A lot of people have asked me on whether they should invest in the Philippine stock market. Most of those who asked also wanted to know how to start doing it. I do not know if they are really serious about investing or if they are merely curious about it since it has been given emphasis lately considering its very positive performance.

Investing in the Philippine stock market is not for the faint hearted. As an investor you must have expectations as to how much you are going to earn for a certain vehicle of investment. Such is expectation is measured in terms of how much your money will grow at a certain period of time. (Most usually this is measured in interest per annum) Because the Philippine Stock market is in its all time high for several months now, people think that they should join the band wagon. They do not even understand the basic principles involved nor do they understand how the stock market works. I am not saying that you should be an economist before you should invest in the stock market.

What I am saying is that you should understand the basic principles involved first before you could succeed in the stock market. While it is true that fortunes are made on the Stock market, loss of wealth has also been experienced by some. Some who just barge into the stock market without understanding the basic principles of investment end up leaving the stock market convinced that the stock market is no good at all as an alternative vehicle of investment.

Before discussing the details on how to invest in the Philippine stock market we must first have a good grasp on the basic principles of investment in order that we might possibly succeed and enjoy trading. There will be ten principles that will discussed. The first one will be discussed here. Other points will be discussed in the articles to come. Please visit my blog if you wish to see the article in its entirety.

1.) Its just another vehicle of investment – The stock market is just another vehicle of investment. There are other investment vehicles where you could invest your money. They have their advantages and disadvantages. One vehicle of investment is not more superior than the other. However this will not be discussed in detail here.

In economic parlance, the stock market is categorized as belonging to the “Capital Markets.” Even in the Capital market category there are different types of investment vehicles. You have several alternatives here. Aside from the stock market, you could place your investment in pension funds, bonds, insurance, real estate, time deposit accounts different types of savings. It is important to know this because it will help you determine whether or not you should invest in the Stock Market considering that there are other alternative vehicles of investment in the Capital markets.

I reiterate that each vehicle of investment has its own advantages and disadvantages. I did not to place all of my eggs in one basket. Most of my investments are in the Capital Markets though. This includes bonds through mutual funds, the stock market, insurance, pension and deposits.

There’s no denying that we all want to be wealthy. For many of us this may seem like nothing more than a pipe dream, and realistically we can’t all be as wealthy as the next person, but we can improve our wealth at the very least, to the point where we no longer stress over money and can lead fairly comfortable lives.

Building wealth over the long-term boils down to three simple, yet not so easy to execute steps. Making money, saving or not overspending that money, and finally, investing a good portion of it away for the future.

Step #1 – Making Money

This is the most vital part of the equation, and also the one that is most effected by outside forces and even a little luck, whereas steps 2 and 3 are primarily up to you. You can be the smartest investor and the wisest money saver in the world, but it simply won?t do you any good if you’re not making enough money.

The most important aspect of determining your income potential is the field you’re in, and you may need to ask yourself some questions regarding it. How well are you being paid now, and what potential income will you be earning in 5 or 10 years? If you?re doing something you love but it doesn’t pay well, are you willing to work a job you may not like as much to make extra money? You can be the best in the world at what it is you do, but if you?re stuck in a low paying field, your options are limited.

Saving Money

Maybe you’re already in a nice position income wise, yet you still can’t seem to get ahead. In this case you’re simply not doing a good enough job of saving your money. You can make $100,000, but if you’re spending $110,000, you’re getting nowhere fast.

The good news is that the potential to save is there. Like we said above, making money is the hardest part, so if you’ve got that down pat, you can be saving nice chunks of money away in no time with just a little effort.

To get started you should track your spending for a whole month. You need to see where all the expenses are coming from, and you may be surprised at how easily you fritter money away and possible damaged your credit rating. Once that?s done you can begin to cut some of the extra fat, those expensive little conveniences that won?t affect your way of life when gone. This boils down to figuring out what you need and you merely want. If you have a sizable income and aren’t saving any money, there is definitely a lot of wants – in your spending, and that’s fine. You won’t need to cut them all out, even just a few could save you a good deal of money each month.

Step 3: Investing Money

Once you have enough money saved away you can begin to invest it. Depending on your age, you may need to take on greater risk in your investing than if you were younger. No matter your age you should avoid being too conservative. Your portfolio will need at least some equity exposure to guard against inflation, which is often not considered by new investors.

Summary

Building wealth is not rocket science, it just takes some the execution of three fairly simple steps. If you’re making the money, there?s no reason for you not to be saving and investing it, unless of course you plan to work all your life. No? I didn’t think so. It’s time to get going in that case, you have nothing to lose and your retirement to gain.

Many people think real estate investing isn’t easy.

Buying a property and hoping to re-sell it quickly at a gain isn’t a workable scenario in the current business climate.

If you’re looking for long-term appreciation, you can buy a property. You need to purchase it at a reasonable price to allow room to pay for management fees. Or you can manage it yourself. The tenants are the wild card, aren’t they?

In commercial real estate, you run the risk of not having any tenants, if the local market is glutted. And that is the case in many local markets. In residential real estate, you may find yourself doing a fair amount of maintenance. You may worry about finding the right tenant. How do you create a lease? How do you screen tenants so as to find the ones who will stay a long time and keep up your property for you?

You may want to consider a real-estate investment trust (REIT), if you want an investment that is low-maintenance. You buy shares in a REIT fund, which is publicly traded. The fund typically holds commercial property and/or mortgages. The value of these funds may go up when the stock market goes down, allowing you to hedge your bets.

Like mutual funds, REIT funds must levy fees. The fees may cut into your profits, as owner. Instead, perhaps you would like to own a property outright.

What do you think of the idea of investing your money in a single-family house, to be rented out? You can choose the house from a variety of local sunbelt markets, and you can take advantage of negotiated relationships with property managers, insurers, and mortgage originators. All this at just five to 10 percent down on each house.

Using such a system, You can set up an investment with known costs, and then let the tenants pay off the mortgage for you. It’s a great way to start a college fund for your young child. All you will have to do is sell the house in 15 years and extract the equity.

Out of everything that is decorated with gold, the gold coin remains to be a very wise investment option. US gold coin auctions and online resources that cater to gold coin collectors are excellent sources of finding such coins- and investors can attest to their strength in the current economic market.

The thing that makes gold such a time tested investment is the fact that it can withstand the forces of man and nature in many ways. A paper note can easily burn or tear, whereas a golden coin will be much harder to destroy. In comparison, gold coins are much better as they have a longer lasting lifetime, not to mention they do not shift in value as quickly as currency notes do on average.

Gold coins are great because they actually represent an actual value- unlike some currencies that represent gold that the government has kept in safe storage. Gold coins, thus, are immune to any market crash that could make other types of currencies unstable and fail. This has made the gold coin a much sought after investment among collectors and investors alike.

Another interesting point on gold coins is the fact that they can become more valuable as time wears on. Having a gold coin in mint condition from a hundred years ago, for instance, would only compound its value exponentially. This shows that time can do amazing things for one’s investment, which is something that the common currency note can’t compare to.

Consumer should be warned, however, that not all gold coins are going to be profitable. Gold coins that are commonly sold from TV commercials are an example of some coins that might not be the best short-term return on investments. Such commercials are commonly put out by businesses who are looking to get consumers to commit to buying gold when market conditions are not ideal- meaning they themselves make a quicker profit than the consumer.

Consumers who want more options in obtaining gold coins from a reliable source should check into the Internet or US gold coin auctions. Both sources are ran and visited by gold coin investors and collectors. In this case, investors and collectors will have a better chance of obtaining gold coins at a better rate than what a TV commercial would ever hope to give.

Final Thoughts

Investing can be a very dangerous game. But for gold coin collectors and investors, it is just another way to increase their financial success through good decisions and patience. Only through patience and excellent buys can gold coin investors and collectors make such high profits off of gold coins- two virtues that make the successful entrepreneur different from the average consumer.

It can be very confusing when you first start trading in the Forex market. To help keep the trading from being too overwhelming, there are some basics that everyone needs to know. Before you start trading, make sure you get the most out of your investments by doing your homework. A vital component to trading success, Research is the best way to avoid common pitfalls. It is a known fact that 95% of all traders are unsuccessful when they enter the Forex market because they do not properly research all avenues of their investment before diving in.

First, get a good training program and practice. There are a number of demos or games out there that teach the basics of Forex trading.

Second, get a good forex trading software application to assist you in trading by providing you with a variety of different tools. Two types of software applications are available to Forex traders, the first type and most common of software is web based. This can be offered through a private company or offered through a brokerage firm.

The web based software applications usually have the most benefit to traders. The second type of software application is desktop or freestanding base. This software application has the primary advantage of being able to be used with a dial up connection.

Third, use a web based software company or brokerage company that offers tutorials and training programs. This will help to show you the various ways to successfully trade on the market as well as provide references for after you get started.

When learning the basics of Forex keep in mind that there are some things you should look out for or consider putting in place. The first is a stop. A stop is something that tells the software program you are using to trade with or the broker you are using that there is a limit to the trade. In other words, you want to stop trading at a certain point. This is to help prevent a total loss of investment.

To truely be successful in trading, you need a trading partner that works while you are sleeping. A forex trading software program will do just that and more. It will watch your back, and help you avoid heavy losses as well as increasing gain’s. This type of software will work 24 hours a day even when you cannot. Now that has some very serious advantages!

The use of software is one way that both novice and advanced Forex traders can complete transactions with accuracy and security as well as keep up with the market. Software enables the automation of many functions based on the system that the trader desires to work under. The use of demo and trading games can provide the necessary practice and experience prior to jumping into the market directly. In fact, it is highly recommended by both professional brokers and successful Forex traders and finally research is one of the vital components to being successful in the Forex market.

One of the best things about Forex trading is that it is a 24 hour market. Here you can trade anytime and anywhere you are. If you think that the Forex market conditions are good at a specific time, then without hesitation or delay you can just trade at that specific time.

Also, the Forex market is the most liquid market in the world. Which means you can enter or exit the market at anytime you wish. This will minimize the risk and the fact that there is also no daily trading limit is another bonus.

Here are few more tips that you would find useful to earn money in the Forex market and be good in doing so:

Remember that the first and the last tactics are generally the most expensive. As a rule of thumb you must always look for getting in late and get out early. One tip is that don’t add money when you are losing. Because when you are losing, at least you need to minimize the risk of losing more money. Always make it a point to select trades that move along with the trend. This can minimize the risk of losing money and maximize your increase your chances of gaining profits.

There are many a tools you can use when trading in the Forex market. One is the Forex charts. As a speculator, the chart can be the most important tool that you can use to find the market trends and accurately predict the future value of the currency. Though it isn’t actually 100% accurate, you can still use the Forex charts as a guide to let you know what’s happening around in the market.

You need to know how to read the different charts involved in the Forex market. There are daily charts, hourly charts, 15 minute charts and even 5 minute charts to give you clear picture. You might find it useful to compare each of the data in the chart to spot market trends, also at the same time, spot potential money making trends as well.

This can always help you minimize the risk while trading in Forex. Learning to read the charts effectively can put you on great advantage. It will certainly help you in achieving substantial progress in the world of Forex market.

These are some of the strategies and tips that you should keep in mind so that you can minimize the risks in Forex trading and maximize your earning potential. Based on your skill set and how you apply your strategies, you can really earn a great deal of money in the Forex market. But then, to be a truly successful Forex trader, you need to accept the fact that you might sometimes end up losing money. Never get discouraged when you lose. Find out where exactly you made the mistake come up with a solution to get back what you lost and continue trading.

Each individual has a risk tolerance that should not be ignored. Any good stock broker or financial planner knows this, and they should make the effort to help you determine what your risk tolerance is. Then, they should work with you to find investments that do not exceed your risk tolerance.

Determining one’s risk tolerance involves several different things. First, you need to know how much money you have to invest, and what your investment and financial goals are.

For instance, if you plan to retire in ten years, and you’ve not saved a single penny towards that end, you need to have a high risk tolerance – because you will need to do some aggressive – risky – investing in order to reach your financial goal.

On the other side of the coin, if you are in your early twenties and you want to start investing for your retirement, your risk tolerance will be low. You can afford to watch your money grow slowly over time.

Realize of course, that your need for a high risk tolerance or your need for a low risk tolerance really has no bearing on how you feel about risk. Again, there is a lot in determining your tolerance.

For instance, if you invested in the stock market and you watched the movement of that stock daily and saw that it was dropping slightly, what would you do?

Would you sell out or would you let your money ride? If you have a low tolerance for risk, you would want to sell out if you have a high tolerance, you would let your money ride and see what happens. This is not based on what your financial goals are. This tolerance is based on how you feel about your money!

Again, a good financial planner or stock broker should help you determine the level of risk that you are comfortable with, and help you choose your investments accordingly.

Your risk tolerance should be based on what your financial goals are and how you feel about the possibility of losing your money. It’s all tied in together.

“Don’t put all of your eggs in one basket!” You’ve probably heard that over and over again throughout your lifeand when it comes to investing, it is very true. Diversification is the key to successful investing. All successful investors build portfolios that are widely diversified, and you should too!

Diversifying your investments might include purchasing various stocks in many different industries. It may include purchasing bonds, investing in money market accounts, or even in some real property. The key is to invest in several different areas – not just one.

Over time, research has shown that investors who have diversified portfolios usually see more consistent and stable returns on their investments than those who just invest in one thing. By investing in several different markets, you will actually be at less risk also.

For instance, if you have invested all of your money in one stock, and that stock takes a significant plunge, you will most likely find that you have lost all of your money. On the other hand, if you have invested in ten different stocks, and nine are doing well while one plunges, you are still in reasonably good shape.

A good diversification will usually include stocks, bonds, real property, and cash. It may take time to diversify your portfolio. Depending on how much you have to initially invest, you may have to start with one type of investment, and invest in other areas as time goes by.

This is okay, but if you can divide your initial investment funds among various types of investments, you will find that you have a lower risk of losing your money, and over time, you will see better returns.

Experts also suggest that you spread your investment money evenly among your investments. In other words, if you start with $100,000 to invest, invest $25,000 in stocks, $25,000 in real property, $25,000 in bonds, and put $25,000 in an interest bearing savings account.

Depending on the type of investing that you plan to do, you may need to hire a broker to handle your investments for you. Brokers work for brokerage houses and have the ability to buy and sell stock on the stock exchange. You may wonder if you really need a broker. The answer is yes. If you intend to buy or sell stocks on the stock exchange, you must have a broker.

Stockbrokers are required to pass two different tests in order to obtain their license. These tests are very difficult, and most brokers have a background in business or finance, with a Bachelors or Masters Degree.

It is very important to understand the difference between a broker and a stock market analyst. An analyst literally analyzes the stock market, and predicts what it will or will not do, or how specific stocks will perform. A stock broker is only there to follow your instructions to either buy or sell stock not to analyze stocks.

Brokers earn their money from commissions on sales in most cases. When you instruct your broker to buy or sell a stock, they earn a set percentage of the transaction. Many brokers charge a flat ‘per transaction’ fee.

There are two types of brokers: Full service brokers and discount brokers. Full service brokers can usually offer more types of investments, may provide you with investment advice, and is usually paid in commissions.

Discount brokers typically do not offer any advice and do no research – they just do as you ask them to do, without all of the bells and whistles.

So, the biggest decision you must make when it come to brokers is whether you want a full service broker or a discount broker.

If you are new to investing, you may need to go with a full service broker to ensure that you are making wise investments. They can offer you the skill that you lack at this point. However, if you are already knowledgeable about the stock market, all you really need is a discount broker to make your trades for you.

Knowing what your risk tolerance and investment style are will help you choose investments more wisely. While there are many different types of investments that one can make, there are really only three specific investment styles – and those three styles tie in with your risk tolerance. The three investment styles are conservative, moderate, and aggressive.

Naturally, if you find that you have a low tolerance for risk, your investment style will most likely be conservative or moderate at best. If you have a high tolerance for risk, you will most likely be a moderate or aggressive investor. At the same time, your financial goals will also determine what style of investing you use.

If you are saving for retirement in your early twenties, you should use a conservative or moderate style of investing – but if you are trying to get together the funds to buy a home in the next year or two, you would want to use an aggressive style.

Conservative investors want to maintain their initial investment. In other words, if they invest $5000 they want to be sure that they will get their initial $5000 back. This type of investor usually invests in common stocks and bonds and short term money market accounts.

An interest earning savings account is very common for conservative investors. A moderate investor usually invests much like a conservative investor, but will use a portion of their investment funds for higher risk investments. Many moderate investors invest 50% of their investment funds in safe or conservative investments, and invest the remainder in riskier investments.

An aggressive investor is willing to take risks that other investors won’t take. They invest higher amounts of money in riskier ventures in the hopes of achieving larger returns – either over time or in a short amount of time. Aggressive investors often have all or most of their investment funds tied up in the stock market.

Again, determining what style of investing you will use will be determined by your financial goals and your risk tolerance. No matter what type of investing you do, however, you should carefully research that investment. Never invest without having all of the facts!