Real talk for investment newbies
Investing hard-earned money in the stock market that doesn't always promise immediate cash-back is not immediately enticing and can be quite scary especially for people who have just started earning enough money to pay for little luxuries in life like an every day latte, or weekly spa and nail salon visits.
But no matter how daunting it is to make that bold move, many young professionals have started dipping their toes in the stock market game. Armed with some guts, a bit of internet research, and stories from friends who’ve started investing, many yuppies make the initial minimum investment and hope that somehow, something good will come off of it.
However, investing does not end there. Newbie startup investors will quickly realize that there is so much left to learn. So while there is a vague idea of where the money has been invested, UTrade, the online stock trading program of Unicapital, is here to explain investments in layman’s terms.
Expect the Risk-and-Return Tradeoff
Accept that safe investments, will not have as high a return compared with investing in riskier, but potentially more profitable companies. The principle behind the risk-and-return tradeoff is that potential return will increase with an increase in risk. Higher returns come if the investor is comfortable in high potential losses. Investing in the stock market means awareness of personal risk appetite. Ideally, a balance of high risk-high yield and low risk-stable return will net profits in the long term.
Expect to Own Portions of Companies
Buying stocks from different companies means owning pieces of those companies. Profit reports and market status are now more than just figures on screen that changes value by the minute. And they don’t necessarily reflect current values; sometimes, lowered expectations apply only for short-term gains, with investors who stay, earning more. For example, a company opening more branches may mean lower share values in the short term because of corporate expenditure, but higher gains because of projected income from expansion. It is important to be vigilant to these kinds of movement when investing in stocks.
Expect Contradicting Information
Investing in stocks is confusing, especially for a newbie. While the internet is a trove of investing information, interpretation differs per website. Instead of navigating the stock market alone, some people defer to online trading platforms, like UTrade, to help them manage their stock market portfolios online. UTrade has a Stock Investment Program (SIP), in which clients can invest a fixed amount at regular intervals on a particular stock. The platform allows clients to trade, view and modify orders, and even compare the values of different stocks. It also allows free and easy access to market information and proprietary research reports.
Aside from managing portfolios online, UTrade also offers free weekly seminars on the basics of investing in the stock market; and makes available experienced brokers who can guide clients through the investment process, as well as provides recommended stocks depending on the financial goals of the client.
Having realistic expectations are important when investing in the stock market. With the appropriate knowledge and credible tools, any one can have better chances of playing and winning in the stock market.
UTrade is the online stock trading platform of Unicapital Securities, Incorporated, a leading full-service securities brokerage house licensed by the Securities and Exchange Commission (SEC) and is a bona-fide member of the Philippine Stock Exchange. Through its trading platform, clients can buy and sell any stock listed in the Philippine Stock Exchange, and provides clients with real-time access to research reports and market information. For more information on how to invest, visit www.utradeph.com, call +63 2 823-5344 / 63 2 8920991/ +63 999 8857616, and like www.facebook.com/UnicapitalOnline.