Investing in Stocks: A Guide for Filipinos

“You should invest in stocks”. That’s what most financial gurus will say. But for someone living in the Philippines, that’s easier said than done.

Though there were already online trading platforms available for Filipinos as early as the 2000s, the technology and information were not “there” yet. Hence, the older generations including Millenials were not into stock investing.

That said, I think we can all agree that investing in stocks is one way to build wealth. Whether you’re saving for retirement, making a down payment on a house, or just looking to increase your net worth, stocks offer the potential for high returns.

Why Invest in Stocks?

High Returns

Stocks are a great investment option because they offer the potential for high returns over the long term. Stocks tend to outperform all other asset classes in terms of return.

From its inception in 1987 up to the end of 2021, the PSEi delivered an average annual return of approximately 9.2%. Over the past decade (2012-2021), the PSEi had an average annual return of around 6.7%.

On the other hand, from its inception in 1926 through the end of 2021, the S&P 500 (stock market index that tracks the performance of 500 large-cap publicly traded companies in the United States) has delivered an average annual return of approximately 10%. Over the past decade (2012-2021), the S&P 500 had an average annual return of around 13.6%.

Income

Investing in stocks allows you the opportunity to participate in the growth of companies you believe in, and to share in their profits through dividends.

Diversification

Another benefit of investing in stocks is that they offer a way to diversify your portfolio. By investing in a variety of stocks across different industries and sectors, you can spread your risk and potentially minimize losses in the event of a market downturn.

How do you get into stock investing?

It’s good to know about the benefits of investing in stocks, but how do you actually invest? That is actually the dilemma of most people.

Thankfully, gone are the days wherein you need to go to an actual stockbroker in order for you to buy or sell stocks. Nowadays, you can buy and sell stocks directly. There are several popular trading platforms in the Philippines that allow individuals to buy and sell stocks. Here are some of them:

For the Philippine Stock Market

For the US Stock Market

eToro
Saxo Markets
Interactive Brokers
Shari-Shari – the first Philippine company that provides the ability to purchase US stocks

Personally, I only have accounts with BPI Trade, eToro, and Shari-Shari. And though I have an account with Shari-Shari, I currently just use eToro to invest in the US stock market. The main reason for this is due to the wait time for approval from Shari-Shari before I can start investing. During the time I was waiting for approval from Shari-Shari, I signed up for eToro and automatically got approved.

As for BPI Trade, aside from the fact that I didn’t sign up for any of the other available platforms, convenience is the reason why my first choice was BPI Trade. Since I have other accounts with BPI, it’s the easiest option in terms of funding and withdrawing from the trading platform.

For information on how to create accounts with BPI Trade and eToro, here are my published articles: