How to start investing in the stock market

For those those who are thinking of investing in the stock market, keep in mind that there are losers and winners at the end of each trading day. On that note, experts interviewed by GMA News Online share some tips on investing.

Marvin Germo, registered financial planner and personal finance consultant, is advising prospective investors to be prepared before diving into the equities market.

Feel confident and secure

On the other hand, an investor must always feel confident and secure about his or her stock investment, said Luis Limlingan, managing director at Regina Capital Development Corp.

Limlingan prescribes five basic approaches to stock investing:

Start with a broker

There are three ways to invest in the stock market: via a broker, online trading or mutual funds. Limlingan said it is best to trade with a broker in the beginning. Online trading is best for people with market experience, "because you will need to do all the execution and research by yourself.

By putting your funds in a mutual fund, you leave everything at the discretion of your portfolio manager. While this is okay for people with regular jobs, you will not be learning about the stock market as much as you can."

Deal with a licensed broker

Make sure you transact with a licensed broker and a stock brokerage accredited by the exchange. Ask your broker to show you his or her license, and get a list of qualified brokers from the Philippine Stock Exchange.

Ask for receipts

Any transaction with your broker, especially stock purchases, must have an official receipt.

Feel secure in your investment

Ask yourself three questions before investing: What is my risk appetite? My time horizon? My investment objective? "If you can answer all three, then you will know the best stocks and strategy for you," Limlingan noted.

Go for familiar industries

Pick stocks that that belong to an industry you’re familiar with, and work your way around related sectors. If you work in finance, consider banking stocks. Or, if you have a background in food, try consumer or retail-related stocks.

At the end of the day, it's your money and the decision is yours to take. — With Jannielyn Bigtas/VDS, GMA News