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What are stocks?

Stocks are shares of ownership in a corporation. The stock market is a place where stocks are bought and sold. The Philippine Stock Exchange (PSE) is the corporation that governs our local stock market. People buy or invest in stocks to benefit from a company's tremendous value potential over time.

Trading at the stock market is from 9:30 am to 3:30 pm, Mondays to Fridays except during holidays or when the Bangko Sentral ng Pilipinas (BSP) Clearing Office is closed. Brokers are given a 10-minute extension to finish their transactions at closing prices.

After your order has been carried out, the brokerage house will give you an invoice showing how much you will have to pay for the transactions.

When you decide to sell your shares of stocks, you will again recieve an invoice for the transaction.

Why do people buy stocks?

Investors buy stocks for various reasons. Here are some of them:

  • Capital appreciation, which occurs when a stock rises in price
  • Dividend payments, which come when the company distributes some of its earnings to stockholders
  • Ability to vote shares and influence the company

How to buy and sell stocks?

You can buy and sell stocks through:

  • A direct stock plan
  • A dividend reinvestment plan
  • A discount or full-service broker
  • A stock fund

Two ways to earn in Stock Market:

Your profit can either be in the form of Capital Gains or Dividends

  • When you sell your shares of stocks at a price higher than the purchase, your profit will be in the form of Capital Gains. Capital Gains is the increase in value of your stock from the price with which you had bought.
  • If you wish to hold on to your shares indefinitely, the second way for you to earn will be through Dividends, which can be in the form of cash or stock. Cash Dividend is the earning for every share declared by the company. Stock Dividends are additional shares given to shareholders.