Monday, February 18, 2008 More students invest in stock market
ONLINE stockbrokerage firm CitisecOnline Inc. is encouraging investors to orient their children about the benefits of trading in the stock market.
“It is a way to help them achieve financial independence at a young age,” said Edward Lee, CitisecOnline chairman.
Lee said some investors are getting their children involved in the stock market as early as 18 years old as a form of long-term savings investment.
He said CitisecOnline saw increased student-base participation in their firm because with a minimum investment of P5,000, students can purchase shares of a listed company.
In a press conference last Friday, Conrado Bate, company president and chief executive officer, said the younger a person invests in the stock market, the bigger his opportunities to accumulate savings over time.
“The rule of thumb is when you’re younger you invest bigger because you can still take on the risk. When you’re older, invest smaller because you might not have enough time to recover from the risk,” he said.
Lee advised new players in the industry to first select one or two “good performing” companies, build an investment portfolio and then open a CitisecOnline account.
The firm charges 0.25 percent of the P25,000 initial capital investment for retail investors.
Bate reported a 300-percent growth among local clients trading in the Philippine stock market but that the figure is “low-base” since there are still less than 1,000 local participants.
Education
This is why, he said, CitisecOnline will conduct more activities to educate the market on the benefits of online trading. These activities include the launching of an information dissemination campaign outside Metro Manila, starting in Cebu, to help widen the company’s investor base.
“Online trading will revolutionize the way Filipinos invest in the stock market. It is a new market in itself,” Bate said.
Lee also said online trading helps level the playing field between retail and big-time stock traders, and allows small-time investors to immediately trade stocks because all the information they need in making decisions are already posted on the website.
But before jumping on the bandwagon to financial independence, Bate said potential investors should undergo seminars on risk management and capital preservation.
He said the lack of appropriate information regarding the stock market has been the cause of many misconstrued stories.
“The stock market is not a gambling place,” Bate stressed.
Lee noted, though, that the “bandwagon or herd mentality” of many Filipino investors can be a problem.
“Be greedy when everyone is fearful. Be fearful when everyone is in the bandwagon,” he said.
Lee said the latest trend among investors is to buy stocks of mining companies.
“You have to know what period in the mining cycle you are in so that you’ll know when to invest,” he said.
Bate also said prospective investors must consider the “basic Ps” in choosing a company: people, product, potential and predictability.
CitisecOnline has been actively trading in the Philippine Stock Exchange since 1999. (MMM)
