Stock Market Basics for the Busy Mom

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My brother and I are "stock market babies".  Our parents met by being office-mates in a stock broker firm.  We grew up listening to stock market updates on the radio, and eventually watching live updates on cable TV.  Our 94 year old gwama still updates herself with the stock market until now.  It's no surprise that it is one of the topics during family gatherings on my mom's side of the family.

I admit, I'm not as active in trading stocks as my parents and brother, but I do feel fortunate that I was exposed to it at an early stage.  Recently (specifically in the middle of the night when I find it hard to go back to sleep after being awaken by the kids, hehe) I have been thinking about ways to invest.  Then I realize I haven't written much about the stock market here.  Anyway, I'm no expert but I do hope that these simple tips will help fellow moms who are thinking of investing.

1. Know the Basics

Investing in the stock market involves choosing a company where you want to invest in and how much you are willing to buy and sell its shares.  The bid or buying price is the amount investors are willing to spend per share of the company.  The ask or selling price is the amount shareholders of the company are willing to let go of their shares.  An investor places a buy or sell order of shares of a certain company.  The stock market, through the brokers, matches your order with the asking or bidding price of another investor.  There are certain instances when it take some time for the orders to be matched, depending on how actively traded the stock is.  You can find that out by checking the volume of shares transacted during the trading day.

2. Being online makes transacting easier
Having internet access is helpful when monitoring your investment.  Citiseconline is an online stock broker that makes investing convenient.  You can register with them and place the amount you are willing to invest in your account.  Then you can place orders and view your portfolio online anytime.  If you like to add more funds to your account, you can do it online by transferring funds from your bank.  Then if you decide to withdraw, you can fill out a form so they can deposit the funds to your bank.  All stock brokers provide this service.  If you want a more personalized approach, you can contact other stock brokers through phone.  The advantage of transacting through phone is you can chat with your agent and maybe get tips :)

3. Invest money that you do not urgently need

Investments take time to bear fruit, and even blue chip stocks have their "down" stays.  Invest funds that you do not see yourself spending in the near future so you won't panic when the market is not doing well.  Also, in doing so, you can afford to be patient while waiting for your target price.

4. Read, research and update yourself with what's happening in the business world.  

The performance of the Philippine market is somewhat affected by the way the international market performs, particularly, in the US.  A stock of a certain company might rise or fall depending on a recent development or disclosure by the company.  For example, a company's shares is likely to go up if it acquires a new big client or go down if it's facing a public relations crisis.  Also, if you can, try listen to business analysts and read on their technical / fundamental recommendations on how certain stocks are performing.

5. Take profits when you have earned them

It's not considered an actual profit until you sell your shares.  As my aunts would say, a peso earned is still an earning, which is better than a loss.  Try setting a target price for the stock you own, then sell if you reach your goal.  Otherwise, you risk the price of the stock going down and you miss your chance to earn.  The same goes with cutting your losses.  If the market price becomes lower that the amount you bought your shares, consider selling and switching to a better stock. 

Hope these tips will encourage you to think about investing in stocks.  As a full-time mom, it's a challenge to find the time and resources to contribute to the kids bank accounts.  Investing in stocks may not be easy and risk-free, but it is worth it when done wisely.

Any stock market traders out there? Care to share some tips? :)