...Investing in the Philippine Stock Market: Worth it! A Term Paper Presented to Ms. Auracel Laplana-Alejandro Humanities Division Ateneo de Davao University In Partial Fulfillment of the Requirements for the subject ENGL 23 – Writing Across the Disciplines Second Semester, SY 2014-2015 By Ronsard-Novem N. Timan Adlin Joey Almencion February 20, 2015 Investing in the Philippine Stock Market: Worth it! By: Ronsard-Novem N. Timan Adlin Joey Almencion Thesis Statement: This paper aims to discuss that although Investing in Stock Market is volatile, risky, and the maintenance is costly, it is a secondary of income, Highly Profitable and has a Long Term Benefits. Outline: 1.0 Introduction 2.0 Background 2.1 Stock 2.1.1 Types of Stocks 2.2 Stock Market 2.2.1 Purpose and Function of Stock Market 2.3 Philippine Stock Market 2.3.1 Brief History of the Philippine Stock Exchange 2.4 Income Bracket for Investment 2.5 Attitude of Filipinos on Investments 3.0 Advantages of Investing in Stock Market 3.1 Earn more Money 3.2 Long Term Growth Benefits 3.3 Highly Profitable 4.0 Disadvantages of Investing in Stock Market 4.2 Risky 4.3 Costly Maintenance 5.0 Refutation 6.0 Conclusion Investment can be considered as a Capital for each company to start their operations. Investment is not only limited to companies, but also for individuals. It is designed to be a source of income for those who have no interest in...
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...How to Find the Best Stocks Introduction Investing in the stock market can be a risky, but many times rewarding business. In order to ensure that you turn a profit, you need to invest in the right stocks. Finding the right stocks can be a challenge for those that are new to investing, but with some tips and advice, and a little knowledge, finding those lucrative stocks is made a whole lot easier. Before starting off, you need to understand your goals and how you are going to achieve them. In addition to formulating goals, you need to do some basic market research. Ask yourself questions like “What market am I going to invest in?” and “How much am I willing to risk?” Now that you have your basic goals and research completed, you need to get down to actual investing. Before you do this, you need to know which stocks you are going to be investing in. There are many tools online that can help you, such as Google Stocks, which helps you keep track of certain stocks to see which direction they are trending in. As general advice, the best stocks to invest in are those that have recently hit rock bottom, and are on their way back up. Investment Risk Profile Simply put, your investment risk profile is how “risky” you are as an investor. Most people think that the stock market is 100% safe and risk-free to invest in, but in reality people do lose money in the stock market, just look at how many lost money in the Great Depression. Determining your investment risk profile...
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...The Value Versus Growth Dilemma | 1. What is value investing? What is its rationale? What are GMO’s main arguments in favor of value investing? Value investing is a way of investing in company stocks that are considered either undervalued or out-of-favor by the market. In other word, a value investment is one where the intrinsic value of the stock is not accurately reflected in the current market valuation. The underlying reason of too much decreasing in the stock price is that the company may be losing market shares or even in trouble due to market’s panic attributed to negative rumors as well as having management problems. Since the market price has dramatically descended, the book to market ratio of that stock will conversely increase. Consequently, this fraction is an important indicator that value investors will look at in order to justify if a particular stock is value stock or not. The rationale for investing in such value stock is that after the forces that are depressing the stock have diminished, the market price of value stock can only go upward from the bottom position to realize the stock’s hidden potential value at some point in the future. Notably, the key assumption is that once the market finally acknowledges the inefficiency that the price is too low when compared to the expected future returns, it will bump up the price and the value investors will directly benefit from the capital gain on those value stocks. Basing on this ground and reinforced with stellar...
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...The Value Versus Growth Dilemma | 1. What is value investing? What is its rationale? What are GMO’s main arguments in favor of value investing? Value investing is a way of investing in company stocks that are considered either undervalued or out-of-favor by the market. In other word, a value investment is one where the intrinsic value of the stock is not accurately reflected in the current market valuation. The underlying reason of too much decreasing in the stock price is that the company may be losing market shares or even in trouble due to market’s panic attributed to negative rumors as well as having management problems. Since the market price has dramatically descended, the book to market ratio of that stock will conversely increase. Consequently, this fraction is an important indicator that value investors will look at in order to justify if a particular stock is value stock or not. The rationale for investing in such value stock is that after the forces that are depressing the stock have diminished, the market price of value stock can only go upward from the bottom position to realize the stock’s hidden potential value at some point in the future. Notably, the key assumption is that once the market finally acknowledges the inefficiency that the price is too low when compared to the expected future returns, it will bump up the price and the value investors will directly benefit from the capital gain on those value stocks. Basing on this ground and reinforced with stellar...
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...Value investing is the strategy of purchasing an asset which is trading at a significant discount from its determined intrinsic value. It has long been regarded as a low risk method of providing outstanding investment returns (Klarman 2001). The investment strategy was described by Benjamin Graham and David Dodd in their book, Security Analysis (1940, p. 724). Over subsequent decades the investment approach has evolved utilizing varying fundamental methodologies but always maintaining the principle of investing when a discount to intrinsic value exists. Graham and Dodd (1940, p. 368) referred to this principle as the 'margin of safety'. This essay will explore the various methodologies, expand on the 'margin of safety' concept and discover the factors that have led to the success of the exponents of value investing. Bierig’s (2000) assessment of the Graham and Dodd approach indicated that a value investor doesn’t just follow share market fads but instead ‘searches for stocks selling for less than their intrinsic value’ and after purchasing, waits for market recognition that corrects this discrepancy. Athanassakos (2011b) has illustrated that a search for undervalued stocks is the initial process undertaken. He maintains that these stocks tend to be ‘avoided by large institutional investors’ and are not the ‘glamour stocks everyone wants to own’. Graham (1973, p. 211) describes two methods of searching for fundamentally undervalued stocks; companies selling at a low price to...
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...Analysis of Value and Growth Investing Saint Leo University An Analysis of Value and Growth Investing This essay will define and identify the differences between value stocks and growth stocks. It will also explain the rationale that investors use for purchasing both value and growth stocks, and will identify whether value or growth investing has worked best over the long term. In addition this essay will provide incite as to which of the two investment methods I prefer and a justification for this preference and lastly will identify a recent example of someone who can be described as a value or growth investor and describe their successfulness with the method they chose. Value and Growth Stocks Defined According to our text, value stocks and market stocks are defined relative to their market-to-book ratios. A market-to-book ratio that well exceeds 1 indicates that the value of a firm’s assets exceeds their historical cost. As such, stocks with lower market-to-book ratios are classified as value stocks, while stocks with high market-to-book ratios are known as growth stocks (Berk, 2014, p. 28). When compared to stocks within a similar industry, value stocks may be lower priced and are considered more of a bargain, while growth stocks are more highly priced relative to those in their industry. Purchasing Value Stocks Versus Growth Stocks There are a variety of reasons that any investor might use to purchase a particular type of stock. Most of the reasoning has...
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...BUS320 April 23, 2014 The Little Book That Beats The Market The book entitled, the Little Book That Beats the Market, is essentially a beginner’s guide to investing. Author Joel Greenblatt begins the book by breaking down the stock market into the most basic form. His goal was to explain it in a way that could be understood and followed by all five of his children, ages 6 to 15. He begins by using an example of a sixth grade boy named Jason selling sticks of gum for 25 cents apiece. If each pack of gum has five pieces, Jason will be making $1.25 per pack. If Jason only paid 25 cents per pack, he will be making a profit of $1 per pack! Greenblatt takes this even further and estimates that if Jason sells 4 packs every school day (Monday through Friday), Jason will be making $20 a week. After doing further calculations, Greenblatt and his son figure out how much Jason could make if he sold 4 packs of gum every day until he graduated the 12th grade. By using this information, Greenblatt puts a value on Jason’s business and asks the reader how much they would pay for Jason’s business. He uses the idea of Jason’s business throughout the rest of the book. Every new concept that Greenblatt introduces, he comes back to Jason’s business and gives an example of how that concept could relate to Jason’s business. This gives the reader an easy understanding of how the different concepts that Greenblatt discusses affect certain businesses. Throughout the book, Joel Greenblatt...
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...information about the financial markets, only have historical information on the returns/risks of the different types of assets (ETFs), I would slowly enter to the market. I would draw a personal financial market roadmap to figure out my goals and risk tolerance and evaluate my comfort zone in taking risk. However, as I have 1 millions dollars (money paper) to invest, so I have intention to buy high beta stocks with high risk. In this case, I will choose the stock with beta above 1 (riskier than the market). Before you buy stock in a company, you need to do a little light – reading and doing research. Investing in stock without checking out the company beforehand is a recipe for disaster. In this case, I will do a research online like Yahoo Finance, MSN Money, Investor Guide and The Street to find the most volatile stocks with high risk and high return. Investing in volatile stocks is like riding a roller coaster. When the market is on a roll, taking on more risk in your portfolio can have big rewards, but you will have stomach to deal with potential losses. I chose to buy 2,000 shares of Netflix with a market price $91.84 and the beta is 1.32. Netflix is an amazing success story both in entertainment industry and stock investment. Within 3 years, the company stock price has been increasing from $20 a share to over $100 a shares. Investing in Netflix either I can get a lot of money return or lost a lot of money. I also research for most traded stock on Wall Street Survivor to...
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...recently wrote a position article on your firm's approach to investing for the small investor, titled "Investing Is for the Little Guy." The article now appears on your company's Web site. It has, interestingly enough, generated e-mail responses from potential clients, and your firm is asking you to address some of their questions for a Frequently Asked Questions (FAQ) segment that will be posted to the Web site soon. Specifically, some of the respondents have compared investing in the stock market as a no-win situation, and only the institutional investors can win. These respondents would like a response that further clarifies your firm's position regarding risk in light of these types of statements. Research stock market investments using your text, course materials, and Web resources. What disadvantages do small investors face when investing in the stock market? What advantages are presented to these small investors? Post a new topic to the Discussion Board that contains your answers to the above questions. Respond to 2 other students' posts on the Discussion Board that critiques their answers. I work for a large investment firm and recently wrote a position article on the firm's approach to investing for small investors. It has generated e-mail responses from potential clients and my firm is asking me to address some of their questions. Some of the respondents have compared investing in the stock market as a no-win situation. They would like a response that further...
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... DETERMINANTS IN INVESTING: Americans in the work field are faced with a lot of challenges when it comes to saving for retirement. You don’t want to be too cautious (relying on just treasury bills that have barely kept up with inflation the last 70 years being an extreme example.) You don’t want to put too much weight into your stocks making your portfolio too risky and possibly jeopardizing your earnings and prolonging your retirement date. Your ability and willingness to take risk directly relates to your expected returns. A lot of factors go into your ability to generate returns through mutual funds, stocks and bonds. [pic] Google images Your age also plays a role in how you will invest for your retirement. The older you are and the closer you are to retirement, your tolerance for risk in your portfolio will go down. When you are close to retirement, the last thing you can afford is losing your savings. If you are younger and are many years away from retirement you will be more inclined to put more weight into stocks because if the market takes a downturn you have more time to recover your losses. Whether you are employed or not determines your willingness to take risk in terms of your ability to replace financial losses that may occur with your active income. Also an often overlooked factor that comes with investing for retirement is your psychological ability to tolerate the stress of a serious downturn in the market. Getting...
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...Case Study Summary (SAUDI STOCK MARKET) The purpose of this article is to illustrate a simple and easy method to identify undervalued stocks in Saudi Stock Market to enable the investors for making well informed and conscious investment decisions. Actually, Investing is the act of committing money or capital to an endeavour with the expectation of obtaining an additional income or profit. True investing doesn't happen without some action on our part. A "real" investor does not simply throw his or her money at any random investment; he or she performs thorough analysis and commits capital only when there is a reasonable expectation of profit. Yes, there still is risk, and there are no guarantees, but investing is more than simply hoping Lady Luck is on our side. It is much the same with investing in equities but most of the Saudi investors ignored this basic principle of investment. This is evident from the volatility of the Saudi stock market during the past 12 months which witnessed high speculation, lack of direction, and overall confusion that led to the rise and fall of the Saudi stock market index (TASI) beyond justifiable levels. The aim of investing in equity is to get a healthy return by holding the stock for a longer duration. The return on a stock (dividends and price appreciation over the holding period) is tied to the future performance of the company. Further, an investor should know why he is buying or selling a particular stock and the timing of his buy-...
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...OUTLINE Capital Market Management I. Course Number: FM 6 Credit: 3 units II. Course Title: Capital Market Management Pre-Requisite: FM2, FM4 III. Course Description: This course focuses on Capital Market Theory, its efficiency and implications. It establishes its coherence with the rest of the financial institutions within the financial environment. The course also deals with the relationship of the financial market with the government and how the latter stands a powerful influential tool. The course likewise attempts to develop the analytical ability of the students through various financial case presentations. IV. Course Objectives: At the end of the course, the students should be able to: 1. Discuss the concepts of Capital Market Theory. 2. Explain the role of Participants in capital markets 3. Know the legal and regulatory framework affecting the development Capital Markets 4. Analyze the impact and implication of Capital Market in the financial environment. 5. Develop appropriate values like frugality and care in making investment 6. Examine the role of government explain how some economic activities affect the capital market. 7. Evaluate the relevance of Capital Market in today’s business society. V. Course Outline No. of Hours A. Overview of Financial Market 13.5 1. Why Study Financial Markets? 2. Classifications and Functions of Financial Markets 3. What...
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... | | | | |PART I | | | | | | |I |BASIC |4 - 7 | |II |STOCKS |8 - 11 | |IIII |INVESTORS |12 - 14 | |IV |INVESTING |15 - 21 | | | |...
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...Analysing the growth of the Bovespa index from 2004 onwards. Vincent van Werd - 319088 The Brazilian stock market has been growing steadily since 2004, as will later been shown in detail with illustrations. Which factors impeded growth before that period and which ones facilitated the growth as from 2004? Was the development of Bovespa due to regulatory changes or were other factors involved? Economic factors To determine the role of corporate law in the development of the stock market, I would like to take some other factors into account first. Perhaps we will find that the importance of other factors was much bigger than that of the corporate law. First of all let us illustrate the development of the stock market. In the graph below, the growth of the Bovespa index is being shown. This graph clearly shows the growth of the Bovespa index. Especially between the year 2003 and the first months of 2008 there has been a rapid growth. After a steep downward movement as of May 2008, the index quickly recovered back to the previous high level by January 2010. In the most recent years, the index has been more stable. Now that we have seen which growth exactly we are analysing, to continue I would like to illustrate some core economic figures, starting with the inflation rate. Brazil has a history with periods of hyperinflation, causing new currencies to be introduced every once in a while, only to get even higher inflation again. During the introduction of the Plano Real...
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...Macroeconomic aspects for defensive stock investing In the past decade, the stock market has had many ups and downs and private investors perceive stock investing more and more speculative and unpredictable. Part of this perception roots from the general trend towards computerized high frequency trading, which in 2010 accounted for up to 70 % of all trades made in the market. High frequency trading is done by mega computers which are programmed to take advantage of the slightest changes in the stock price by buying and selling within fractions of a second. Those programs pay no regard to the actual social and economic value of the company. Trends like that and criminal like actions by almost all major banks around the world (including inside trading, misinformation of customers, ruthless risk taking, etc. which lead to the worldwide economy crisis in 2008) leave private investors with the feeling that they get betrayed and can’t keep up with the rapid stock market. They might think that stocks are not a good investment tool for private investors anymore. However, statistics show that stocks measured over any ten-year time period for the last 75 years, have yielded a higher return than conservative investments in bonds or bank certificates of deposit (Kelly, 2007). For the mentioned and several other reasons, one still should consider using stocks as an investing tool. Consequently, if you can’t win the very short term, high frequency trading game, you might want to play a different...
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