PSE Bull Run 2008

What a great way to start the new year. Join the PSE Bull Run 2008 and run for/support the economy. It will be held on Sunday, January 27, 5:30 am, at the NBC Tent Parking Lot, Fort Bonifacio, Global City, Taguig. Registration fees for 10K is only P200, 5K is P175, and 3K is P150, until January 20. It will be P250, 200, 175 later.

Forms are available at the Market Education Department of PSE, 4/F PSE Centre, Exchange Road, Ortigas Center, Pasig City, through Katie B. Buenaobra (tel. no. 6887538), or at the Administration Department, 2/F PSE Plaza, Ayala Triangle, Ayala Avenue, Makati City, through Jaja F. Aboc (tel. no. 8194424).

Forms are also available at IntrASports, Inc., both at 37 (455) Malaya cor. Ligaya Streets, Plainview Village, Mandaluyong City (c/o Sandy Paredes, tel. nos. 7470383, 09194489046, 09227976995), and at 78 Dr. Alejos Street, Sta. Mesa Heights, Quezon City (c/o Cristy or Audrey, tel. nos. 7834727, 09197301941, 09155403936).

For more inquiries, contact the Market Education Department at tel. nos. 6887537 to 38, fax no. 6346695, or through the email address marketeducation@pse.com.ph.

Stock Trading Analysis: Fundamental vs. Technical

I wrote before that the key in stock trading is knowing when to get in and when to get out, when to buy and when to sell. In doing this, stock traders use certain analytical tools. There are two - some say rival - models in this analysis, the fundamental and the technical.

Fundamental analysis focuses on the corporate "health" of the listed company. It takes into consideration the company's financial statements, the strength of its management, their competitive advantages as well as their competitors and the state of the market.

Essentially, fundamental analysis compares the book value of the company's shares as against the market value. It assesses the company's management and their business performance, calculates investment risks, and attempts to predict future value.

The principle behind is that, even though markets may mis-price a certain stock in the short-run, the "correct" price will eventually prevail.

On the other hand, technical analysis makes use of trends and patterns in the recorded market price of the listed shares in order to predict future market price. The principle behind is that all information about the stock is already reflected in its price.

Since, we are not always well-informed about the specifics of most of the listed companies, it is advisable for people like us getting into online stock trading to be at least familiar with the methods used in technical analysis.

We need to know the significance of the opening and closing prices, the high and low, bid and ask prices, the market average and the volume of transactions. We should be able to assess the charts not only of the stocks but also of the Philippine Stock Exchange Index, also known as PhiSix.

We too must understand the meaning of terms like "support" and "resistance", among others. This way, we will be able decide for ourselves what stock to buy and what stock to sell, as well as when to do it.

For those who want to really learn, consider attending the Technical Analysis Seminar of Absolute Traders. I hope to be able to do so soon.

Stock Trading Basics

My research and experimentation on stock trading continues. My notes says...

Trading in a stock market like the Philippine Stock Exchange (PSE) means you buy and sell shares of stock of companies listed there. You can do this either through a stock broker or by yourself online. To earn from this trade, you have to know when to get in (buy) and when to get out (sell).

Of course, the stock market provides you some basic information. This include the bid price, ask price, volume and value of all trades for the day. The bid price is the price that buyers are willing to pay for the stock. The ask price is the price that sellers are willing to accept as payment for the stock. The volume and value of stocks traded are also available.

The bid and the ask price is never the same. The ask price is always higher than the bid price. The difference between the two is called the bid/ask spread. I read something about the spread going to the brokers, but newbie as i am, am not exactly sure. For now, it is enough that we are aware that there are bid and ask prices.

Now, I understand that in order to buy a stock, you may order it using the bid price (in that case you get queued with everyone bidding), or you can use the ask price (buying it instantly from those who have expressed willingness to do so. Once you've bought the stock, you then watch if the price of the stock will go up or go down.

In monitoring, you have to take note of the opening, high, low and closing prices. The opening price is the price at which the stock was being traded upon opening of the stock market. Take note that the PSE opens at 9:30 am and closes at 12:00 noon. The closing price is the price at which the stock was trading upon closing.

The high and low prices on the other hand are the highest and lowest prices at which the stock was traded during the day. All these, together with the volume and value of the trade, provide you clues on when to buy and sell a certain stock. To know more, visit Investopedia.com's Stocks Basics.

Be a stock trader with five thousand pesos

In the Cashflow 101 workshop I attended a few months back, I learned that it is not enough that you save. You must know where to invest your savings, know how to make your money work for you. One suggestion was to invest savings in stocks apparently because stocks offer a higher return on investment.

Simply put, a stock is a share in the ownership of a company. It represents a claim on the company's assets and earnings. It is also referred to as a share or equity in the company. As you acquire more stocks, your share in the ownership of the company also increases.

Like anything of value, stocks can be sold and resold. The trade of stocks are usually done through a stock market or a stock exchange. In our country, stocks are traded through the Philippine Stock Exchange (PSE). Its history goes back to the founding of the Manila Stock Exchange (MSE) in 1927 and the Makati Stock Exchange (MkSE) in 1963.

Traditionally, the buying and selling of stocks had to be done on the floor of the Exchange through licensed brokers. With the advent of technology, however, online trading is already possible. That means you can now buy and sell stocks at the comforts of your own home or office.

There are now 7 authorized online stock trading facilities authorized by the PSE. These facilities are in line with PSE's efforts to promote more local investments in companies listed with them. They provide greater access and removes many of the barriers to stock trading.

The big surprise is that you can now get an online stock trading account with as low as P5,000 pesos. Transaction charges are also very minimal at only .25 percent. With this, I think it is now very possible for you and I to earn from the stock market. For those interested, you may want to attend the orientation seminars conducted by Accord Capital's Philstocks.ph.

A word of caution though. Everyone says online stock trading requires a lot of research and monitoring. It is because when you are trading online, you practically don't have a broker to rely on. While your earnings can be limitless, your losses can be tremendous as well.

Still, I'm excited to plunge into this thing called stock trading. I feel like this is the beginning of something great. God bless me.