Home > Investing Articles > Reasons For Investing In The Stock Market – Part 1

Reasons For Investing In The Stock Market – Part 1

Todays Date: January 18, 2019

In my previous articles, I gave a comprehensive introduction on how to invest in the Philippine stock market, particularly talking about the basic principles that each prospective investors should understand. In this article we are going to discuss the advantages of investing in the stock market.

As I said mentioned previously, the stock market is just another vehicle of investment. You might be wondering what is the reason why you should invest in the stock market? Is there an advantage in investing in the stock market ?

The following reasons could probably answer the above question. Take note, examples given refer to Philippine based companies and currency. If you wish to view the entire article please visit my blog.

1.) The expectation of great returns – In 1997, the price of Globe Telecom Inc. (GLO) stocks was only P152.00 per share. You would only have spent P 1,520.00 to buy the minimum board lot of 10 shares. Now the price of globe has increased ten times more. It is pegged at P 1,620.00+. Meaning, the value of those shares that you bought at 1997 would be P 16,200 right now. This means that on the average you get 30 % return per annum. This is far more advantageous than putting your money in time deposit accounts which only give you less than 4 % per annum. This is just an example of what the financial experts are saying that when the stock market goes up, it really goes up. Returns could reach as high as 200 %+ per annum or even more. This is really expected, especially if you invest long term. It is interesting to know that the Philippine stock market is expected to be in a bull run for the next 2 to 3 years. If there is a time to get involved in the stock market, now would be the best time to do so.

2.)”Ownership” in the companies that you are investing in. – Wouldn’t it be so cool to have your own Jollibee franchise ? However the investment of 20 to 25 million pesos does not make it so cool considering that you also have to put in time and effort to run the store. So instead of owning a Jollibee franchise why not buy Jollibee instead through buying shares of stocks in the corporation ? The minimum board lot of JFC shares (Jollibee Foods Corporations – JFC) cost only P 5,000+. With this investment you indirectly own the more than 1414 stores in the Philippines and 175 in other countries not to mention Red Ribon, Chowking, Deli-France, A popular fastfood chain – Yonghe King in China and popular teahouse chain from Taiwan called Chun Shui Tang including Jollibee’s pilot restaurant “Tio Pepe’s Karinderia.” So next time you eat at Jollibee tell your friends and that you like to eat there because you “own part of the company.” You might want to own stocks of PLDT or Globe to help you become more prompt in paying your bills.

3.) You belong to a special group of people when you invest in the stock market –

When somebody will ask me to join a multi-level marketing scheme I always ask when the company started. The reason is that because if it started a long time ago, then my chances of recruiting other people will be slim because almost everybody I know has already been recruited.

But investing in the stock market is not multi-level marketing. It does not matter whether the market is saturated or not. But it’s good to know that we are among the first to exploit the market’s potential.

Most of those who invest in the stock market are from the class A and B segments of the population. An Asian Development Bank study done in 2005 revealed that only 600,000, out of the of the country’s 87 million population, invest in the stock market. This means that only 0.7 % of the population are involved in stock market trading.

Want to know more about investment strategies? Visit the blog of Zigfred Diaz where he blogs about several interesting topics such as investments, financial management, business, making financial online and Stock market investing

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