We recently launched a new fund-the PruLink Equity Fund. The fund seeks to optimize medium- to long-term capital growth through investments in shares of stocks listed at the Philippine Stock Exchange. This fund is for those who have high-risk appetite for their investment. To better prepare us for the demands of investors who are becoming more learned and sophisticated, we opted to expose ourselves into this world ruled by a lot of misconceptions. Taking part in an exposure trip to the Makati Stock Exchange trading floor was truly an experience!

Our branch manager, Ms. Che Martinez, arranged our tour and information session. The Philippine Stock Exchange has a Market Education department, which aims to reach out the general public and promote stock market investing through educational seminars. We were privileged to hear from Jay Peñaflor who gave us a general overview of stock market investing.

Sapi is the Filipino word for stock. In English, it literally means “possess” or “acquire”. A stock investment represents ownership on a company, where the investor (of common stock) is entitled to vote and share in the profits of the company he invested in. He can also claim on the company’s asset and earnings in the form of dividends.

Here are a couple of most frequently asked questions:

Q: Is it risky to invest in stocks?
A: One must have a healthy dose of knowledge coupled with discipline. Without either one, then there is a very high probability that the investor will lose his money for he does not know what he is getting into or doing.

Q: How do we pick a good company to invest in?
A: For beginners, it would be advisable to invest in blue chip stocks, which have the following characteristics:
1. big and profitable company
2. very stable price movement/minimal risk
3. declares regular dividend payment to stockholders

Personally, I’d take Warren Buffet’s advice: “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

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