It's the process of "forgoing the reward today for a better reward tomorrow". In financial terms, it means not using or spending your money today to make it grow and get bigger value in the future. A lot of investment vehicles are available to cater to specific needs of different people.

Savings is a good way in keeping money safe and risk free. It doesn't grow or decrease in value but, if placed in a bank account, earns a little interest annually on a fixed rate. It is also called demand deposit as one can withdraw or get the money anytime if needed. On the other hand, investing is a good way of growing your money but would involve risk. Investment in stocks or equities can increase or decrease in value depending on micro and macro economic factors. In fixed rate Bonds, it can earn much bigger interest but exposes itself to risk of default and lock- in period. Time horizon is very critical in this field as it spells the difference between earnings and losses.

There are many investments available in the market. It can be in small businesses, real estate and financial products. The financial world has a myriad of products available for both rich, middle class, and poor. Let me show the most common types:

If an individual invests in the stock market, he essentially acquires part-ownership of the company he invested in by being a stockholder. Stockholders are allowed several benefits by the company such as dividends declared, voting rights, and portion of the remaining assets of the company if it is liquidated. Aside from such benefits mentioned above, it is also very possible for the individual to utilize the stock market as a means of generating income through capital appreciation and dividends declared.

The stock market is a venue for individuals to have a portion of ownership in established large corporations/ businesses. Mediated by stockbrokers, it allows for easy facilitation of buying and selling equities transactions for investors. Companies can be listed in the exchange through an IPO. In effect, they raise funds, sell personal equity in the company and share a good part of their profit as it welcomes minor shareholders.

To be able to buy stocks, one must first open an account with an authorized stockbroker. They are the only ones directly involved in the transactions of securities A list of more than 150 brokers is provided in the PSE website. . Creating an account is quite a simple procedure and once done you may begin buying or selling stocks through the services offered by the brokerage firm. There are roughly 250 public companies listed in the stock exchange, all of which you can trade during weekdays from 9:30 a.m to 12:10 p.m. All of these trades would be done at the trading floor of the PSE, but orders can be done through a simple phone call to your broker.

An individual could make money from the stock market by buying shares and selling them at a higher price as compared to the cost, the profit resulting from the transaction is called "capital gains". A shareholder may also benefit from cash or stock dividends provided by a company. Stock rights also offers opportunities by allowing you to buy additional stocks at prices lower than what the market is currently offering them for, however there is always the risk presented by such offerings of pulling stock prices down because of dilution.

The investor would lose money in the stock market if he sold his shares at a price lower than the cost. However, the person must also realize that any true loss of money would only occur after he has actually sold the stock for a lesser price. Otherwise, if he/she chooses to continue to hold ownership of the stock, such losses are only considered paper losses. If the stock price eventually appreciates due to favourable economic conditions and good business operations, it can rebound to surpass the initial cost and turn the potential loss into gain.

There will always be risks involved in every type of investment. Stock market prices are exposed to external factors like global and local economic growth, interest rates, government monetary policy, and commodity prices affect the market. Consequently, internal factors like market sectors, business performance, financial health, growth potential and market liquidity vary for each company and should be given serious considerations. While the stock market is one of the more volatile type of investment, one cannot deny the potential gains it presents that overshadows the risks associated with it. Thus it is recommended that the individual investor first assess the amount of risk, gains, and losses he is willing to take. Make sure that capital allocation is properly considered, be it conservative or aggressive, and be certain to adhere to the plan.

An investor always investigates first before buying a stock. One should first look at the whole economy and find which sector (property, financial, mining etc.) have the best potential for growth. Then among the listed companies, one can look at their financial statements to gauge how the business is doing. There are a lot of factors to look at but the most commonly used are the PE ratio, price to book value, fair value and recent developments in the company.

The best time to invest for an individual is when he is ready. That is, if he/she has extra money that is not used for basic expenses and won't be needed for a period of time. The longer the term it is available, the better, as it allows one to ride the growth of the company and not be exposed market price volatility and market sentiment. Whether on a bear or bull market, it presents an opportunity to make money and better returns as compared to other asset classes.

It is also important to note than an individual should take time to assess his financial standing, age, return objective, and experience to find out if it is the best time to invest for him. It is never too early to start. Take it from the best investor of this time, Mr. Warren Buffet "I made my first investment when I was 11. Until then, I was wasting my life".

In order to avail of a company's shares, one must first satisfy the minimum number of shares needed to be purchased for that particular stock. This fixed minimum amount is called a board lot. The stated amount of shares listed in a company's board lot however, increases or decreases depending on the current price range of that company. For example, should an individual wish to invest in a company with a price range of 50 cents to p4.99, the minimum amount (board lot) require for purchase and stock-ownership would be 1000 shares.

A stock certificate is given to investors where you can find the name of the owner, the company, and how much shares he or she has. Technological advancements today however allows individuals to have their ownership in "street certificate" where the stockbroker credits all the person's purchase into his account and makes it available anytime during the trading hours. A statement of account is sent regularly to the client on a monthly basis.

Fundamental analysis is the term used in looking at financial statements and deriving ratios, price to earnings, price to book value, ROE and dividend yield. Based on these numbers, one can choose the best company and estimate, or at least, have an idea of how the stock price will perform in the next few months or years. It would also help to compare these numbers to its peers in the industry to gauge how it plays in the field. Corporate disclosures and recent stories or developments should also be considered and an up-to-date view of the company, and somehow foresee its direction.

On the other hand, another way of analyzing a stock is by technical analysis. This method is gaining popularity as more and more people use price charts to follow trends in determining the direction of a stock. Historical price charts help the technician decide to buy or sell, on the basis that history repeats itself. As a basic rule on corporate stories and disclosures, price discounts everything.

a. Composite Index
b. Sector Index
c. Market Capitalization

Market performance is gauged by the PSEi. It shows the public the overall condition of the market. The PSEi is the main index of the Exchange and is computed as an average price of 30 companies that follow a certain criteria, usually the biggest corporations in the country. The market is said to be up or down based on the movement of the index compared to the previous trading day. The index level is expressed in points and one should take a closer look on the percentage gain than just the mere number.

There are also sector indices that tell whether a certain sector is up or down for that particular moment. The 6 sectors namely the property, mining & oil, financial, industrial, service and holding firms represent the index for stocks in the same line of business. Usually, companies in an index move in one direction and any one that diverges should be reviewed as it may present a new story, development, and consequently better investment opportunity.

Each listed company in the PSE is valued in terms of 'Market Capitalization'. Said to be the company's total worth if to be bought, it is simply multiplying the outstanding shares to the current market price. Institutional and big foreign investors use this to choose their investments as not to expose themselves on illiquidity risk.

Blue Chips are companies with a familiar status for quality, reliability and the ability to operate profitably in good times and bad. The PSEi is the set of 30 companies that are considered Blue Chips.

The 'best stocks' to invest all depends on the type of investor you are. Certain stocks may or may not be dependent on the investing objectives and investing values that an individual possesses. Consult with your stockbroker on a possible portfolio best fit for your investment needs.

Your broker can help determine which are the 'best stocks' to invest in. Your broker will be able to guide you in picking the stocks. The partnership between you and your broker should be able to aid your financial success through careful planning and portfolio management. Constant communication with your broker is a must, as an investor to key decisions throughout your investing in the stock market. Make sure to find a reputable broker that can provide you with the best experience and excellent service with utmost integrity.

Your stock holdings can be easily sold in the market at any moment during trading hours. Just give the instructions to your broker, and he will execute that order as promptly as he can. Proceeds from the sale can be withdrawn from the stockbroker 3 days after the transaction.

Anyone of legal age can invest in the stock market. People who appreciate the importance of putting their money in an earning asset should be able to find the stock market as the investment of choice. The stock market directly translates the earnings to the shareholders of the company.