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frequently asked questions

Getting Started

Stocks Basics

  • What is investing?
    • Investing is the act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit. Simply put, investing means putting your money to work for you. (http://www.investopedia.com/university/beginner/beginner1.asp#axzz255mJmtg3)
  • What are stocks?
    • A stock is a share of ownership of the company. Simply put, being a stockholder makes you a part-owner of that particular company! The more stocks that you have for a particular company, the more shares you own of that company. As the owner of a stock – the stockholder, you have a claim on the companies’ assets and earnings. (http://www.investopedia.com/video/play/what-are-stocks#axzz24o22LxlQFirefoxHTML\Shell\Open\Command)
  • What are dividends?
  • What are the risks and rewards of investing in stocks?
    • Risk and reward are two fundamental considerations when investing in the stock market. Investing in stocks can give you high income potential, provided that you have researched well and made good decisions of the stocks that you may want to trade. As to any investments though, the greater the potential reward, the higher is the risk. Usually, when an investor is blinded by a huge potential payoff or terrified of a loss, he or she is more exposed to risks, and therefore cannot make good decisions. Minimize this risk by having a full understanding of potential losses. Another good thing about stock investment is that it is a liquid investment. Liquidity refers to the ability to convert an asset into cash quickly. This means that owning stocks of a particular company assures you of a liquid asset. Furthermore, stock investing has its tax advantage. Earnings from capital appreciation are not charge with capital gains tax. The only tax that investors pay when selling is the stock transaction tax which is only ½ of 1% of the total selling value. This is significantly lower than the tax of 20% from the interest income from savings and time deposits. (For reference: PSE video clip 2) http://stockssimplified.wordpress.com/2011/07/03/why-do-investors-buy-shares/
  • What are the (top) investing myths?
    • Myth 1: Stocks are only for the rich Contrary to popular belief, the stock market is not a club exclusive for the rich. In fact, the market is open to anyone who wants to participate. Rich people engage in the stock market every day because they are keenly aware of the great deal of profit that can be made of the stock market. With Philstocks, we can help you take your disposable income and turn it into a golden future, just like the millions of people who have made substantial amounts via taking part of the stock market. For as low as Php 5,000, you can start investing into the stock market with us.

      Myth 2: Stock Investing is gambling The stock market is NOT gambling. There is a myth that putting money in the stock market is synonymous to putting money into gambling. Some say that there is a high risk for your money to disappear with the wrong purchase or with market fluctuations. This is a myth. Gambling is relying on nothing but your gut feeling and on chance. Investing in the stock market is far from that. As we are given the right tools and training, we will see that investing in the stock market can be a scientific process. Not many people are aware that trading has rules and regulations. It is not so much taking a blind risk; rather it is placing your trust in a stable company or companies. Trading in the stock market involves forecasting, tracking and trending. All movements are calculated so that all possible risks are minimized, and so that your returns are maximized. The stock market is not a game, and trading is not playing. It is a place wherein ordinary people, like you and me, can take part in the building of our nation’s economy.

      Myth 3: It is difficult The stock market is NOT difficult to comprehend. Stock trading is not confined to analysts and economists. It is not kindergarten mathematics, but it isn’t rocket science either. There is information available in all forms that will make all of us more aware of the movements in the economy. With the advent of the Internet, we can get fundamental and technical information from a lot of trusted websites. There are a multitude of blogs to learn from, ranging from hard-core analysis of the market, to a layman’s step-by-step guide of the industry. Moreover, the PSE and SEC conducts regular learning sessions for those who may want to learn more about the market. With this overwhelming information around us, understanding the stock market is not an impossible feat. At the end of the day, it is our desire to learn that will enable us to become an empowered trader.

  • How does the stock market work?
    • The stock market is not a building or a structure; rather it is a collection of companies and individuals. Qualified companies converge here and open ownership to the general public through the buying and selling of stocks. It is where the buying and selling of stocks (and other transactions) from PSE Listed Companies take place. Locally, we have the highly capable PSE, which is a unified platform for trading for all the qualified companies in the Philippines. We have two trading floors: one in Ortigas and one in the Makati Stock Exchange. Although there are two locations, the Ortigas Trading Floor and the Makati Trading Floor are unified and move as one entity called the Philippine Stock Exchange.
  • How do I make money out of stocks?
    • There are two ways for you to make money in the stock market: through Price Appreciation or through Dividends.

      (1)Price appreciation is defined as the money you make through the difference between the price at which you bought the stock and its current market price. For example you bought 300 shares in XYZ Company during June of this year at Php 20.00 per share, amounting to a total investment of Php 6,000. In June of the following year the amount per share increased to Php 23.2 and in the following year it increased again to Php 26.91 per share. Following the same increase pattern for 2013, this will give you Php 31.21 per share. In the end, it will give you a profit of Php 3,365.38 in three years. The second way to make money in the stock market is through

      (2) dividends. Dividends are your share of the company’s success as a part-owner. Dividends may come in the form of cash or in the form of stocks. For example, you have 300 shares of stock in XYZ Company and they released a cash dividend of five pesos per stock. You simply multiply Php5.00 to how many stocks you own, which gives you earnings of Php 1,500 in one day. If the cash dividend released by XYZ Company is Php 40.00, you would have and earning of Php 12,000.00, and so on and so forth. For stock dividends, we talk more of percentages. If the XYZ Company releases 100% stock dividends, for example. That means that your shares are doubled. In this hypothetical example, your 300 shares become 600 shares without you having to purchase any new shares. If XYZ Company, however, releases 25% stock dividends, ¼ of your shares, will be added thereby turning your 300 shares into 375.

  • What are the key success factors when investing in stocks?
    • A. Analyze yourself – What do you want to accomplish with stock investing? And what are your investment goals?

      B. Know where to get information – The decisions you make about your money and what stocks to invest in require quality information. Understand why you want to invest — are you seeking appreciation, capital gains, or income dividends?

      C. Do some research – Look at the company whether it is a profitable company worth of your money. A winning stock is from a winning industry. Understand how the world affects your stocks – stocks succeed or fail in large part due to the environment in which they operate – thus, know something about economics and politics. Furthermore, understand and identify mega trends.

      D. Use investing strategies like the pros do – in other words, how you go about investing can be just as important as what you invest in. Sometimes, what people tell you to do about stocks is not as revealing as what people are actually doing. Look at company insiders and digest the information well before you buy or sell that particular stock. (Transcription of Paul Mladjenovic’s Key Success Factors in Stock Investing for Dummies; Video URL: http://www.youtube.com/watch?v=Q6otSoMD7Bo&feature=rela

  • What moves stock prices?
    • The law of supply and demand works in the stock market. If all things are held constant, the stock price increases when there is an increase in demand of the stocks that you may want to buy. More demand in the market causes stock prices to go UP because an increasing demand causes buyers to buy the stock at whatever price it takes. On the other hand, the stock price decreases when there is an increase in supply of the stock. That is, more supply in the market causes stock prices to go DOWN because an increasing pressure to sell causes people to sell the stock at whatever price it takes. Furthermore, robust economic growth, low inflation rates as well as stable interest rates and foreign exchange rates are good news for the stock market. They usually have a positive impact on market performance as these indicate a sound macroeconomic environment. An opposite scenario in any of these economic indicators could negatively affect the stock market.
  • How do I protect my portfolio?
    • A. RESEARCH YOUR INVESTMENTS if the company meets its objectives; research also for its earnings and dividends (how much profit paid to shareholders); its market capitalization (or total (dollar) value of all company shares) and its institutional ownership (or the percentage owned by these institutions).

      B. KNOW THE LONG TERM TRENDS – If the price generally moves from lower left to upper right, then the trend for that time period is moving higher. Stock prices move higher when the buyers are in control and money’s moving into the stock as with any other investment continue demand helps drive prices higher. On the other hand, a price chart that moves from upper left to lower right, it indicates a down trend. This tells us that sellers are in control, or the demand is waning and the prices are falling.

      C. CONSIDER RISK VERSUS REWARD – This step should be done before you make your initial investment and then evaluate it on a regular basis.

      D. DIVERSIFY YOUR PORTFOLIO — You should include some types of investments and stay flat or even drop a little when most of your stocks are going higher. However, that same investment may go higher when the rest of your stocks are underperforming — this is the idea behind a diversified portfolio.

      For reference: https://us.etrade.com/investor-education?videoed=TP-BAS-WS-1

  • What are the top mistakes that traders make?
    • Research shows that the top mistakes that traders make when investing are the following:

      A. INVESTING WITH EMOTIONS There is a lot of emotions involved in stock investments. However, emotions tend to get in the way of logic and you end up feeling your way through trades. Instead, start with a plan. A plan is your accountability partner. It lets you set your trading rules and then stick to your discipline. Don’t make it complicated though-a simple plan with simple rules will help you use your head rather than your heart.

      B. ASSUMING BAD TRADES RECOVER Not every trade will recover. Some simply go from bad to worse. It may not feel good to close a losing trade, but it’s far better to take a small loss now than to risk taking a large loss later.

      C. TOO HIGH EXPECTATIONS A big disclaimer about the stock market is that it is NOT a “Get Rich Quick Scheme.” Having too high expectations – i.e. you think you’re going to make Php1000 a month from a Php5,000 trading account – it is just not realistic. It’s easy to think that the markets are a place to get rich, but remember-the markets historically have rewarded the disciplined, not the greedy.

      D. COMPANY = STOCK PRICE Sometimes a good company has a falling stock price. Other times, a company that might not be doing so well has a stock that’s going through the roof. Remember: you make money from the stock, not from the company’s performance.

      E. DOUBLING DOWN If you buy a stock and it goes down, you’re just asking for trouble by buying more of the stock in the hopes you’ll break-even. Doubling down on a losing trade usually leaves you losing money faster.

      Avoiding these mistakes consistently requires time for you to learn. Take the time to invest on your education and help yourself become a smart investor.

      For reference: https://us.etrade.com/e/t/jumppage/viewjumppage?PageName=snapshot_trader_mistakes

  • What is online trading?
    • Compared to a broker-assisted trading – where orders are made with the help of a traditional stockbroker, online stock trading involves the use of the Internet by the investor itself to place orders when buying and/or selling securities.
  • Why should I trade with Philstocks?
    • Online trading is now made easier with the launch of Philstocks Online Trading Platform — your one-stop online trading destination, providing you with a 360⁰ view of business and economy. All you need to know is right at your fingertips. The new and improved interface provides you with relevant and essential information with just one click, and with easy-to-navigate pages, walk-through programs and mouse-over features. Philstocks makes online trading more affordable with a minimum of Php5,000 investment rate. Philstocks also offers its clients the industry’s lowest commission rates of .25% or a minimum of Php20 whichever is higher. With Philstocks Online Trading Platform, you can buy and sell stocks like a pro! All you need is an internet connection and you’re good to go! Register now!

Stock Lodgement

  • What can I do when my stock certificate has been cleared?
    • Once your stock certificate has been cleared, the stock certificate holder has the option to SELL his/her stocks immediately, or HOLD the stock until it hits its desired stock price.


      Initial Cost:
      Transfer Fee (Php 100.00 per stock + 12% VAT) = Php 112.00
      Cancellation Fee (Php 20.00 per cert. + 12% VAT) = Php 22.40
      TOTAL: Php 134.40

      If you decide to sell the stock immediately, you may call our assigned Certified Securities Representative (CSR) / licensed agent to post your SELL order at the prevailing market price of the stock. Once your SELL order has been matched, you can get the proceeds of the stock transaction sale in three days (T+3) after the stock is sold.

  • What are the charges and fees do I have to pay when I decide to sell all my stock certificates?
    • The initial cost for clearing the stock certificates is:

      If you decide to sell your stock, the following costs are incurred: – a commission rate of 1.5% of the gross amount – 12% VAT on commission, – 0.5% sales tax of the gross amount, – PCD/ other fees, – SCCP fee, PLUS – Initial costs (for the processing fee of PDTC)
  • Can I use these stock certificates to open an online trading account?
    • Yes, you can open a Philstocks account using your stock certificates, provided that the estimated value of the stocks is not less than Php 5,000.00 (minimum initial investment required to open a Philstocks account.)

  • Can I “lodge” my stock certificates into my Philstocks trading account?
    • If you have already an existing Philstocks account, you can lodge/ deposit your stock certificates to your account, provided that the name on the stock certificate is the same with the name in your Philstocks account.


      Your stock certificates will undergo the basic stock lodgment process. Once your stock certificates are cleared, you may advise our Customer Experience Department to deposit these stock shares to your Philstocks account. The number of shares will then be reflected to your trading account.

Account Troubleshooting