Overseas Filipino Workers (OFWs) have always been reliant on basic saving options while working abroad and rearing their families residing in the Philippines. How about investing in the Philippine stock market?
A stock market is a group of publicly-listed companies to the Philippine Stock Exchange. Some of these companies are SM, BDO, PDLT, GLOBE, BPI, Jollibee, and more. When you buy shares of a company, you become a part-owner of that company.
1. The potential growth of your money in the stock market is higher than your savings account’s.
It is true that investing in the stock market is way better than your present savings account. The truth is, you are gradually losing money by hoarding cash in a savings account. Although savings account appears secured and most convenient of all, it is a stripper of your cash’s value. Obviously, this is due to its increasing fees and interest rates. That’s the effect of the inflation rate.
The return rate on a savings account in the Philippines is 0.25 percent on the average. Moreover, a savings account’s rate of return is influenced by inflation unlike in the stock market. The value of your money in the bourse is safeguarded from price rises.
Do note, however, that this advice stands correct only if your goal in “investing” for the long term. Don’t ditch your savings account immediately. You must have an emergency fund put up in your savings account. An emergency fund is equal to at least 6 months of your monthly expenses. This will keep you afloat whenever an emergency strikes like hospitalization or a loss of a job. Don’t place your emergency fund in investments. Investments fluctuate. If you’re caught in a downtrend market and you need your money, you will be in a worse situation than putting your money in a savings account.
2. You should not miss the power of a compounding interest.
As an OFW investing the stock market, you could possibly generate better returns for your investment. Historically, returns from the stock market are compounding in nature. Compounding means you earn interest on interest. That’s why investments start slow and eventually increases in an exponential manner. Of course, there are risks, and you must consider the risks before actually placing your money on the market.
3. You can invest in the Philippine stock market even if you’re working abroad.
The life of a typical OFW is certainly filled with lack of sleep and tons of workload. Geographical distance is not a problem. You can start investing in the stock market through online stockbrokers that are accredited by the Philippine Stock Exchange. We will conduct webinars on how to open an online stockbroker’s account in the Stock Signals Philippines soon. Click here to find the complete list of webinars.
4. It only costs P5,000.00 to start investing in the Philippine stock market.
Whenever you apply for a savings account, you would likely be required to make a deposit of at least P10,000, particularly on financial firms with a stringent provision. Did you know that you only need P5,000.00 to get started investing in the Philippine stock market?
By investing P5,000.00 every month at an average interest rate of 12 percent, you would have P5.05 million in two decades.
This is equivalent to P10.10 million in two decades if you perk up your investment to P10,000 every month.
Please know that these figures are estimates only. There is no guarantee that you will earn the exact same figures above.
5. It’s worth it to take the risks.
It is true that stock market is a risky place to invest your cash in. Where can you find an investment scheme that has no risk attached to it? High risks come with higher potential returns. Lower risks mean lower possible returns.
You have risked yourself by going abroad, and you may now be reaping your returns through higher wages than if you were just employed in the Philippines. In the stock market, you must have a well-thought of investment plan and a consistent mindset to minimize risks.
One of the ways of minimizing risks in the stock market is to invest small but do it regularly. If you’re relatively new in the stock market, don’t hurry to trade high flyers (penny stocks). Read first. Experience the market first. Get a good feel of it first. You’re setting up yourself for a grand frustration if you’ll jump right away into day-trading without mastering the basics of day-trading. In fact, if you have a full-time job, do not trade. You are here to invests. There is a very thin line between trading and gambling. Make sure you know what you want and how to get there.
For a beginner, invest in companies with good fundamentals. Learn how to read and interpret financial statements first. Not because your Facebook friend posted a 5-digit gain, it doesn’t mean you can do the same by pure luck. We offer webinars on how to read and interpret financial statements for our clients in the Stock Signals Philippines.
6. Investing in stocks is investing in real companies.
If you find it difficult to think of a business to start with when you go back to the Philippines, why not invest in an existing business through the publicly-listed companies in the Philippine Stock Exchange?
In stock market investments, you would be required minimal effort and time to start your business. You simply have to ride on the success of other companies. In fact, you become partners with the business tycoons of the country like the Ayalas, Gokongweis, Lopez’s and the Tans. Why compete against them if you can simply join them?
7. The Philippine Stock Exchange Index (PSEi) has grown by more than 12 percent per year.
Many people claim that the Philippine Stock Exchange (PSE) is a vulnerable place to entrust your money. Then why is it growing? Do you know that since 2006, the index has been growing by 12.7 percent annually? This return is better than what most banks would offer as traditional products, right?
People say that the stock market is a risky place. But ask yourself. If it’s that dangerous, why are the prominent business tycoons present in the market? Most likely, they would not stick in a place where they only lose and earn less. Start assessing your present investment options. It is never late to start in the stock market. You just have to decide for yourself and make your first step.
Are you an OFW? Are you interested to know more about investing in the stock market? Then, subscribe to our Stock Signals Philippines Daily newsletter so we can inform you about the schedule of our webinars for those who are yet to invest in the Philippine stock market. There’s a registration form on the home page, sidebar, and footer of our website.