What Is a Bond?

A bond is a fixed income instrument that represents a loan made by an investor to a borrower
(typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and
borrower that includes the details of the loan and its payments. Bonds are used by companies,
municipalities, states, and sovereign governments to finance projects and operations. Owners of bonds
are debtholders, or creditors, of the issuer. Bond details include the end date when the principal of the
loan is due to be paid to the bond owner and usually includes the terms for variable or fixed interest
payments made by the borrower.

2.
Most banks in the Philippines offer various fixed income products like Retail Treasury Bonds, T-Bills,
Fixed Rate Treasury Notes (FXTNs), Dollar Sovereign Bonds, and Dollar Corporate Bonds, among
others.

Some of the more popular banks known to offer bonds and other fixed-income products include:
• Security Bank
• BDO
• BPI
• Unionbank
• PNB
• Metrobank
• RCBC
• Landbank
• Bank of Commerce
• China Bank
• Development Bank of the Philippines (DBP)
• PB Com

4.
The Bureau of the Treasury (BTr) plans to offer starting next month so-called prize bonds
which will give small and individual investors an opportunity to win as much as P1 million in
cash winnings for as low as P500 in investments.
Lottery bonds are a type of government bond in which some randomly selected bonds within the
issue are redeemed at a higher value than the face value of the bond. Lottery bonds have been issued by
public authorities in Belgium, France, Ireland, Pakistan, Sweden, New Zealand, the UK and other
nations.
Outwardly, lottery bonds resemble ordinary fixed rate bonds; they have a fixed, though usually
long, duration and either pay no interest or regular coupons. The individual bonds within each issue are
numbered, like ordinary bonds, but the serial numbers serve a different function from ordinary bonds.
For a lottery bond the serial number is an added incentive for the purchaser to buy the bond.
Although the details vary by bond and by issuer, the principle remains the same. A drawing takes
place according to a schedule to decide which serial numbers are to be redeemed. The individual bonds
within the issue thus identified by the drawing are then bought back by the issuer, so that the total value
of an issue will decrease as time passes and more bonds are redeemed. A small number of bonds are
redeemed for an amount greater than their face value. Hence the holder of that particular bond will
have won the ‘lottery’. Lottery bonds are similar to prize-linked savings accounts.
To participate in the activity, an investor should have a bank account in selected banks like the
Development Bank of the Philippines, Land Bank of the Philippines, BDO Capital and Investment
Corp., China Bank Capital Corp. and First Metro Investment Corp., which are the identified selling
agents of Premyo Bonds.
5.
Yes because this will help in growing their savings and at the same time help the government
realize its projects in health and education, among others.
Prize Bonds are debt issued by the government wherein in addition to receiving regular interest
every quarter, bondholders will be eligible to join quarterly raffle draws in which they can win cash
prizes of up to P1 million.
6.
What is a stock?
A stock (also known as "shares" or "equity") is a type of security that signifies proportionate
ownership in the issuing corporation. This entitles the stockholder to that proportion of the
corporation's assets and earnings.
Stocks are bought and sold predominantly on stock exchanges, though there can be private sales as
well, and are the foundation of nearly every portfolio. These transactions have to conform to
government regulations which are meant to protect investors from fraudulent practices. Historically,
they have outperformed most other investments over the long run. These investments can be purchased
from most online stock brokers. Stock investment differs greatly from real estate investmen.
Corporations issue (sell) stock to raise funds to operate their businesses. The holder of stock (a
shareholder) has now bought a piece of the corporation and has a claim to a part of its assets and
earnings. In other words, a shareholder is now an owner of the issuing company. Ownership is
determined by the number of shares a person owns relative to the number of outstanding shares. For
example, if a company has 1,000 shares of stock outstanding and one person owns 100 shares, that
person would own and have claim to 10% of the company's assets and earnings.
7.
1. Decide how you want to invest in stocks
There are several ways to approach stock investing. Choose the option below that best represents how
you want to invest, and how hands-on you’d like to be in picking and choosing the stocks you invest in.
• “I’m the DIY type and am interested in choosing stocks and stock funds for myself.” Keep
reading; this article breaks down things hands-on investors need to know.
• “I know stocks can be a great investment, but I’d like someone to manage the process for
me.” You may be a good candidate for a robo-advisor, a service that offers low-cost investment
management. Virtually all of the major brokerage firms offer these services, which invest your
money for you based on your specific goals.
• Open an investing account

Generally speaking, to invest in stocks, you need an investment account. For the hands-on types, this
usually means a brokerage account. For those who would like a little help, opening an account through
a robo-advisor is a sensible option. We break down both processes below.

• Know the difference between stocks and stock mutual

funds
Going the DIY route? Don’t worry. Stock investing doesn’t have to be complicated. For most people,
stock market investing means choosing among these two investment types:
• Stock mutual funds or exchange-traded funds. These mutual funds let you purchase small
pieces of many different stocks in a single transaction. Index funds and ETFs are a kind of
mutual fund that track an index; for example, a Standard & Poor’s 500 fund replicates that
index by buying the stock of the companies in it. When you invest in a fund, you also own small
pieces of each of those companies. You can put several funds together to build a diversified
portfolio. Note that stock mutual funds are also sometimes called equity mutual funds.
• Individual stocks. If you’re after a specific company, you can buy a single share or a few
shares as a way to dip your toe into the stock-trading waters. Building a diversified portfolio out
of many individual stocks is possible, but it takes a significant investment.

• 4. Set a budget for your stock investment

New investors often have two questions in this step of the process:
1. How much money do I need to start investing in stocks? The amount of money you need to
buy an individual stock depends on how expensive the shares are. (Share prices can range from
just a few dollars to a few thousand dollars.) If you want mutual funds and have a small budget,
an exchange-traded fund (ETF) may be your best bet. Mutual funds often have minimums of
$1,000 or more, but ETFs trade like a stock, which means you purchase them for a share price
— in some cases, less than $100).
 2. How much money should I invest in stocks? If you’re investing through funds — have we
mentioned this is our preference? — you can allocate a fairly large portion of your portfolio
toward stock funds, especially if you have a long time horizon. A 30-year-old investing for
retirement might have 80% of his or her portfolio in stock funds; the rest would be in bond
funds. Individual stocks are another story. We’d recommend keeping these to 10% or less of
your investment portfolio.

• 5. Start investing
Stock investing is filled with intricate strategies and approaches, yet some of the most successful
investors have done little more than stick with the basics. That generally means using funds for the bulk
of your portfolio — Warren Buffett has famously said a low-cost S&P 500 index fund is the best
investment most Americans can make — and choosing individual stocks only if you believe in the
company’s potential for long-term growth.

To make money investing in stocks, stay invested

More time equals more opportunity for your investments to go up. The best companies tend to increase
their profits over time, and investors reward these greater earnings with a higher stock price. That
higher price translates into a return for investors who own the stock.
More time in the market also allows you to collect dividends, if the company pays them. If you’re
trading in and out of the market on a daily, weekly or monthly basis, you can kiss those dividends
goodbye because you likely won’t own the stock at the critical points on the calendar to capture the
payouts.
If that’s not convincing, consider this. Over the 15 years through 2017, the market returned 9.9%
annually to those who remained fully invested, according to Putnam Investments. However:
• If you missed just the 10 best days in that period, your annual return dropped to 5%.
• If you missed the 20 best days, your annual return dropped to 2%.
• If you missed the 30 best days, you actually lost money (-0.4% annually).

What Is an IPO?
An initial public offering (IPO) refers to the process of offering shares of a private corporation to the
public in a new stock issuance. Public share issuance allows a company to raise capital from public
investors. The transition from a private to a public company can be an important time for private
investors to fully realize gains from their investment as it typically includes share premiums for current
private investors. Meanwhile, it also allows public investors to participate in the offering.
A company planning an IPO will typically select an underwriter or underwriters. They will also choose
an exchange in which the shares will be issued and subsequently traded publicly.

9
The PSE bring together companies which aim to raise capital through the issue of new securities.
Through the listing of their share in the stock exchange, companies can have easier access to funds.
Raising new capital through an additional public offering is easier and less expensive when the
company is already listed in the Exchange. Therefore, the PSE plays a vital role in the financing of
productive enterprises that use the funds for growth and expansion of new jobs. It is therefore essential
to the growth of the Philippine economy.

Furthermore, the PSE facilitates the selling and buying of the issued stocks and warrants. It provides a
suitable market for the trading of securities to individuals and organizations seeking to invest their
saving or excess funds through the purchase of securities.

Apart from these functions, the PSE has committed itself to (a) protecting the interest of the investing
public; and (b) developing and maintaining an efficient, fair, orderly and transparent market.

Efficient This means that orders are executed and transactions are settled in the fastest possible way.
Some reforms have been instituted or are being carried out by the PSE to make the market more
efficient, such as:
· installation of fully automated trading system;
· installation of computer trading terminals in cities outside Metro Manila to
encourage the entry of provincial investors; and creation of a central cleaning
and depository system to mobilized stock certificates and allow transfer of shares
and funds by book entry.

Fair This means that the PSE assures that no investor will have an undue advantage over another
,market player in trading by manipulating prices and engaging into insider trading. Insider trading is the
act of buying or selling a particular stock based on certain privileged information which is not available
to the public. As such it is considered as illegal and prohibited by the PSE.

Market Transparency Transparency proceeds from the assumption that the investor can only make
informed and intelligent information about the particular sock he wants to buy. The PSE requires listed
companies to disclose timely, complete and accurate material information to the Exchange and the
public on a regular basis. Such information would include stock price information, corporate conditions
and developments which tend to affect stock prices like dividend, mergers and joint ventures, and the
like.