How to Invest in Stocks

How do I invest in stocks? How do you make money in the stock market?

This is probably the first question asked when someone in your inner circle knew that you're into investing. As if its surrounded with an aura of amazement when they realized that you're making most of your income from it. Investing in the stock market have its reputation to be risky, only for the intelligent and lucrative endeavor.

This is also what I thought when I first learned about the stock market. Its risky and I don't want to "gamble" my money in the stock market. Many people killed themselves because they lost their hard earned savings in the stock market. But like anything in this world, anything you thought of at first could be wrong once you make the effort to get to know it better.

I realized that investing in the stock market is fun and exciting. Looking thru the balance sheet of companies is like treasure hunting. Very different from what I used to think during college accounting subjects. Today, looking thru the balance sheet gives me excitement. Because you don't know if this is the company that would make you rich in the future.

To invest in the stock market is very easy. You just need to find a broker. A broker is a company or a person who is licensed to buy and sell shares of companies on your behalf in the stock market. They must be licensed because you don't know how many people gets scammed in this industry. There's a list of licensed brokers on the PSE website.

Once you found a broker, any decision you want to make, buy or sell shares, you have to tell this broker. Before, it used to be a person to person transaction and you have to phone your broker to buy or sell shares for you. But today, most brokers offer the ability to buy and sell shares on their own using an online platform. Which is very convenient indeed.

So, how do you make money in the stock market?

You make money when the share of the company you bought appreciates in value. As an example, DMCI, a publicly listed company in the Philippines, used to trade at P0.50, ten years ago. Today, they trade at around P50.00. If you have P100,000 invested in DMCI 10 years ago, today, your money is now worth P10,000,000. Yes. That is P10 million pesos. A worthy amount to retire.