INVESTING

CHAPTER 5
 in d e r s

Re m

or e yo u
bef t

sta r Investing takes risk

e st in g
inv Investing takes time
Investing takes knowledge
 INFLATION and

why it matters?

Inflation is the loss of your money's purchasing power.

It is a hurdle every investor must keep in mind.

How to beat

Inflation:
EARN MORE
SPEND LESS
INVEST WISER
 es n ot h a v e

o m p a n y d o
- The c n d / o r s e ll

e t o o f f e r a
licen s C .
r o m t h e S E

e d Fla gs o f
se cu r it ie s f
" n o r is k " a n d

5 R - Y ou ' re p r o m is e d

In ve stm e n t
"high re t u r n s " .
a n -You d on ' t k n o w w h a t y o u 'r e

Scam of the best ways to

inve s t in g
o c
in
u
.
s is on r ec r u it m en t ,

Inves tin g is on e -The f d u c t .

ure. o n t h e p r o
secu re yo u r f in ancial fut and not to s p e n d

e 's p r e ss u r e
-The r
y r i g h t n o w .
mo n e
 ERSIFICATION
DIV
Diversification is a risk-

management technique that mixes

1. by asset class
a wide variety of investments

within portfolio which strives to

2. by time frame
smooth out unsystematic risk
3. by risk
events in a portfolio so that the

positive performance of some 4. by liquidity

investments will neutralize the

negative performance of others.

 r I n v e s t me
o u n t
y S
g
in

tr
1. What are your investment objectives?
at

at
2. What is your time frame?
Cr e

eg
3. What is the size of your fund for investing?

y
4. What is your risk appetite?
5. What is your knowledge in investments and

investing?
Stock

Investing
WHAT IS A STOCK?

A stock is a share in the

ownership of a company, meaning

if you own a stock of a company,

you are part-owner of that

company.
 How do you

EARN in stock?
PRICE APPRECIATION - You buy a share then sell
it at a price higher than when you bought it.
DIVIDENDS - Portions of the company's profit
that are shared with their stockholders as a
benefit of being part-owners of the company..
How do you Start?

1. Study and LEARN

everything you can

2. Find a BROKER
3. Open an ACCOUNT
STOCK MARKET TERMS
BUY - buy shares of a company
SELL - disposing the shares you already purchased to
either take profits or cut losses
BID - what you're willing to pay for a stock
ASK - what people selling stocks are looking to get for
their shares
BLUE CHIP STOCKS - stocks of the best and the biggest
companies
INVESTOR - people who invest their money with the
expectation of gaining returns long term
STOCK MARKET TERMS
TRADER - people who buy and sell stock to earn from
price growth over shorter timeframe
BULL MARKET - markey condition where stock prices are
expected to go up
BEAR MARKET - market condition where stock prices are
expected to fall
FUNDAMENTAL ANALYSIS - evaluates the economic
factors affecting the intrinsic value of a traded company
TECHNICAL ANALYSIS - uses past data to predict future
price movements in the market
 OOLED FUNDS
P
1. MUTUAL FUNDS - pool

money collected from

POOLED FUNDS - are

investors to invest in

investments which allow

securities such as stocks,

many people to pool

bonds, money market

together their money to be

instruments, and other

handled by an investment
assets, and are operated by

manager. professional fund managers.

 OOLED FUNDS
P 2. UNIT INVESTMENT TRUST

FUNDS - an open-ended

POOLED FUNDS - are

pooled trust fund

investments which allow

denominated in pesos or any

many people to pool

acceptable currency, which is

together their money to be

operated and administered by

handled by an investment
a trust entity and made

manager. available by participation.

Who is Marvin

Germo?
One of the country's leading

stock market investing

enthusiasts. He has authored

several books under the stock

smarts series.
 Marvin Germo's Top

5 Stock Market

Investing Tips

1. Put as much as you can in the stock market now.

Invest the greatest amount whe you are at the

prime working years of your life.

2. Store Cash
3. Only buy a company that are GOOD growing and

are undervalued
 Marvin Germo's Top

5 Stock Market

Investing Tips

4. Only put money you don't plan to touch for a long

time.
5. If you are trading, never speculate. Technical

analysis wins.
 Ba sic

n o m ic

Eco
t s yo u

Fa c w
The Foundation of

u ld k n o Economics is the "The

sho Law of Supply and

Demand"
Microeconomics &

Macroeconomics
 Ba sic

n o m ic

Eco
t s yo u

Fa c w
u ld k n o Gross Domestic Product or

sho GDP
Interest Rates
Business or Economic Cycle
The Law of Supply and Demand

Whenever supply of something increases its

price decreases and whenever demand

increases, price increases and the reverse.

Microeconomics & Macroeconomics

MICROECONOMICS

studies individuals and firm's behavior,

incentives, pricing, margins, etc. which helps

in deciding allocation of scarce resources.

Microeconomics & Macroeconomics

MACROECONOMICS

studies how the aggregate economy

behaves.
 Gross Domestic Product

GDP

This is the basic measure of the size of an

economy. It is the broad measurement of a

country's overall economic activity - the

leader of the indicators.

 Interest Rates

When you lend money to someone, you expect

to get some form of extra payment and that

is essentially what interest is.

Business or Economic Cycle

The start of the cycle is recovery, followed

by expansion, then by decline (or

contraction) and finally by recession which

is a period of negative growth.

REAL ESTATE

INVESTING
It is also called property
IN G
RE NT
investing, is using property
I NG
& SE LL
to generate income. IN G
BUY TING
IN V ES
T E RM
LONG
 RENTING

It is the act of leasing of property to

someone else for a fee.

 BUYING &

SELLING

It is also called flipping, is the quick, faster

version of long term property investing.

 LONG TERM

INVESTING

It is when you buy property, let it sit and

appreciate in value, and then sell it for a

profit.
 b e r 's g a m e
1. It' s a n u m
2. Lo ca t io n
w to S p o t a

Ho 3 . Fo r ec l o se d

G o od R e al
Prop e r t ie s
cia l

ta te D e al in
4. Sea rc h i n g o n so
E s or le ad s
P h ilip p in e s med i a f
the
 l is tin g si te s
5. C o n su lt

r ti e s b e at
r o p e
w to S p o t a
6 .Sh o u ld p
on ?
Ho the ir p r im e c o n d it i

G o od R e al
7. E a r l y b i rd s g e t t h e

ta te D e al in
bes t d e a ls
E s r e s ea r c h
P h ilip p in e s 8 . D o y o u
the
Thanks!
see you in the next class!