5 minute guide to stock investing for beginners

For the person who has interest in investing in the stock market, this page will show you the advantage/benefits of
investing in stocks and how to execute trade transactions.
What are the returns on stock investment?
How much do I need to invest in stocks?
What is the structure of stock investing?

What are
What are the
the returns
returns on
on stock
stock investment?
investment?

The basic appeal of investing in stocks is the potential attractive returns.

Here are two examples:

Capital gain: Profit from a price increase, buying low and selling high

Income gain: Dividends. The firm will return some of the profits quarterly, semiannually, or annually to
shareholders

Risk and return are two sides of the same coin. It is a hard and fast rule in the investment world. Stocks are no
exception. The possibility of stock prices going down after buying stocks is a likely scenario. Listed companies
may also go into bankruptcy, but the attraction of stock investing is not only pecuniary return. Investors can also
gain corresponding rights as stockholders. For example, wield the right to vote at a general meeting of
stockholders and join the companys decision-making. Also, through the volatility of stock markets, investors
develop an interest in economics and socio-political happenings. Investors also get to learn to analyze financial
statements of the companies whose stocks they buy. These are by-products to make informed investment
decisions.

How much do I need to invest in stocks?

Do you have an impression that stock investing is only for the rich people? Actually, you can start to invest even
without a large amount of money.

The minimum amount required for trading depends on the lot size. The minimum lot, on the other hand, depends
on the stock price. Below are few examples of the minimum amount required based on The Board Lot table of
PSE (Philippines Stock Exchange):

(1) Php 2.00 (Share price) X 1000 shares(Minimum lot)=Php 2,000

(2) Php 2.00 (Share price) X 1000 shares(Minimum lot)=Php 2,000
(3) Php 6.00 peso (Share price) X 100 shares(Minimum lot)=Php 600
(4) Php 51.00 peso (Share price) X 10 shares(Minimum lot)=Php 510
(5) Php 2100 peso (Share price) X 5 shares(Minimum lot)=Php 10,500
*There are additional costs for the trading commission.
1
 The Board Lot Table
PRICE TICK SIZE LOT SIZE PRICE TICK SIZE LOT SIZE

From To From To

0.0001 0.0099 0.0001 1,000,000 50 99.95 0.05 10

0.01 0.049 0.001 100,000 100 199.9 0.1 10

0.05 0.249 0.001 10,000 200 499.8 0.2 10

0.25 0.495 0.005 10,000 500 999.5 0.5 10

0.5 4.99 0.01 1,000 1000 1999 1 5

5 9.99 0.01 100 2000 4998 2 5

10 19.98 0.02 100 5000 UP 5 5

20 49.95 0.05 100

What is the structure of stock investing?

Stocks are issued publicly to raise the capital for businesses. Buying stocks means that investors invest their
money in the company through its stocks, which in turn increases the capital of the business that can further be
used by the company for expansion.

What should I do when I want to buy stocks? Although the stock issuer is a company, investors dont buy from
companies directly. This is because trading stocks is centralized in the stock exchange.

ORDER ORDER

Investors Brokerage company Stock Excahage (PSE)

Investors must first open an account in brokerage firms which are the intermediary companies between the stock
exchange and the investors. Once the account is opened, investors fund the account so they can buy stocks.
Stock exchange efficiently executes multiple orders from different brokerage companies in accordance with the
fixed rule. The transaction is executed safely and investors settle their trades through the brokerage companies.

DisclaimerThis presentation is being issued solely for information purposes. This presentation does not contain all of the information required by a
party to evaluate the prospects of participating or utilizing the proposed financial products. Potential participants must conduct their own
investigations and analysis and rely on the results of such investigation in coming up with a decision to participate in any of the proposed financial
products. The data and information presented and included in this presentation do not purport to be complete and exhaustive. They have not been
independently verified as to their veracity and timeliness. BDO Nomura Securities, Inc. (formerly PCIB Securities, Inc.), including their respective
allied entities, as well as their respective agents, advisers, directors, officers, employees or representatives make no warranty or representation,
express or implied as to the accuracy or completeness of the contents of the presentation. This disclaimer extends to any statements, opinions or
conclusions contained in, or any omissions from, the presentation or in respect or in respect of written or oral communications transmitted or
otherwise made available to the prospective participants, and no representation or warranty is made in respect of any such statements, opinions or
conclusions. The contents of this presentation are strictly private and confidential. Accordingly, except with the prior written consent of BDO Nomura
Securities, Inc. (formerly PCIB Securities, Inc.), the information contained in the presentation must be held in complete confidence.
2