Key Takeaways
Investing in the Philippine Stock Market allows individuals to beat inflation and build wealth through either active day trading or disciplined long-term investment strategies.
- Use technical analysis for fast-paced trading.
- Prioritize blue-chip stocks for long-term safety.
- Monitor liquidity and volatility daily.
- Reinvest dividends to accelerate compound growth.
Investing in the Philippine Stock Market is one way to reach your goals financially. You can save money faster, beat inflation and even prepare for retirement.
However, investing in the Philippine Stock Market is also risky. Choose the right stocks to buy and sell and avoid falling into a trap.
Trading versus Long-Term Investment
There are two types of investing in the financial market — investing and trading. Generally, investors buy and hold their stock positions for longer to maximize their returns. On the other hand, traders maximize rising and falling trends daily or weekly to gain more profits frequently.
How to Pick Stocks For Day Trading
- Check stocks with high liquidity – Liquidity pertains to how fast stocks are bought or sold in the market. You may want to look for these stocks. They are also cheaper.
- Pay attention to trading volume – Trading volume is the total number of shares traded within the day. One thing you can do is look at the most active stocks and monitor their performance.
- Keep track of volatility – Volatility is the rate at which the stock price increases or decreases. As volatility increases, the potential of increasing stock price in a shorter time also increases. Thus, giving you more money. Note that you also need to be careful because the price may drop quickly.
- Follow the trend – Following the trend is one of the strategic ways in day trading. In this strategy, you need to buy an asset when the price rises and sell when the movement goes down. You can use several indicators such as moving averages, RSI, MACD, Bollinger Bands, Ichimoku, and others.
How to Pick Stocks for Long-Term Invest
- Keep an eye on the fundamentals – When investing long-term, checking fundamental factors is a must. Look for its dividend consistency, price/earnings ratio, earning projections, and debt and current ratios.
- Purchase blue-chip companies – Blue chip companies refer to established, stable and well-recognized companies. These companies have a proven success record and are relatively safer investments. In the PSE, blue-chip companies include Jollibee Corporation (JFC), Ayala Corporation (AC), Banco de Oro (BDO), and many more.
- Invest when the market is down – Putting money when the market down means setting yourself up for significant gains when it rises. No matter what your plan, it can set you up for long-term success.
Frequently Asked Questions (FAQs)
Traders aim for frequent, short-term profits by capitalizing on daily or weekly price fluctuations. In contrast, long-term investors buy and hold stocks for years, focusing on steady growth, company value, and dividend payouts to maximize returns.
Focus on stocks with high liquidity and trading volume so you can enter and exit positions quickly. Look for high volatility to capture significant price swings and use technical indicators like Moving Averages or RSI to follow current market trends.
Prioritize fundamental analysis by checking a company’s dividend history, P/E ratio, and debt-to-equity levels. Stable “blue-chip” companies like Jollibee (JFC) or Ayala (AC) are popular choices because of their proven track records and reliable performance.
Yes, buying during a market dip allows you to acquire shares at a lower price, increasing your potential for significant gains when the market recovers. This strategy, often called “buying the dip,” is a core component of successful long-term financial planning.
Indicators like MACD, Bollinger Bands, and the Relative Strength Index (RSI) help identify if a stock is overbought or oversold. These tools provide visual signals on price momentum, helping you decide the best time to execute a buy or sell order.
