer many research and education tools, including live training and technical summaries, which will help ease the worries of many beginners.
With all this new information in mind, it may get overwhelming to narrow down your choices and begin, but do not be daunted! As with any new venture, the beginning is always the hardest part; however, once you get into the groove of it, the whole process becomes enjoyable. With this in mind, we hope that you will be able to begin your journey with confidence. The best time to start investing is now!
The Going Global series aims to introduce traders, whether beginners or advanced, to the international stock markets. Throughout this series, we will explore the pros and cons of international investing, how to kickstart your international portfolio, and many more tips to navigate this more complex trading world.
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