building wealth through stock_market investing
TRANSCRIPT
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Building Wealth through
Stock Market Investing Presented by:
Juan G. BarredoVice PresidentCitisecOnline.com, Inc
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CitisecOnline.com… who we are
CitisecOnline is a leading and fastest-growing online stockbrokerage firm in the
Philippine Stock Exchange.
CitisecOnline is the largest capitalized
stockbroker with over half a Billion Pesos in
resources, COL is publicly listed in Philippine
Stock Exchange & is also member of the
Hong Kong Exchange
CitisecOnline is committed to empowering
the Filipino investor to achieve financialindependence by providing online access,
research information, and educational
seminars about stock investing
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Retirement
Children/Education
Cost of Living/Housing
WHY invest?
Investing is the most effective way
to build your personal wealth and
reach your financial goals!
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Year
Purchasing power of Php100
stashed away in 1970* (not invested)
1970 100
1980 59.87
1990 35.85
2000 21.46
2009 12.85
WHY invest?
* Assuming a 5% annual Inflation (currently at 4%)
0.002.00
4.006.008.00
10.0012.0014.0016.00
18.0020.0022.00
939495969798990001020304050607080910
Interest Rates (91-day T-Bill)
Allow money to growfaster than interest rates!
Safeguard capital against theeffects of Inflation!
1 2
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What is the Stock Market?
The stock market is the place where you can invest
in other peoples’ publicly listed companies.
A company sells shares of stock through an Initial
Public Offering (IPO)
Companies sell part of themselves to new
shareholders at future valuations to raise more
money thereby funding their growth faster
The faster and more durable a company's growth…
the more attractive its becomes
Investing in the Stock Market
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How do we make money in stocks?
You invest into a company to participate in its growth
through:
Price Appreciation - the ability for a stocks’ price
to increase in value as driven by investors demand
to buy into a prospective or already growing
business
Dividends - profitable companies may return some
wealth back to shareholders by distributing someof its profits back to them
Cash dividends
Stock dividends
Investing in the Stock Market
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Stock Market Superior Track Record
History has proven that
investing in quality stocks
can provide greater
returns than most
instruments; giving a good
run over inflation…
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Stock Market and Investment Funds
Mutual Funds:
• Investing through a fund that
pools investor money to have
access to broad investments
and is run by a fund manager
• Risk can be spread out thru
diversification
• Gains may be moderated dueto diversity
• Poses no time concern for busy
folk / no control over fund
Direct Investment:
• You invest directly into
companies you like – you
become your fund manager
• You directly control your risk
• Good stock picking can open
up gains
• You must spend some time to
learn / review / rebalance
your investments picks
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Stock Market and Investment Funds
http://business.inquirer.net/mutualfund/mutualfund.pdf
PSEi Performance
YTD 33%*
1-YR 35%*
1-YR High 47%
1-YR Low -7%
3-YR 12%*
5-YR 91%*
* No cash dividends added
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Stock Market 101
Remember some guidelines:
Invest for the long term
Pick good quality stocks
Diversification and Money Management
Use a methodology
Also take advantage of technology –
onlinetrading facilities can support a wider scope
of research and stock information gathering
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PSE index
#1: Invest for the Long Term
Long terminvesting solvesthe problem ofvolatility. Allows acompany time togrow and workout
faults and profitfrom compoundedinvestments.
Marcos:People Power 1986
Aquino:Coup De Etats
Asian FinancialCrisis
Edsa II Revolution
Ramos:Power Crisis
Global FinancialCrisis
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#2: Pick Good Quality Stocks
Look for companies that:•Grow their Earnings/Income = Look for strong,
lasting, and increasing profitability
•Are Cheap in Value = Look for good stocks
whose Market Price is preferably lower than
what it is expected to be worth (Fair Value)
•Good Story = Look for companies with a buzz,
great products/services or a catalyst for growth
PROFITS
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#2: Pick Good Quality Stocks
Prices and Fair
Values (or price
targets) are
shown
Projected
Earnings also
shown for
coverage list
Assess their
dividends
Investment Guide
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#2: Pick Good Quality StocksCompany Reports
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#3: Diversify & Money Management
*These are only suggested percentages based on investors’ capacity to take on risk; as a rule of thumb,
younger investors can take more risk given that they may have a longer period to withstand volatility
I n v e s t m e n t M i x
Rule 1: Spread OutDo not put all your eggs in one basket;
spread out to different investment classes
(i.e. different stocks/industries)
A l l o
c a t e C a s h
Rule 2: Be comfy with your investment size
Compute 100-Age = Max % of Savings that
can be invested in Stocks*
Ex. A 35 year old can invest up to 65% of savingsinto the Stock Market
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Your Portfolio Page – track your cash and stock positions anytime
#3: Diversify & Money Management
Get yourBalances and
Positions
anytime
Access your
account
ledger
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• Trend Trading Strategy
• Time market swings to provide short term entry
and exit strategies
MarketTiming
• Gradual Buy and HoldStrategy
• Make steady and fixed Pesoinvestments through time
on good companies
Peso CostAveraging
#4: Use a MethodologyMarket Timing or Cost Averaging
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Method A: Market Timing
•Trend Trading is thetechnique of taking
advantage of short to
medium term swings in
market action
• Aim: Identify and follow
market direction
•Technique: Buy into Up
Trends; Sell into DownTrends thereby limiting
downside risk
Ayala Land Inc (2001-2009)
Try COL’s Java Charts!
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6
5
4
3
Peso Cost Averaging is a personal wealth-building
strategy that involves investing a fixed amount of money at regular intervals over a long period
Month 3
Buy Php5,000 worth of stock ABC atmarket price
Month 2
Buy Php5,000 worth of stock ABC atmarket price
Month 1
Buy Php5,000 worth of stock ABC atmarket price
Designed to reduce market risk by stretching out the
purchase of stocks over time, buying more when pricesare low and buying less when it is high, effectively
keeping your average cost down
Method B: Peso Cost Averaging
1 2 3 4 5 6 7 8 9Month
Ave Cost per Share
You get buy
more shares
when pricesare low, less
when prices
are high…!
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A viable long term plan
Peso Cost Averaging
Stock/
Indicator
Effective
Annual Yield
Time
Frame
TEL 18.88% 18 yrs
BPI 16.92% 18 yrs
AC 11.16% 18 yrs
JFC 10.7% 14 yrs
Inflation 5.7% 18 yrs
Retire with an Extra 10 Million!
Invest Monthly Php5,000
# Years 21
Return Rate 16.9%
Total Investment (P) 1,260,000
Will result in a…
Future Value (P) Php10M+
Investment Gain 740%
Share price history from 1990 to 2007
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Introducing COL’s EIP The COL Easy Investment Program is the latest service from
CitisecOnline which makes it easier for our customers to
apply the method of peso-cost-averaging.
Features
•Premium Stock List – have access to our research and
premium growth stock recommendations
•EIP Portfolio – have access to your EIP positions
anytime and track their performance
•Schedule Calendar – plan out your purchases over
time by building a continuing calendar of orders that
will prompt you through Email reminders
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Trading Online: In the palm of your hands!
• Direct execution and Off Hours Order
Placement
• Live quotes and market statistics• Live portfolio monitoring
• Research studies and Seminars
• Charting tools
• 24/7 online service
• Customer Service
• Best commission rates
at ¼ of 1% (or 0.25%)
Getting Started! CitisecOnline Provides:
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COL’s Web Features
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Getting Started with COLOpen an
Account
• Fill up application form
(downloadable)
• Provide a photocopy of a valid govt issued ID
• Provide any copy of
your latest billing
statement*
* For non face-to-face meetings
with account holders
Funding your
Account
• Choose account type:
• COL EIP - P5,000
• Trading - P25,000
• Deposits at our Business Center
(PSE Centre Tektite Pasig)
• “Merchant slip” or “Online”
deposits thru our partner banks:
• BDO• BPI
• MetroBank
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THANK YOU!
To learn more about our COL Easy Investment Program or know
more about our services and free seminars…
Please visit our website at www.citiseconline.com
Call our customer hotline: 6-333-777 (Mon-Fri 9am-5pm)Email: [email protected]