How does the stock market work?
Stocks represent shares of ownership in a company. By investing in stocks of a publicly-listed company, you become a part-owner and can benefit from its growth and future profits.
However, it's essential to choose your stock investments wisely, as the value of your shares can decline if the company faces losses or underperforms in the market.
Watch the 8-minute video below for a simple explanation:
What's the PSEi?
The Philippine Stock Exchange Composite Index (PSEi) is a collection of the 30 largest and most actively traded companies on the Philippine Stock Exchange. It serves as a benchmark to help you gauge how prices in the stock market are performing.
How can I earn money from the stock market?
There are two ways to earn in the stock market:
Price Appreciation
When the price of the stock increases as the company earns and grows.
Example:
If you buy a share of company ABC for ₱100 and the price rises to ₱110, your price appreciation or gain is ₱10 (10%). Of course, you’ll only realize your gain of ₱10 if you sell at ₱110.
If you choose to hold onto the stock and its price further increases to ₱150, your gain would be ₱50 (50%). However, if the stock price decreases to ₱100 and you sell, your capital gain would be zero (₱0).
Dividends
Some companies share their profits with shareholders through dividends.
Example for two types of dividends:
1. Cash dividend - if company ABC declares ₱1 cash dividend for every share, and you have 1,000 shares, you’ll get ₱1,000.
You can choose to withdraw the money and enjoy your profits, or reinvest it by buying more stocks or investing the additional cash into a fund.
2. Stock dividend - if company ABC declares 10 stock dividends and you have 10 000 shares, then you’ll be given additional 1,000 shares.
Is it hard to start investing in the stock market?
Invest in just a few minutes!
Buying a stock is easier than ever—just a few clicks on the COL platform! Watch the video for a quick guide.
For more information on the features available in your account, click the button below:
Looking for a simple investing strategy? Try cost averaging! Click here to learn more.
How will I know what stock to buy?
Find the right investment for you
Not sure which stocks or funds to add to your portfolio? Click the button below to check out our expert recommendations!
Follow our experts' lead
Access our free research materials and stock recommendations from our team of market experts to help you make smarter investment decisions.
Just log in to your COL account at www.colfinancial.com and click on the Research tab to browse all available reports and guides.