Principal Reasons in Investing in Stocks

Basically, stock is the share of possession of a general company. When you buy stocks, you became a co-owner of the company you bought. Stocks are being bought and sold in a stock exchange or stock market wherein there you will buy and sell stocks. You should have a stock broker before you can buy or sell stocks in a stock market. There you will open a stock trading account so that you can buy or sell stocks personally.

I encountered the word "stock" six years ago when I was working in a company in the Philippines. It was provided to me by the company because it is one of the privileges of all the workers. The number of shares given depends on the job function. That stock aid is really a big help for me and my family in terms of our financial demands in that time.

Investing in stock is a good investment you can ever make if you only know when and how to buy stocks. You should have also knowledge, discipline and diligence in controlling your investment in order to have an excellent profit from stocks. Remember that you can only lose money in stocks in two actions: when you buy and sell it.

In addition, one nice thing about investing in shares is that you can a greater earnings in the long term than other investment schemes available presently. Long term investing in stocks is you will buy shares regularly to a hand-picked stocks greater than 5 years.

In the Philippines, blue chips are those stocks included in PSE Composite Index (PSEi). According on the facts from PSE and BSP, the stocks invested in blue chips will give you a 14% average annual total return acording on the previous performance of Philippine stock exchange from January 1989 to August 2009.

Moreover, for the past 20 years, investing in stocks gives you higher average annual total profit compared to Treasury bills (T-Bills) and savings account with 11.0% and 2.3% average annual total profit, respectively.

Thus, investing in stocks, particularly blue chip stocks, is the best technique in order to earn higher return in stocks.

Gil Tenorio loves blogging on finance, saving and investment. He loves playing guitar and vegetable gardening. He lives in Korea with his family. To get more information on how to invest in Philippine Stock, feel free to go Financial Management, for free financial literacy articles on saving, investing and make money online.