Basic seminars on stock trading by COL Financial and First Metro Securities
My basic knowledge on investing in the stock market
Prior to attending the basic seminars on stock trading offered by stock brokerage firms COL Financial and First Metro Securities (the stock brokerage arm of Metrobank), I had no idea how to get – and invest – in the stock market. I only had the following basic ideas:
- Stocks are shares of ownership in a company.
- If a business is listed in the Philippine Stock Exchange (PSE), it can be owned by the public.
- Stock market is risky at first but when you study it over time, the risks become minimal.
- If the stock market is down, the economy is in a bad shape. If it plunges further, the country is on its way to a serious economic/financial crisis. (Please correct me if I am wrong on this.)
- (If the aforementioned notion is true, then…) That’s the best time to buy stocks. (I have heard a popular saying which goes like this, “The best time to buy is where there is blood on the streets.”)
- Plus, the best time to invest in stocks is when the prices of stocks go down.
- Investing in mutual funds is one way to invest in the stock market. A mutual fund is a pool of money professionally managed and invested in specific types of securities. The fund manager monitors the markets wherein the funds are invested and also looks for more opportunities to invest, always with the intention to maximize the returns of the fund (definition from First Metro Asset Management or FAMI, the mutual fund arm of Metrobank).
Insights from Bo Sanchez
I also read a book by a popular lay preacher and entrepreneur, Bo Sanchez, who advised his readers to invest, not trade, in the stock market. He said, “I don’t believe ordinary people show be trading. I repeat, 80 percent of people lose their money in the stock market. My belief is that most of those 80 percent are traders. And most of the 20 percent who do earn money in the stock market are investors. So leave the trading to full-time traders, people who do this eight hours a day.”
So says the man who owns plenty of businesses and non-government organizations and invests in many different mutual funds. Of course, that is his opinion. It is from him I learned the difference between trading and investing in the stock market.
Bo Sanchez also said, “Trading is buying stocks and selling them within a few days. Investing is buying stocks and selling them in six months or never! (Warren Buffet, the man who made his billions in the stock market, rarely sells his stocks.)”
A free seminar and a paid seminar
I believed I was in the right place and time to receive new opportunities for learning.
One person I met at work is a COL member. She isn’t a regular investor, though, but whenever she could, she invests in stocks of companies, such as Jollibee, SM, and BDO. She told me about the free seminars COL Financial gives every week. So, I visited their Facebook page for schedules. I immediately signed up.
One Facebook friend posted a link to a Basic Education on Stock Trading (B.E.S.T) seminar offered by First Metro Securities. It wasn’t for free; the fee costs PhP 1000 but only PhP 700 for early birds. Since I had extra bucks, I registered. I went to the nearest bank to pay the fee.
Because the COL seminar was free, the venue was filled to capacity; some of the attendees even brought children. In my estimate, there were around 80 people, most of them middle-aged.
At the B.E.S.T of First Metro Securities, there were only around 30 people, mostly young professionals. Some of the attendees even came late. (Let me say this: When you pay good money to attend a seminar that could change your financial situation, you should never arrive late. You lose your money’s worth if you arrive late.)
I would like to mention that both venues are of the similar size.
What I have learned at COL and FirstMetroSec
I could say a lot. I would like to emphasize the following:
- The higher the returns, the higher the risks and the longer the investment horizon.
- You need to go through a broker to buy stocks.
- A good stock can be a bad stock at the wrong time.
- Limit your stocks to 3-5 companies.
- One earns from the stock market through capital appreciation and dividends.
- Invest in the long term to earn from stocks, mutual funds, and exchange-traded funds.
- Save for safety. Invest for growth. Build your growth fund.
- Don’t save forever. Saving is not enough. Saving is not equal to investing.
- You cannot enjoy the journey of saving if you are paying loans.
- Beat inflation by investing. Work smarter by buying investments.
- Investing your money in a money market mutual fund is better and yields more than putting your money in time deposits of banks.
- An index fund is composed of the country’s 30 largest and most active listed stocks. If you invest in an index fund, you invest in these top companies.
- There are six top mutual fund houses in the country. Aside from FAMI, the other five are Sun Life Asset Management, PhilEquity Management, Philam Asset Management, ALFM Mutual Funds (by BPI), and ATR Asset Management (ATRAM).
- One’s investment personality can change overtime. Plus, a person’s definition of success changes when they get older.
Investing through COL and FirstMetroSec
Both COL Financial (formerly Citiseconline) and First Metro Securities are online stock brokers. They have online platforms that offer investors access to both stocks and the six top mutual fund houses. COL investors invest in mutual funds through its Fund Source while FirstMetroSec invest through FundsMart.
Potential investors can open an account onsite, though First Metro Securities loves to do paperless transaction.
To open an account with COL or FirstMetroSec, you need to fill out a form and submit photocopies of important documents, such as government issued IDs, proof of billing, and bank account details (the most important). (Please contact COL Financial or First Metro Securities or visit the nearest office in your city to know more about these documents and how to submit them.)
With COL, investors pay PhP 1000 or PhP 2500, depending on the account they sign up. With FirstMetroSec, it’s PhP 2500. The best part is that you use the fee to initially fund your online account so you can start buying stocks or investing in the mutual funds of your choice.