Thank you ruy, for dropping by my blog :) , I am posting my answer to your query as a blog entry for the benefit of all readers.
Yes, if people thought of it that way, we will, like the Americans (a majority of Americans invest their money in their stock market, note the word INVEST), have become a wealthier nation.
First things first, do you know why Pinoys aren't rich? It's not because we don't know how to save, it's because we don't know how to invest.
Imagine there are about Php 1 TRILLION in TIME DEPOSITS. Time deposits give a return of about 3-4% in one year GROSS (truly GROSS if you ask me), and that depends on the level of placement. Now compare that yield rate with the inflation rate, which has historically been 6.5%.
Your money was eaten by inflation, i.e. your money was actually losing value as the years went by that the money was idly sitting in your bank account.
Now if people learned the values and virtues of investing, there'd be many a rich pinoy by now.
In the philippines, the small-ness of the stock market is its curse, as well as its blessing. you don't have to be a master of the stock market to know what companies will still be around 50 to 100 years from today.
Big name companies like Globe, Ayala Corporation, Philex Mining, SM Investments Corp are listed in the exchange. If you can't sleep at night investing in unknown companies, then invest in the big names, called blue chips. If you don't have any knowledge of the stock market, and would rather a professional fund manager handle it for you, then you have what we call mutual funds.
However, do remember, that investments, unlike pure bank savings accounts, are NOT capital protected, and DO NOT guarantee returns. The only other "investment" which gives you a guaranteed HUGE return are the likes of Francswiss, aka scams.
I hope that in my small, little way, I have brought enlightenment to my readers. Please spread the word about my Blog as a sign of appreciation. :p
Good luck and as Suze Orman would say, "Stay Safe!"
2 comments:
I can totally appreciate how inflation is totally eating up interest rates and I'm quite sickened by it as well. Imagine refraining from enjoying the money you earn right now just so you have something and can spend it 30 years from now at signficantly less than it original value.
Its depressing.
So basically, as long as we invest in blue chips, your assumption that businesses are built to earn money would hold true and so returns on your investment are more or less guaranteed.
Cool.
So rather than compound through a bank, might as well compound through investing in stocks.
So how do we go about buying stocks?
Thanks for you special attention and very specific reply/post.=)
I will definitely help spread the word.
Hi Ruy, on the part of the investment returns, there's still no way of saying there's a guaranteed rate. As I've mentioned, there are business cycles, as a company matures, its profits will begin to show signs of plateauing.
Also, even though the company will still be there, there are times the stock price will go down because there are times that the stock prices move in conjunction with the entire Philippine Stock Market Index (PSEi), like the recent market crash/correction.
But to your point, yes, better to compound money in stocks, as well as other investments, rather than just putting all your money in the bank.
If you want to directly invest in the stock market, you have to open an account with a brokerage firm. If you have other questions, you may also email me :)
You are welcome :)
Post a Comment