Before I finally jump into stock market investment, can you help me?

January 31, 2013 | By Fitz | Filed in: Investing.

I’ve been reading about how to invest this past days and I slowly getting the grasp of it. So far,

I’m interested in peso cost averaging investment in stocks. However I just have some questions that

I need help to solve this in order for me to start investing with this kind of strategy. I hope you could help me guys regarding my queries.

 

1.) Is it advisable to put my money in cost averaging investment instead of putting it my savings? As of now, I don’t have yet any savings, however I’m thinking that I’d rather put my money in investment rather in savings because it would earn higher return. And another thing, because of the time, we know that in cost averaging investment, the younger you start investing, the better.

2.) I’ve also read that cost averaging can be applied in UITF and mutual funds. However, I opt to invest in stock market, is it a good decision? what are the advantage and disadvantages of it?

3.) So let’s say after 10 years, I’ve been faithful in investing doing cost averaging. Now I’m ready to sell my stocks, wouldn’t it be a problem to me to sell my stocks? Is it easy to find someone who will buy my stocks?

4.) As of now, I’m thinking of 7k per month as a budget for my investment because that’s what can I afford with my current salary. What if, next year I’ll have a big increase with my salary, is it advisable to increase my budget per month.? Let’s say from 7k to 10k per month.

5.) What if the market price of the stocks I’m buying gets higher and I cannot afford to buy the minimum required share? How do I deal with this? Do I need to increase my budger also so that I can afford to buy their stocks? 

6.) I’m planning to open an account with citisec, but out of curiosity, what if after 20 years this broker happened to close? or is it possible? what will happen to my investment then?

7.) Is it advisable to buy stocks of 2 different company, and then invest alternately every after month? Let’s say 1st month I’ll buy 7k stocks of JFC, then the next month 7k stocks of ALI, Then so on and so forth going alternately. Is it a good strategy?

8.) Which company is better to invest in, a company that has a higher price per share (which means I can only buy least shares)

or a company that has a lower price per share (which means I can buy more shares). Considering both companies are good quality.

For Example :

Monthly budget : 7,000

JFC = 108.80(minimum 10)=>I can buy 60 stocks for 6,528

Ayala Land Inc = 28.30 (minimum 100)=> I can buy 200 stocks for 5,660 

SMPH = 17.24 (minimum 100)=>can buy 400 stocks for 6896

Which among these 3 is a good deal?

9.) They say that in cost averaging, you dont have to concern about timing the market. However consider this scenario:

Every 15th day of the month I buy stocks from Ayala land Inc, what if on that day, the price of their stock is on its highest? Should I consider buying tomorrow instead, hoping that the price will go down? 

These are the questions that wonder in my mind. I’m really interested in investing using cost averaging, but I just need to clarify those before I jump into this kind of investment.

 

I hope that you could help me guys!

 

Thanks in advance! 🙂

 

 

 

 

 

 




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5 Responses to “Before I finally jump into stock market investment, can you help me?”

  1. nilo catabian says:

    when you say cost, averaging …it’s about numbers and do math……and investing……you do market…..just buying in the market looking for fresh affordable item to buy ….how do you see it…….in stock market ….I’m only a newbee…i see number and other stock market terminologies you must know the language……pagbilan po nito pwede ba tumawad…..same in stock you must know were is that number so i can read the price high.low.etc.. i hold my calculator to help me na pag i sell it on that time eh kumita naman ako…i give you one hint and it’s applicable and tell me kung hindi……kung saan mura doon maraming tao…..kaya nga maraming tao kasi lahat sila negosyante at veterano na sa market……simple pero totoo saan mo makikita ito sa stock….kaya magresearch ka…hahaha happy research for stock market

  2. nilo catabian says:

    in long term investment you buy bullish o tawag nila blue chips …try to compute how much earning and estimated income mo sa stock…..use 10 commandment of stock market….do “trending” analyzed mo kung anu ang tataas for this year(halos lahat ata ng stock tataas-kaso hindi natin alam kung ano una )……marks sa trader “popularity and friends”.buy different stock,,,,parang gulay yan minsan nawawala sa panahon para ma-balance ang gain n lost mo….sa high and low yes sa rule ng stock ” buy low sell high”…don’t break the rule….you can shift sa ibang stock pag-alam mo na too much buy na yung stock using the chart…..follow the blue line the…then bili k naman ng low using the graph chart…monitor the gainer ang loser….pagmataas ang price you can buy unti-unti ng boardlot na suggest ko bluechips stock eto long term investment medyo mataasang price ng mga bluechips sa tagal nila sa market.

  3. nilo catabian says:

    i use citisec meron naman silang receipt and other printable forms na you own the certain shares kaya i think no worry ///

  4. ayza reyes says:

    Rule Number 1 in investing is to never invest unless you already have an emergency fund. So if I were you, I’d save about 3 to 6 months worth of expenses first before investing in stocks, or mutual funds, or UITF.

  5. Gil Dolon says:

    First and most important thing you rid yourself of when you finally decide to invest is EMOSYON – dapat wala ka nito! Second is your investment horizon – you’re here for the long haul, not 3 years, not 5 years but perhaps longer – 10 years as a minimum I would propose. Lastly, the money that you put in the stock market (in fact in any investment) is one that you have no desire to spend on something else.

    Venture into mutual funds first. This is a good break-in into what you have heard as cost averaging method. Choose a straight equity fund or a mix (equity + fixed income). There are a number of mutual fund companies already offering these products.

    Don’t forget to keep your savings/TD accounts healthy to sustain your expenses.

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