A lot of interested people keep on asking this—how do you start investing in the stock market? For starters, the easiest way to begin your journey is to look for an online broker that works for you. For instance, you can look at how COL Financial works, you can navigate the website of First Metro Securities, and other brokers like PhilStocks. You won’t run out of online brokers if that’s what you are worried about. After choosing your broker, now’s the time to prepare the money you are going to invest in. The next question follows—how much should you invest?
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One question you should consider when starting to invest in the stock market is the amount you need to get started. Luckily, it is not that hard to find enough cash for your stock investment because you can begin with as low as P500 in the Philippine market and $50 in the U.S market. It is the lowest starting investment you can get. However, there are online brokers who require more than that. What you need to do is to find the broker that can match your starting budget. COL Financial only requires a P1,000 minimum for an investment account while First Metro Sec requires P5,000.
Now, what you need to consider is the amount to buy a single share of stock. How many shares can you buy with P500 if you will start with this amount? You may find plenty of penny stocks but I wouldn’t recommend it because these stocks are riskier than it looks like. Some good companies are worth P200-P500 per share and if you are fine with it, I suggest you increase your starting investment a little higher so you can afford to buy more than 1 share.
How much do you need to diversify your portfolio is likely a question of those who have a slight background in stock investing. Well, if you are going to start with P500 and you want to diversify already, that amount won’t be enough for starters. But if you can only afford to start with small, you can gradually increase your investment until you have enough for diversification. Own between 10-30 positions for better diversification. Start small and with few positions and add more over time. That’s how you can achieve proper diversification in the stock market.
It’s really important to remember that investing so much in the stock market that would pose risk to your financial future is not recommended. Do not invest so much. Start with small amounts and regularly add cash to your investments. Greed will not bring you to places. Always choose to invest gradually so you won’t regret your poor decisions in the future. What makes a good investor is not greed or emotions. It’s proper planning and solid strategies to survive the ups and downs of the market.