Some terminologies worth noting: Par Value, Book Value, Market Value

I know nobody likes the technical stuff specially in investing but one has to familiarize oneself to understand the business lingo, remember one must increase their financial I.Q. because information gives one an edge when it comes to investing. So First lets define these terms(some I will barrow from somewhere else to be clear).

Par Value: The nominal monetary amount assigned to a security by the issuer.

Simply put it is the peso amount that is setup by the company for their shares of stock. For example Company X is incorporated and that the shares of stock are assigned a par value of Php 1.00 per stock. Some companies has a no-par value stock. Having a par value helps the company have an exact measure of their capitalization because such things must be recorded. In some instances when the stock is first issued by the company a stockholder may invest more than the setup par value which results into a over-payment. In practice this is not recorded as gain but rather it is an additional capital recorded as additional paid in capital.

Ok ok I know it's to technical. The question now is that why do you as an investor need to know what is PAR Value. Well as I said it is a measure. It will be a good reference when buying stock. Probably you will notice the importance of this term when you compare Par Value and Market Value for example take PLDT Stock(listed as TEL, go to www.pse.com.ph and type TEL in the Right top search named Symbol Lookup). When PLDT Stocks were first issued it was at Php 5.00 only but as of last Friday the Market value is at Php 2, 445.00. Now do you see what I mean.

Book Value: It is the current value of a stock as per company's books.

Ok let me put it this way, it is the net worth of the company per stock. Well what's the use of this value anyways you may ask. As I have discussed in my previous post it is important to note what a company's net worth is. Net worth implies that the company is either a company in good financial position or not. A negative net worth is called a deficit and when we say deficit it means the business owes more than owns more. The likelihood of that company going bankrupt is high thus one has to be on the look out. It also helps investors to determine if such stock is undervalued as compared to its current market price. For example stock of Company X has a market value of Php 25.00 but its book value is at Php 45.00. What does this mean? It simply means that the market sees a different value for the company and it is a indication for an investor to further analyze why such is happening given the strong standing of the stock.

Market Value: price as determined dynamically by buyers and sellers in an open market.

Simply said it is how anyone will buy the stock based on their perceived value of the stock. Let me give you an example. Back in my province some businessmen goes around the neighborhood and check the mango trees in our backyard. If they see that it has a lot of buds they predict that this tree will bear many mangoes in the near future and will ask the owner if they can "pakyaw" (not Manny Pacquiao) our tree. Price negotiations will run and soon an agreed price will be settled. The basis of such price is the current price of mango any sane person would ask or buy such product. Nobody will buy a mango for Php 20,000.00 per kilo but rather it would be in a range of Php 40-120 per kilo range depending on the demand and supply level. 

Market price is the price at which stocks are bought and sold. In the case of the Market price indicated in the PSE it is the last traded price which is called closing price. This is important because as I said it will be the basis of any sane investor. In the stock market, brokers will have their bid and ask values. As the course of trading happens this value changes depending who is willing to sell or buy at a certain price.

Some terminologies worth noting: Par Value, Book Value, Market Value

I know nobody likes the technical stuff specially in investing but one has to familiarize oneself to understand the business lingo, remember one must increase their financial I.Q. because information gives one an edge when it comes to investing. So First lets define these terms(some I will barrow from somewhere else to be clear).

Par Value: The nominal monetary amount assigned to a security by the issuer.

Simply put it is the peso amount that is setup by the company for their shares of stock. For example Company X is incorporated and that the shares of stock are assigned a par value of Php 1.00 per stock. Some companies has a no-par value stock. Having a par value helps the company have an exact measure of their capitalization because such things must be recorded. In some instances when the stock is first issued by the company a stockholder may invest more than the setup par value which results into a over-payment. In practice this is not recorded as gain but rather it is an additional capital recorded as additional paid in capital.

Ok ok I know it's to technical. The question now is that why do you as an investor need to know what is PAR Value. Well as I said it is a measure. It will be a good reference when buying stock. Probably you will notice the importance of this term when you compare Par Value and Market Value for example take PLDT Stock(listed as TEL, go to www.pse.com.ph and type TEL in the Right top search named Symbol Lookup). When PLDT Stocks were first issued it was at Php 5.00 only but as of last Friday the Market value is at Php 2, 445.00. Now do you see what I mean.

Book Value: It is the current value of a stock as per company's books.

Ok let me put it this way, it is the net worth of the company per stock. Well what's the use of this value anyways you may ask. As I have discussed in my previous post it is important to note what a company's net worth is. Net worth implies that the company is either a company in good financial position or not. A negative net worth is called a deficit and when we say deficit it means the business owes more than owns more. The likelihood of that company going bankrupt is high thus one has to be on the look out. It also helps investors to determine if such stock is undervalued as compared to its current market price. For example stock of Company X has a market value of Php 25.00 but its book value is at Php 45.00. What does this mean? It simply means that the market sees a different value for the company and it is a indication for an investor to further analyze why such is happening given the strong standing of the stock.

Market Value: price as determined dynamically by buyers and sellers in an open market.

Simply said it is how anyone will buy the stock based on their perceived value of the stock. Let me give you an example. Back in my province some businessmen goes around the neighborhood and check the mango trees in our backyard. If they see that it has a lot of buds they predict that this tree will bear many mangoes in the near future and will ask the owner if they can "pakyaw" (not Manny Pacquiao) our tree. Price negotiations will run and soon an agreed price will be settled. The basis of such price is the current price of mango any sane person would ask or buy such product. Nobody will buy a mango for Php 20,000.00 per kilo but rather it would be in a range of Php 40-120 per kilo range depending on the demand and supply level. 

Market price is the price at which stocks are bought and sold. In the case of the Market price indicated in the PSE it is the last traded price which is called closing price. This is important because as I said it will be the basis of any sane investor. In the stock market, brokers will have their bid and ask values. As the course of trading happens this value changes depending who is willing to sell or buy at a certain price.

Some terminologies worth noting: Par Value, Book Value, Market Value

I know nobody likes the technical stuff specially in investing but one has to familiarize oneself to understand the business lingo, remember one must increase their financial I.Q. because information gives one an edge when it comes to investing. So First lets define these terms(some I will barrow from somewhere else to be clear).

Par Value: The nominal monetary amount assigned to a security by the issuer.

Simply put it is the peso amount that is setup by the company for their shares of stock. For example Company X is incorporated and that the shares of stock are assigned a par value of Php 1.00 per stock. Some companies has a no-par value stock. Having a par value helps the company have an exact measure of their capitalization because such things must be recorded. In some instances when the stock is first issued by the company a stockholder may invest more than the setup par value which results into a over-payment. In practice this is not recorded as gain but rather it is an additional capital recorded as additional paid in capital.

Ok ok I know it's to technical. The question now is that why do you as an investor need to know what is PAR Value. Well as I said it is a measure. It will be a good reference when buying stock. Probably you will notice the importance of this term when you compare Par Value and Market Value for example take PLDT Stock(listed as TEL, go to www.pse.com.ph and type TEL in the Right top search named Symbol Lookup). When PLDT Stocks were first issued it was at Php 5.00 only but as of last Friday the Market value is at Php 2, 445.00. Now do you see what I mean.

Book Value: It is the current value of a stock as per company's books.

Ok let me put it this way, it is the net worth of the company per stock. Well what's the use of this value anyways you may ask. As I have discussed in my previous post it is important to note what a company's net worth is. Net worth implies that the company is either a company in good financial position or not. A negative net worth is called a deficit and when we say deficit it means the business owes more than owns more. The likelihood of that company going bankrupt is high thus one has to be on the look out. It also helps investors to determine if such stock is undervalued as compared to its current market price. For example stock of Company X has a market value of Php 25.00 but its book value is at Php 45.00. What does this mean? It simply means that the market sees a different value for the company and it is a indication for an investor to further analyze why such is happening given the strong standing of the stock.

Market Value: price as determined dynamically by buyers and sellers in an open market.

Simply said it is how anyone will buy the stock based on their perceived value of the stock. Let me give you an example. Back in my province some businessmen goes around the neighborhood and check the mango trees in our backyard. If they see that it has a lot of buds they predict that this tree will bear many mangoes in the near future and will ask the owner if they can "pakyaw" (not Manny Pacquiao) our tree. Price negotiations will run and soon an agreed price will be settled. The basis of such price is the current price of mango any sane person would ask or buy such product. Nobody will buy a mango for Php 20,000.00 per kilo but rather it would be in a range of Php 40-120 per kilo range depending on the demand and supply level. 

Market price is the price at which stocks are bought and sold. In the case of the Market price indicated in the PSE it is the last traded price which is called closing price. This is important because as I said it will be the basis of any sane investor. In the stock market, brokers will have their bid and ask values. As the course of trading happens this value changes depending who is willing to sell or buy at a certain price.

Understanding Net Worth

I know you don’t want too technical terms but I guess in order to excel in investing one has to familiarize oneself to the terms use in business. A good way to start as everyone says is to instead of reading the entertainment section of the daily newspaper go first to the business section. There you will find business lingo that probably you have never heard in your whole lifetime. Don’t be ashamed to ask somebody if you don’t know what it means, don’t be ashamed to increase your financial I.Q.

With that let’s focus on Net Worth.

Dictionary.com defines it as:

“The amount by which a company or individual's assets exceeds their liabilities. “

In accounting it is explain by re-arranging the Balance Sheet equation:

Capital (Net Worth) = Asset – Liability

Where: Asset = things you or your business own

Liability = things you or your business owe to someone else

With this Net Worth simply means your actual value. This is important because as one compares a company to another one has to look where the company stands. A company which has a positive net worth simply means it is well funded thus it is able to fund its current operation without fear of default in paying suppliers (too technical right?)

A negative net worth commonly known as deficit on the other hand means that a company is out of enough assets to settle its obligations. There is a fear that operations may stop and creditors may run after the company’s asset to satisfy obligations. It also means that the company is more of type which is owned by its creditors rather than its owners.

Looking back at my past post about how much is money one has one must think of it as your net worth. I am currently reading “The Millionaire Next Door” which was a survey made into book by Thomas Stanley & William Danko. It is a survey to find out what are the common factors among America’s millionaires. One topic was about one’s net worth.

The expected net worth formula from “The Millionaire Next Door” is like this:

Age X Gross Annual Income

10

I myself was shock when I computed my expected net worth. My computations resulted to about $ 85,000.00 based on my salary and age but to date I only have twenty something thousand in my name yikes. You might ask me why age becomes a factor in this equation. Age is an important factor because as time passes one should have accumulated that amount of money if you have a fixed amount of income like your salary. It means not only saving money but also earning from that savings. As Bob Proctor said “Money is not meant to be hoarded, it should be circulated.” If you put your money in your bamboo alcansya (Pinoy style piggybank) that amount you expect to have when that piggybank is full is the amount you have dropped in it. Probably it is wise to save but there is also a wiser way to make use of that money. If you are familiar with the parable of the talents you will know why keeping money is wrong.

Likewise you must differentiate spending from circulating money; there’s a thousand kilometer difference between this two. When you spend you let go of the money. When you circulate it means it comes back to you with additional money. Grow money; that what it means to circulate money. Putting it in a bank for 2-3% interest is not that bad, if you have a business plan that you think you can manage well probably putting your money there will be better. Investing on the other hand is for the long term thus it is important for you to know your net worth.

By knowing your net worth you will be able to decide how much do you really have and how much of that you can freely put in a long term investment. If you have time and if you wanna know your expected net worth try the equation above, it will make you think where have you spend all that money that you have earn from your job these past years.

Understanding Net Worth

I know you don’t want too technical terms but I guess in order to excel in investing one has to familiarize oneself to the terms use in business. A good way to start as everyone says is to instead of reading the entertainment section of the daily newspaper go first to the business section. There you will find business lingo that probably you have never heard in your whole lifetime. Don’t be ashamed to ask somebody if you don’t know what it means, don’t be ashamed to increase your financial I.Q.

With that let’s focus on Net Worth.

Dictionary.com defines it as:

“The amount by which a company or individual's assets exceeds their liabilities. “

In accounting it is explain by re-arranging the Balance Sheet equation:

Capital (Net Worth) = Asset – Liability

Where: Asset = things you or your business own

Liability = things you or your business owe to someone else

With this Net Worth simply means your actual value. This is important because as one compares a company to another one has to look where the company stands. A company which has a positive net worth simply means it is well funded thus it is able to fund its current operation without fear of default in paying suppliers (too technical right?)

A negative net worth commonly known as deficit on the other hand means that a company is out of enough assets to settle its obligations. There is a fear that operations may stop and creditors may run after the company’s asset to satisfy obligations. It also means that the company is more of type which is owned by its creditors rather than its owners.

Looking back at my past post about how much is money one has one must think of it as your net worth. I am currently reading “The Millionaire Next Door” which was a survey made into book by Thomas Stanley & William Danko. It is a survey to find out what are the common factors among America’s millionaires. One topic was about one’s net worth.

The expected net worth formula from “The Millionaire Next Door” is like this:

Age X Gross Annual Income

10

I myself was shock when I computed my expected net worth. My computations resulted to about $ 85,000.00 based on my salary and age but to date I only have twenty something thousand in my name yikes. You might ask me why age becomes a factor in this equation. Age is an important factor because as time passes one should have accumulated that amount of money if you have a fixed amount of income like your salary. It means not only saving money but also earning from that savings. As Bob Proctor said “Money is not meant to be hoarded, it should be circulated.” If you put your money in your bamboo alcansya (Pinoy style piggybank) that amount you expect to have when that piggybank is full is the amount you have dropped in it. Probably it is wise to save but there is also a wiser way to make use of that money. If you are familiar with the parable of the talents you will know why keeping money is wrong.

Likewise you must differentiate spending from circulating money; there’s a thousand kilometer difference between this two. When you spend you let go of the money. When you circulate it means it comes back to you with additional money. Grow money; that what it means to circulate money. Putting it in a bank for 2-3% interest is not that bad, if you have a business plan that you think you can manage well probably putting your money there will be better. Investing on the other hand is for the long term thus it is important for you to know your net worth.

By knowing your net worth you will be able to decide how much do you really have and how much of that you can freely put in a long term investment. If you have time and if you wanna know your expected net worth try the equation above, it will make you think where have you spend all that money that you have earn from your job these past years.

Understanding Net Worth

I know you don’t want too technical terms but I guess in order to excel in investing one has to familiarize oneself to the terms use in business. A good way to start as everyone says is to instead of reading the entertainment section of the daily newspaper go first to the business section. There you will find business lingo that probably you have never heard in your whole lifetime. Don’t be ashamed to ask somebody if you don’t know what it means, don’t be ashamed to increase your financial I.Q.

With that let’s focus on Net Worth.

Dictionary.com defines it as:

“The amount by which a company or individual's assets exceeds their liabilities. “

In accounting it is explain by re-arranging the Balance Sheet equation:

Capital (Net Worth) = Asset – Liability

Where: Asset = things you or your business own

Liability = things you or your business owe to someone else

With this Net Worth simply means your actual value. This is important because as one compares a company to another one has to look where the company stands. A company which has a positive net worth simply means it is well funded thus it is able to fund its current operation without fear of default in paying suppliers (too technical right?)

A negative net worth commonly known as deficit on the other hand means that a company is out of enough assets to settle its obligations. There is a fear that operations may stop and creditors may run after the company’s asset to satisfy obligations. It also means that the company is more of type which is owned by its creditors rather than its owners.

Looking back at my past post about how much is money one has one must think of it as your net worth. I am currently reading “The Millionaire Next Door” which was a survey made into book by Thomas Stanley & William Danko. It is a survey to find out what are the common factors among America’s millionaires. One topic was about one’s net worth.

The expected net worth formula from “The Millionaire Next Door” is like this:

Age X Gross Annual Income

10

I myself was shock when I computed my expected net worth. My computations resulted to about $ 85,000.00 based on my salary and age but to date I only have twenty something thousand in my name yikes. You might ask me why age becomes a factor in this equation. Age is an important factor because as time passes one should have accumulated that amount of money if you have a fixed amount of income like your salary. It means not only saving money but also earning from that savings. As Bob Proctor said “Money is not meant to be hoarded, it should be circulated.” If you put your money in your bamboo alcansya (Pinoy style piggybank) that amount you expect to have when that piggybank is full is the amount you have dropped in it. Probably it is wise to save but there is also a wiser way to make use of that money. If you are familiar with the parable of the talents you will know why keeping money is wrong.

Likewise you must differentiate spending from circulating money; there’s a thousand kilometer difference between this two. When you spend you let go of the money. When you circulate it means it comes back to you with additional money. Grow money; that what it means to circulate money. Putting it in a bank for 2-3% interest is not that bad, if you have a business plan that you think you can manage well probably putting your money there will be better. Investing on the other hand is for the long term thus it is important for you to know your net worth.

By knowing your net worth you will be able to decide how much do you really have and how much of that you can freely put in a long term investment. If you have time and if you wanna know your expected net worth try the equation above, it will make you think where have you spend all that money that you have earn from your job these past years.

What are you: Trader, Investor, or Both?

That is the question that differentiates one from the other.

A lot of us, including me before, have this problem in regards to the stock market. We are afraid of the stock market because we see all the risk in it. As they say one can be rich in the blink of an eye at the same time one can be poor in the blink of an eye. Well that could happen if you don't know what you are dealing with.

Many people joined the stock market bandwagon thinking of quick rich fix. In reality it takes time to get rich in the stock market. I heard an interview of the CEO of one of the stockbroker company in the Philippines and he noted that 80% of all the people who joined the stock market lost their money. The thing is many people jump into buying shares of a company because they heard from their neighbor, friend, or overheard from someone in the SM food court that this so and so stock's trend is upward and if they buy today they will earn a lot.

One has to categorize either you are an investor, trader or both.

Investors are for the long term. Buying stocks to be held for a long term means one is interested in the performance of such company. You become part owner of that company and because of such you are entitled to the profits of such company. Companies share earnings to their owners by paying out dividends. It is a fix amount of money per share given as a result of the company’s good performance. An investor looks into the company’s profitability in the next 5 - 10 years. Great companies that have withstood the test of times and have a proven track record of good performance are good to start with.

Traders on the other hand are risk takers. These are the people who speculate on the stock market's day to day demand-supply cycle. Very few people have truly mastered this technique. These are what we call the professional in the field of stock trading. One thing that these people must have is information. Having the right information can give one an edge on the stock trading game. They study the trend of the stock market. They study the MACD, Stochastic, and the various charts. They must also be up-to-date about the general local and global economy because these are one of the factors that affect the market's demand and supply. Also, like the investor, they must have a good picture of the company’s financial picture thus they have to learn the various financial ratios that I learned back in my college years like P/E ratio, Dividend Yield ratio, etc. It is rewarding if you got the right timing thus one must be fully knowledgeable about these things.

Or are you both? One of the great lessons we learned with this financial downturn is not to put your eggs in one basket. You are missing the chances of earning big if one places his money everything in investment for long term and on the other hand putting them all for risk taking that might make you ending up broke. That is why the term diversification was there. It simple means as we have said "not putting your eggs in one basket."

In my other post I have mentioned that one must determined first how much one can invest. A good advice is to invest only your extra money. After segregating for your daily expenses, payments for bills, emergency money, and savings for something you want to buy then whatever is left that is the amount that you can truly invest. And besides from investing in the stock market one can also invest for cash flow or in other terms business (this one needs another post). By diversification we also mean putting your money in different vehicles. If you put your money in stock, bonds, and EFT you are still putting it in one basket that is in the stock market. Putting it in savings account, UITF, and time deposit is also putting in one basket and that is banks. Diversification means placing it in unrelated vehicles.

With all these thoughts and ideas I believe you will ask me why then you tell me to invest when it is risky and it is hard to understand? Well most people's error is that they wanted a quick rich scheme and that they think investing is such a tasky thing. But I guess in order to get what one wants one must work hard for it. It has been old saying easy money, easily goes away because we never value it due to the fact that we never work hard for it. It is only when we worked hard for it that we value it and we get wiser in making it grow more. And as we learn more about it we tend to appreciate it and in the end benefit from it by having the life that we have always been dreaming of.

What are you: Trader, Investor, or Both?

That is the question that differentiates one from the other.

A lot of us, including me before, have this problem in regards to the stock market. We are afraid of the stock market because we see all the risk in it. As they say one can be rich in the blink of an eye at the same time one can be poor in the blink of an eye. Well that could happen if you don't know what you are dealing with.

Many people joined the stock market bandwagon thinking of quick rich fix. In reality it takes time to get rich in the stock market. I heard an interview of the CEO of one of the stockbroker company in the Philippines and he noted that 80% of all the people who joined the stock market lost their money. The thing is many people jump into buying shares of a company because they heard from their neighbor, friend, or overheard from someone in the SM food court that this so and so stock's trend is upward and if they buy today they will earn a lot.

One has to categorize either you are an investor, trader or both.

Investors are for the long term. Buying stocks to be held for a long term means one is interested in the performance of such company. You become part owner of that company and because of such you are entitled to the profits of such company. Companies share earnings to their owners by paying out dividends. It is a fix amount of money per share given as a result of the company’s good performance. An investor looks into the company’s profitability in the next 5 - 10 years. Great companies that have withstood the test of times and have a proven track record of good performance are good to start with.

Traders on the other hand are risk takers. These are the people who speculate on the stock market's day to day demand-supply cycle. Very few people have truly mastered this technique. These are what we call the professional in the field of stock trading. One thing that these people must have is information. Having the right information can give one an edge on the stock trading game. They study the trend of the stock market. They study the MACD, Stochastic, and the various charts. They must also be up-to-date about the general local and global economy because these are one of the factors that affect the market's demand and supply. Also, like the investor, they must have a good picture of the company’s financial picture thus they have to learn the various financial ratios that I learned back in my college years like P/E ratio, Dividend Yield ratio, etc. It is rewarding if you got the right timing thus one must be fully knowledgeable about these things.

Or are you both? One of the great lessons we learned with this financial downturn is not to put your eggs in one basket. You are missing the chances of earning big if one places his money everything in investment for long term and on the other hand putting them all for risk taking that might make you ending up broke. That is why the term diversification was there. It simple means as we have said "not putting your eggs in one basket."

In my other post I have mentioned that one must determined first how much one can invest. A good advice is to invest only your extra money. After segregating for your daily expenses, payments for bills, emergency money, and savings for something you want to buy then whatever is left that is the amount that you can truly invest. And besides from investing in the stock market one can also invest for cash flow or in other terms business (this one needs another post). By diversification we also mean putting your money in different vehicles. If you put your money in stock, bonds, and EFT you are still putting it in one basket that is in the stock market. Putting it in savings account, UITF, and time deposit is also putting in one basket and that is banks. Diversification means placing it in unrelated vehicles.

With all these thoughts and ideas I believe you will ask me why then you tell me to invest when it is risky and it is hard to understand? Well most people's error is that they wanted a quick rich scheme and that they think investing is such a tasky thing. But I guess in order to get what one wants one must work hard for it. It has been old saying easy money, easily goes away because we never value it due to the fact that we never work hard for it. It is only when we worked hard for it that we value it and we get wiser in making it grow more. And as we learn more about it we tend to appreciate it and in the end benefit from it by having the life that we have always been dreaming of.

What are you: Trader, Investor, or Both?

That is the question that differentiates one from the other.

A lot of us, including me before, have this problem in regards to the stock market. We are afraid of the stock market because we see all the risk in it. As they say one can be rich in the blink of an eye at the same time one can be poor in the blink of an eye. Well that could happen if you don't know what you are dealing with.

Many people joined the stock market bandwagon thinking of quick rich fix. In reality it takes time to get rich in the stock market. I heard an interview of the CEO of one of the stockbroker company in the Philippines and he noted that 80% of all the people who joined the stock market lost their money. The thing is many people jump into buying shares of a company because they heard from their neighbor, friend, or overheard from someone in the SM food court that this so and so stock's trend is upward and if they buy today they will earn a lot.

One has to categorize either you are an investor, trader or both.

Investors are for the long term. Buying stocks to be held for a long term means one is interested in the performance of such company. You become part owner of that company and because of such you are entitled to the profits of such company. Companies share earnings to their owners by paying out dividends. It is a fix amount of money per share given as a result of the company’s good performance. An investor looks into the company’s profitability in the next 5 - 10 years. Great companies that have withstood the test of times and have a proven track record of good performance are good to start with.

Traders on the other hand are risk takers. These are the people who speculate on the stock market's day to day demand-supply cycle. Very few people have truly mastered this technique. These are what we call the professional in the field of stock trading. One thing that these people must have is information. Having the right information can give one an edge on the stock trading game. They study the trend of the stock market. They study the MACD, Stochastic, and the various charts. They must also be up-to-date about the general local and global economy because these are one of the factors that affect the market's demand and supply. Also, like the investor, they must have a good picture of the company’s financial picture thus they have to learn the various financial ratios that I learned back in my college years like P/E ratio, Dividend Yield ratio, etc. It is rewarding if you got the right timing thus one must be fully knowledgeable about these things.

Or are you both? One of the great lessons we learned with this financial downturn is not to put your eggs in one basket. You are missing the chances of earning big if one places his money everything in investment for long term and on the other hand putting them all for risk taking that might make you ending up broke. That is why the term diversification was there. It simple means as we have said "not putting your eggs in one basket."

In my other post I have mentioned that one must determined first how much one can invest. A good advice is to invest only your extra money. After segregating for your daily expenses, payments for bills, emergency money, and savings for something you want to buy then whatever is left that is the amount that you can truly invest. And besides from investing in the stock market one can also invest for cash flow or in other terms business (this one needs another post). By diversification we also mean putting your money in different vehicles. If you put your money in stock, bonds, and EFT you are still putting it in one basket that is in the stock market. Putting it in savings account, UITF, and time deposit is also putting in one basket and that is banks. Diversification means placing it in unrelated vehicles.

With all these thoughts and ideas I believe you will ask me why then you tell me to invest when it is risky and it is hard to understand? Well most people's error is that they wanted a quick rich scheme and that they think investing is such a tasky thing. But I guess in order to get what one wants one must work hard for it. It has been old saying easy money, easily goes away because we never value it due to the fact that we never work hard for it. It is only when we worked hard for it that we value it and we get wiser in making it grow more. And as we learn more about it we tend to appreciate it and in the end benefit from it by having the life that we have always been dreaming of.

Who are Stockbrokers?

First things first. One cannot directly invest in the stock market. One has to have a stockbroker accredited by SEC and PSE. The stockbroker's role is more like a middle man between the seller and buyer of a stock or other debt or equity investment. These persons or corporations need to be accredited by regulatory bodies like SEC and PSE to ensure that the trading of stocks are not fraudulent and in accordance to the rules set by laws.

Stock broking is a matter of trust and financial responsibility. The qualities and credentials of the broker needs to be investigated properly due to the fact that you, the investor, would be handing over hard earned money at the hands of the stockbroker. An ideal stockbroker should provide a clear schedule of investment and the know-how to the investor to build an investment portfolio gradually.

A good stockbroker has a definite plan and does research carefully. To take appropriate decisions about stock market investing is not for the chicken- hearted.(odd phrase) An ideal trader does not feel nervous about the losses. He is the master in money-management techniques. As they say you can be a millionaire in a second and a poor man as well. A good stockbroker do two analysis of stocks, Fundamental and Technical Analysis. The first is an analysis of the company's financial standing and performance based on financial statements and reports. This includes various ratio analysis and turnover analysis that measures the company's stability and profitability in the long run.

Technical analysis on the other hand deals more on the trend analysis of the stock. The market changes due to changing forces and also based on demand and supply. A company might have a good financial standing but the buying market has different feel about it thus the trend on this particular company's stock might be on the upside or the downside. Stock values changes rapidly depending on how many are interested to buy or how many are selling. Knowing the trend gives a stockbroker knowledge when to buy and when to sell stocks to get the best out of it.

The advent of technology has made investing simple. Online stockbrokers who are accredited by the PSE can execute one's order upon keying it online. Security wise these online brokers wont be granted license without showing their ability to secure the investors information. Click here to know some of PSE's online stock brokers.

Who are Stockbrokers?

First things first. One cannot directly invest in the stock market. One has to have a stockbroker accredited by SEC and PSE. The stockbroker's role is more like a middle man between the seller and buyer of a stock or other debt or equity investment. These persons or corporations need to be accredited by regulatory bodies like SEC and PSE to ensure that the trading of stocks are not fraudulent and in accordance to the rules set by laws.

Stock broking is a matter of trust and financial responsibility. The qualities and credentials of the broker needs to be investigated properly due to the fact that you, the investor, would be handing over hard earned money at the hands of the stockbroker. An ideal stockbroker should provide a clear schedule of investment and the know-how to the investor to build an investment portfolio gradually.

A good stockbroker has a definite plan and does research carefully. To take appropriate decisions about stock market investing is not for the chicken- hearted.(odd phrase) An ideal trader does not feel nervous about the losses. He is the master in money-management techniques. As they say you can be a millionaire in a second and a poor man as well. A good stockbroker do two analysis of stocks, Fundamental and Technical Analysis. The first is an analysis of the company's financial standing and performance based on financial statements and reports. This includes various ratio analysis and turnover analysis that measures the company's stability and profitability in the long run.

Technical analysis on the other hand deals more on the trend analysis of the stock. The market changes due to changing forces and also based on demand and supply. A company might have a good financial standing but the buying market has different feel about it thus the trend on this particular company's stock might be on the upside or the downside. Stock values changes rapidly depending on how many are interested to buy or how many are selling. Knowing the trend gives a stockbroker knowledge when to buy and when to sell stocks to get the best out of it.

The advent of technology has made investing simple. Online stockbrokers who are accredited by the PSE can execute one's order upon keying it online. Security wise these online brokers wont be granted license without showing their ability to secure the investors information. Click here to know some of PSE's online stock brokers.

Who are Stockbrokers?

First things first. One cannot directly invest in the stock market. One has to have a stockbroker accredited by SEC and PSE. The stockbroker's role is more like a middle man between the seller and buyer of a stock or other debt or equity investment. These persons or corporations need to be accredited by regulatory bodies like SEC and PSE to ensure that the trading of stocks are not fraudulent and in accordance to the rules set by laws.

Stock broking is a matter of trust and financial responsibility. The qualities and credentials of the broker needs to be investigated properly due to the fact that you, the investor, would be handing over hard earned money at the hands of the stockbroker. An ideal stockbroker should provide a clear schedule of investment and the know-how to the investor to build an investment portfolio gradually.

A good stockbroker has a definite plan and does research carefully. To take appropriate decisions about stock market investing is not for the chicken- hearted.(odd phrase) An ideal trader does not feel nervous about the losses. He is the master in money-management techniques. As they say you can be a millionaire in a second and a poor man as well. A good stockbroker do two analysis of stocks, Fundamental and Technical Analysis. The first is an analysis of the company's financial standing and performance based on financial statements and reports. This includes various ratio analysis and turnover analysis that measures the company's stability and profitability in the long run.

Technical analysis on the other hand deals more on the trend analysis of the stock. The market changes due to changing forces and also based on demand and supply. A company might have a good financial standing but the buying market has different feel about it thus the trend on this particular company's stock might be on the upside or the downside. Stock values changes rapidly depending on how many are interested to buy or how many are selling. Knowing the trend gives a stockbroker knowledge when to buy and when to sell stocks to get the best out of it.

The advent of technology has made investing simple. Online stockbrokers who are accredited by the PSE can execute one's order upon keying it online. Security wise these online brokers wont be granted license without showing their ability to secure the investors information. Click here to know some of PSE's online stock brokers.