Presents

Investing in the Stock Market Today

Presented by:
Juan G. Barredo
Vice President
CitisecOnline.com Inc.
Introduction
Wealth Building through
Stock Market Investment
How to Pick Good Stocks
Fundamental Analysis
Methods of Investing
Peso Cost Averaging
Technical Analysis
Getting Started with
Online Trading
Outline
Established in 1999, CitisecOnline (COL)
is the leading innovator in online stock
trading in the Philippines
Management team is composed of
professionals in the financial and IT
industries
Driven by our core competency in
research, investor education and
technology
Capitalized at over half a Billion Pesos
and a Member of PSE & HKE
COL publicly listed in the PSE in 06
COL: About us
Wealth Building through Stock
Market Investment
Part One
Retirement
Children/
Education
Dream
House
I start working for money to
build my nest egg
However my goal is for money to
one day work for me
I need to secure my future!
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Interest Rates (91-day T-Bill)
Why Invest?
Is the gradual acquisition and
safekeeping of wealth
Rewards: Low
Risk: Very Low (only Inflation)
Savings
Provides the avenue for
wealth to grow more
meaningfully
Rewards: High
Risks: Low to Very High
Investments
The Stock Market
The stock market is the place where you
can invest in other peoples publicly listed
companies.
A company sells shares of stock through
an Initial Public Offering (IPO) to raise
capital to grow their business
You invest into a company to participate in
its growth through: a) Price Appreciation
b)Dividends
What is it?
What Stock Markets Offer
Capital Appreciation the ability for a stocks price to increase in
value as driven by business prospects
Dividends company returns wealth back to shareholders
(distributes some profits either through cash or added shares)
Cash Dividend
Money given back to the
investor as his share of
distributed profits
Ex. A Cash div of
20/share: if I had 1000
shares, I would get P200.
Stock price will adjust by
dividend value
This is taxed at 10%
Stock Dividend
Additional shares given to
the shareholder
Ex. Stock div of 20%: if I
had 1000 shares, I would
get an 200 additional
shares
Share price will adjust
down by: price / 1.2
Choice to cash in is yours
Dividend Dates
Ex-Date the cut off point for
dividend entitlement is a day
before this date (you must be a
shareholder as of the day
previous to this date)
Date Payable the day when
the dividend is given to
shareholder (usually a month
after the Ex-date)
History has proven that
investing in quality stocks
can provide greater
returns than most
instruments; giving a good
run over inflation
What Stock Markets Offer
Part Two
How to Pick Good Stocks
the real value to which a stock can be said to be worth, it is
commonly stated as Fair Value or Target Price
studied through Fundamental Analysis
Actual Value
that value determined by market forces (demand and supply),
and is also commonly known as the Market Price
reviewed through Technical Analysis
Market Value
Task # 1: Know Prices
Ticker
Tape
Task # 2: Know some Fundamentals
Is a technique that attempts to determine a securitys
value by focusing on underlying factors that affect a
companys actual business and its future prospects.

We buy quality stocks today for what we believe it will

be worth tomorrow!
Fundamental Analysis
Remember: What you dont know you dont touch!
Task # 3: Do a Top Down Review
A technique that attempts to determine a companys
value by focusing on underlying factors that affect its
business, earnings and prospects
Is the Economy growing?
Are there enough investments and potential moving in
on these sectors? Money must be moving in, not out
What Industry seems attractive?
Pick out the top performing stocks in terms of valuation,
earnings growth, prospects and market participation
What are the best Stocks in that industry ?
2005 2006 2007 2008 2009
GDP 5.10% 5.50% 7.10% 3.80% 0.9%
T-Bills (IRates) 6.4% 4.89% 3.4% 5.40% 4.2%
Inflation 6.9% 5.0% 2.8% 9.3% 3.4%
Forex (P-$) 53.06 49.13 41.40 47.50 46.40
Turnaround Growth Maturing Consolidating
Earnings and
performance
stabilizes
Profits and
business
opportunity
rise attractively
Profits and
business
opportunity
slowor are
capped
Profits and
business
opportunity
deteriorate or
lose
Economic View
Industry View
Task # 3: Do a Top Down Review
Invest Here
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Banks Non-Performing Loans % (NPL)
Industry : Banks
Task # 3: Do a Top Down Review
Industry : Property
Task # 4: Know a Companys Prospects
Look for companies that show:
The Ability to Grow Earnings = Look for strong
or increasing profitability; watch earnings per
share (EPS= income / # of shares)
Good or Cheap Valuations = Look for good
stocks whose Market Value is notably lower
or discounted to its Actual (Fair) Value
Good Story = Look for new buzz, solid
products/services or catalysts for growth
Company Analysis
PROFITS
Task # 5: Choose the Best
Company Analysis
Stock ABC P5.25 Stock XYZ P1.16
2005 2006 2007 2005 2006 2007
Recurring
Earnings (Bil) 3.00 3.45 4.24 1.15 1.60 1.84
(Growth) 7% 15% 23% 43% 39% 15%
EPS 0.28 0.32 0.39 0.11 0.124* 0.125*
(EPS Growth) 21% 14% 22% 22.2% 13% 0.5%
Proj. Fair Value 07 P16.50 (214%) P2.10 (81%)
* Sold new shares (dilution)
Task # 5: Choose the Best
Company Analysis
A
B
C
X
Y
Z
5.25
1.16
6.23
(19%)
1.27
(9.0%)
8.54
(37%)
1.53
(20%)
SUMMARY
Positive impact to price:
1. Growth in Income/Value
2. Prospective Story for business
expansion
3. Potential Buyout
4. Worthy Dividends
Negative impact to price:
1. Slowing Growth or a loss
2. No Story, no dividends, no
nothing
3. Too much debt
4. Inefficiency / poor relative
performance
Part Three
Methods of Investing
How to Invest in Stocks
Popular Techniques
A Gradual Buy and Hold
Strategy
Make steady and fixed
Peso investments through
time on good companies
Peso Cost
Averaging
Trading through Technical
Analysis
Time market swings to
provide short term entry
and exit strategies
Market
Timing
Method #1: Cost Averaging
What is Peso Cost Averaging?
Peso Cost Averaging is a personal
wealth-building strategy that
involves investing a fixed amount
of money at regular intervals over
a long period
Buying stocks over time reduces
volatility risk in the market
Invest what you can at your own
pace
Method #1: Cost Averaging
How it works
Month 1
Buy P5,000 worth of
stock ABC at market
price
Month 2
Buy P5,000 worth of
stock ABC at market
price
Month 3
Buy P5,000 worth of
stock ABC at market
price
Buy fewer shares when prices are higher
Buy more shares when prices are lower
6
5
4
3
Ave Cost
P5,000 will buy
less shares here
P5,000 will buy
more shares here
Method #1: Cost Averaging
How it works
Month 1
Buy P5,000 worth of
stock ABC at market
price
Month 2
Buy P5,000 worth of
stock ABC at market
price
Month 3
Buy P5,000 worth of
stock ABC at market
price
6
5
4
3
1 2 3 4 5 6 7 8 9
Month
Ave Cost per Share
You get buy
more shares
when prices
are low, less
when prices
are high!
Method #1: Cost Averaging
Peso Cost Averaging down the road
Share price history from 1990 to 2007
Stock/
Indicator
Effective
Annual Yield
Time
Frame
TEL 18.88% 18 yrs
BPI 16.92% 18 yrs
AC 11.16% 18 yrs
JFC 10.7% 14 yrs
Inflation 5.7% 18 yrs
Retire with an Extra 10 Million!
Invest Monthly Php5,000
# Years 21
Return Rate 16.9%
Total Investment (P) 1,260,000
Will result in a
Future Value (P) Php10M+
Investment Gain 740%
Method #2: Market Timing
Technical Analysis
Technical Analysis is the study of
market action (or market price) by
reviewing price charts for the
purpose of forecasting future price
trends.
Aim: Watch and Follow market
direction
Technique: Buy into Up Trends;
Sell into Down Trends thereby
limiting risk
Price
Action
Study
Charts
Spot
Trends
Ayala Land Inc (1990-2008)
Method #2: Market Timing
How to Read Graphs and Trends?
Stock: A B
3 Trends:
Up Trends higher lows and higher
highs tracked by an up trendline
Down Trends lower highs and lower
lows tracked by a down trendline
Consolidations sideways shifts
Method #2: Market Timing
Markets swing in Cycles: BULL and BEAR
Part Four
Getting Started with
Online Trading
In the Palm of your Hands
Direct execution and Off Hours Order
Placement
Live quotes and market statistics
Live portfolio monitoring
Research studies and Seminars
Charting tools
24/7 online service
Customer Service
Best commission rates
Getting Started
CitisecOnline provides:
In the Palm of your Hands
Investing made easy
For the Busybody, No
need to time markets
Allow us to help pick
good stocks
Take advantage of
technology
ALI, TEL, SMPH, BPI, JFC, MWC
Research
COL EIP
Open an
Account
Fill up application
form
Provide 1- valid copy
of a Govt issued ID
Provide copy of billing
statement (for non-
personal appearance)
Fund account:
COL EIP - P5,000
Trading - P25,000
Summary
What have we Learned?
1. The Building of Wealth
2. The Stock Market Option
3. Understanding Price
4. Choose Fundamentally Good
Stocks
5. Cost Averaging or Time Markets
through Technical Analysis
6. Power up with Online Trading
Knowledge born from actual experience
is the answer to why one profits; lack of it
is the reason one loses
- Gerald M. Loeb
Thank you and have
great day!
To learn more about our COL Easy Investment Program or know
more about our services and seminars please visit our website at
www.citiseconline.com
For inquiries: call our customer hotline at 6-333-777 or email us at
helpdesk@citiseconline.com