Tips to Learn Contentment

Tips to Learn Contentment

posted Oct 30, 2011 9:37 AM by Rendy Eligio   [ updated Oct 30, 2011 9:44 AM ] 
 
1) Savoring

Savoring is a term from the study of positive psychology.  or some of us, it takes work and the recognition that if we aren’t stopping to savor we are missing out on the actual reality of our lives. In some cases it may take an understanding of what those ‘good things’ are for each of us. Perhaps that’s one of the places where the ‘meaning’ branch of Seligman’s positive subjective experience intersects with the ‘pleasure’ branch

We can learn to savor.  One of the strengths of positive psychology, according to Peterson and Seligman's Classification of Character Strengths and Virtues, is the strength of "appreciation of beauty and excellence"  There are ways we can learn to savor or mindfully engage in thoughts or behaviors that heighten the effect of positive events on positive feelings.  According to author Fred Bryant, there are 3 forms of savoring:

a) Anticipatory -- getting excited while preparing for the experience, imagining what the experience will be like b) In the Moment -- be fully present, use all your senses to be here and now.  Notice how things feel physically, use your eyes to fully see everything around you, smell the smells, hear the sounds, breathe deeply. 3) Reminiscent-- this is the act of remembering, with gratitude, a pleasant experience.  For example, I have an app on my iPhone (called Live Happy) in which I can take pictures during pleasant experiences (these moments include a date with my wife, going to the dog show with my son, or an afternoon out with my daughter, and even moments alone after a run at night).

2) Do Less Each Day

Use Pareto's Principle to pare down your To Do list to only the most important things.  For example, if you have 15 items on your daily To-Do list, use the 20/80 rule: 80% of your effectiveness will come from 20% of your activities.  So multiply your To Do list by 20%, and you'll need to shorten your To Do List down to the Big Three most important things to get done that day.  Repeat the same process the next day.  By having only 3 things to accomplish, you can be more relaxed while working on those three items.

3) Tame Your Negative Thoughts and Emotions

This suggestion comes from Oprah.Com.  It is suggested that you take allow yourself only 9 minutes each day to complain, whine, and vent.  Break your 'negativity' time into three breaks of three minutes apiece.  By freeing your time up from negative thoughts and emotions, you will be giving your subconscious and conscious mind time to focus on positive solutions.  If you don't believe me, read a former post of mine called "Warning!  Worrying May Be Good For Your Career!"

4) Cultivate Your Gratitude

Gratitude is commanded in the Bible over and over. But it's not a chore: it's a privilege!  Our Creator knows how we are made! Gratitude is to contentment what electricity is to a light bulb. Without gratitude, it's going to be awfully hard to cultivate the virtue of appreciation of who we are and what we have.

I suggest that you work on a gratitude list: Each night before going to bed, ask yourself, "What am I grateful for today?"

5) Take a 20 minute vacation

Each day for one week, plan and participate in a daily vacation, a 20-minute or more period devoted to doing something you enjoy.

a. Avoid distractions during your vacation.
b. Notice how you feel and what you enjoy.
c. At the end of your vacation intentionally plan the next day's vacation and anticipate it.
d. At the end of the day look back on your vacation and savor it.
e. At the end of the week recall all seven vacations and the positive feelings of them.

How to Read Stock Quotes

The stock market is very volatile, which can be very intimidating to a novice investor. That is why investors must always monitor or keep track of their investments, which means being able to read or interpret the daily stock quotes—a list of prices of stocks at one point within the trading day.

In the past, stocks were quoted in fractions, but now, most exchanges use decimals. Stock quotes are updated regularly during the trading day. Based on these numbers, investors can make decisions on whether to buy or sell, or hold the stocks.
Stock quotes and charts are often found in the financial section of a newspaper, financial magazine or online. These charts provide details on the trends and stock prices of companies that trade stocks in the public trading markets, and the chart is organized in a standardized format of ten (10) columns for easy reading. Here is how to read the basic stock quotes:
NAME

The name of the listed company.

 SYMBOL

A unique alphabetic name which identifies the stocks of a listed company. Go to Stock Symbol Lookup

BID                   

The highest price that a buyer is willing and able to purchase for a share of stock at a particular time, also called the “buyer’s price”.

 ASK

The lowest price that a seller is willing and able to offer for sale for a share of stock, also called the “seller’s price". OPEN

The opening price of the stock for the day.
HIGH

The highest traded price of a stock during a specific trading period.

 LOW

The lowest traded price of a stock during a specific trading period.


CLOSE

The closing price of the trading day CHANGE OF DIRECTION

Comes in the form of a triangle or arrow head pointing either up or down, which indicates whether the stock is trading higher or lower than the previous day’s closing price.  The colors of the stock ticker symbols indicate the trading trends.Sometimes, the change of direction is indicated by plus or minus symbols. In this case, plus equates to up and minus equates to down.

 VOLUME

The total number of shares traded during a given period of time.

 VALUE

The amount of transactions in peso terms traded on a particular period. This indicates how much money is turned over from the trading of stocks.

The Board Lot Table

How much is the minimum amount of investment?
Trading of stocks is done by board lot or round lot system. The Board Lot Table determines the minimum number of shares one can purchase or sell at a specific price range. Therefore, the minimum amount needed to invest in stocks varies and will depend on the market price of the security as well as its corresponding board lot.
Prices of stocks move through a scale of set price fluctuations. Prices are thus adjusted along these fluctuations at a time. Transactions which are beyond the prescribed number of maximum fluctuations from the last sale price are not allowed.

PRICE		TICK SIZE	LOT SIZE
From	To
0.0001	0.0099	0.0001	1,000,000
0.0100	0.0490	0.0010	100,000
0.0500	0.2490	0.0010	10,000
0.2500	0.4950	0.0050	10,000
0.5000	4.9900	0.0100	1,000
5.0000	9.9900	0.0100	100
10.0000	19.9800	0.0200	100
20.0000	49.9500	0.0500	100
50.0000	99.9500	0.0500	10
100.0000	199.9000	0.1000	10
200.0000	499.8000	0.2000	10
500.0000	999.5000	0.5000	10
1000.0000	1999.0000	1.0000	5
2000.0000	4998.0000	2.0000	5
5000.0000	UP	5.0000	5

Types of Stock Trading Orders

What are the different types of stock trading orders?

All stock trades consist of at least two orders—one buy and one sell order—usually with one order to enter the trade, and one or more orders to exit the trade.
A single order is either a buy order or a sell order. An order can be used either to enter a trade or to exit a trade. If a trade is entered with a buy order, then it will be exited with a sell order, and vice versa. For example, if a trader expected the market's price to go up, the simplest trade would consist of one buy order to enter the trade, and one sell order to exit the trade. Conversely, if a trader expected the market's price to go down, the simplest trade would consist of one sell order to enter the trade, and one buy order to exit the trade.
Traders have access to many different types of orders according to price and validity, which they can use in various combinations to execute their clients’ trades. With this, a stockbroker’s commission may depend on which type of order an investor prefers to take.
The following explanations will explain each of the order types, and how these orders are used in stock trading.

ORDER TYPES (according to price)

1.    Market Order
Market Order is the buying or selling of stocks without a specified price, or immediately at the prevailing market price when the order is executed, whatever the price may be.
Market order is the simplest and quickest way to get your order   completed. It is often subject to the lowest commission since this is the easiest to execute.
For example, if stock ABC’s current market price is Php2,500.00 per share, the investor should be willing to buy or sell at this price level. Although being practiced in some other markets, this type of order is rarely used in the local equities market.

2.    Limit Order
   
Limit Order is entered with a specified price known as the limit price. This allows investors to buy or sell at their desired buying or selling price levels.
The primary difference between a market order and a limit order is that the stockbroker cannot guarantee that the former will be executed at a specific price.
For example, stock ABC’s current market price is Php2,500.00 per share. If the investor thinks that this price level is too expensive, he may post a lower bid or buying price of Php2,450.00 per share. This means that his order will only be matched if stock ABC’s market price reaches Php2,450.00 per share or if when there are available sellers at Php2,450.00 per share.

3.    Market on Opening/Closing Order
   
Market on Opening/Closing Order is accepted only during pre-open and pre-close periods and executed at the opening/closing price of the instrument.

4.    Market-to-Limit Order
   
Market-to-Limit Order is an order entered for immediate execution at the best price with whatever volume available and remaining quantity will be queued as a limit order.

5.    Stop Order (Stop Loss/Stop Limit)
   
Stop Orders are triggered when a specified price limit is reached. It becomes a market order as soon as its trigger price limit is reached. There are two (2) kinds of stop orders:

a.    Stop Loss Order
A Stop Loss Order stays inactive and is not displayed in the market until a trade occurs at the order’s trigger price. It is immediately treated as a Market Order when the order is triggered. It specifies only the trigger price.

b.    Stop Limit Order
A Stop Limit Order is the same as the stop loss order wherein it also stays inactive and is not displayed to the market until a trade occurs at the order’s trigger price. Instead of specifying only one price, a stop limit order specifies two prices: the trigger price and the limit price, which must exceed the limit price.

ORDER VALIDITY TYPES (according to time/validity)

a.    Day Order (DAY)
Day Order is valid until the end of the trading day only. If the investor’s buying or selling order is not matched during the day, this will automatically be cancelled and will have to be reposted by/for the investor on the next trading day.

b.    Good Till Cancelled (GTC)
Good Till Cancelled is valid until cancelled by the investor or trader or until it has reached the set expiration date of the security.

c.    Good Till Date (GTD)
Another most frequently used limit order is the Good Till Date which is valid until the date specified by the investor.

d.    Good Till Week (GTW)
Good Till Week is a type of limit order which is valid for seven (7) calendar days. If unmatched within seven (7) calendar days, the buy or sell order will automatically be cancelled and will have to be reposted by the investor though his trader or through his online trading account.

e.    Sliding Validity (SLIDING)
Sliding Validity Order is valid for 360 calendar days from the time it is posted.

f.    Fill-and-Kill (FAK)
The Fill-and-Kill (FAK) Order, also referred to as ‘Execute-and-Eliminate Order’, is valid upon execution. Fill-and-Kill orders require the stockbroker to instantly execute a trade at the quoted market price. If the stockbroker is not capable of doing so, the order is immediately discarded.

VOLUME QUALIFIERS

The following volume qualifiers to the Order types are accepted by the Trading System:

a.    Minimum-Quantity Order
Minimum-Quantity Orders must be executed immediately to the extent of the specified minimum quantity, with any remaining unexecuted portion being added to the Order book, and shall only apply to Limit or Market-to-Limit Order.

b.    Iceberg Order
Iceberg Orders, also referred to as “disclosed quantity orders”, are orders which are successively entered in the Central Order Book, and disclosed to the market at specified tranches. Disclosed quantity shall not be less than the specified percentage set by the Exchange.

How can I post a buy or sell order?

How can I post a buy or sell order?

Placing an order to buy or sell stocks to your stockbroker can be done in three ways: over the phone (call or text message), online, and face-to-face (walk-in).

•    Over the phone (call or text message)
The most traditional way to post a buy or sell order is by making a telephone call to your stockbroker and get firsthand advice from him.
You may also post orders through text messaging, which may be arranged with a trader of a full service stockbrokerage house. Note that there are certain risks involved including the possibility of your order not being received on time and accurately, or not being received at all by the trader.

•    Online
Investors with online trading accounts post their buy or sell order via the Internet using the online trading platform of an online stockbroker. With a few simple clicks, you may buy or sell stocks without the need to speak to your stockbroker. Online trading allows faster posting of orders and settlement at a lower commission rate. 

•    Face-to-face (walk-in)
Some stockbrokers have their own investors’ trading lounges where you can monitor

How Do You Make Your Money Grow in Stocks

There are two ways to make your money grow in the stock market:

1. Through an increase in stock price or capital appreciation
Capital appreciation is an increase in the market price of your stock.  It is the difference between the amount you paid when buying shares and the current market price of the stock. However, if the company does not perform as expected, the stock price may go down below your purchase price.

You cannot really earn from stock price appreciation unless you sell your shares. Otherwise it is only a book value gain, which means it is not yet converted to cash, and current price may change depending on market forces.
For example, if you buy a share of stock at Php100.00, and it rises to Php110.00, your capital appreciation or gain is Php10.00.  Keep in mind that you only realize your gain of Php10.00 minus applicable charges, if you sell at Php110.00.  If you choose to hold it and it further increases to Php150.00, your capital gain would be Php50.00. However, if your stock decreases to Php100.00, and you decide to sell it at that price, then your capital gain is zero.

2. Through dividends declared by the company
Dividends are paid out to shareholders, representing earnings of the company that are not going to be reinvested in their business.  There are two types of dividends: cash and stock dividends.

A cash dividend represents earnings declared by the company for every share of stock. So, if the company declares a dividend of 25 centavos per share, a stockholder with 10,000 shares will receive a cash dividend of (Php2,500.00 minus tax of 10% for individual Filipino investors)(Php0.25 x 10,000) in cash.

Stock dividends are additional shares given to shareholders at no cost. If the company declares a 25 percent stock dividend, a stockholder with 10,000 shares will be entitled to an additional 2,500 shares of stock.  These shares can be sold anytime after the shares have been issued.

How to invest in STOCKS?

Getting started in the stock market is a simple process. 

1.    Choose your STOCKBROKER.
At present, there are more than a hundred stockbrokerage companies to choose from.   
When you choose a stockbroker, you need to consider the type of service you will require and who will best suit your needs. You should remember that your stockbroker is your financial agent that will help you make your invested money grow. Stockbrokers are also classified as traditional or online based on the services that they offer.
Traditional brokers are those who assign a licensed salesman to handle your account and take your orders via written instruction or through a phone call.  Online brokers, on the other hand, are those whose main interface with their customer is through the Internet. 
The full listing of stockbrokers is available in the PSE website http://www.pse.com.ph/.
  
2.    Open a TRADING ACCOUNT with your chosen stockbroker.
The next step is to formally open a trading account. Similar to the process in opening a bank account, representatives of the chosen stockbrokerage company will require you to fill out a Customer Account Information Form or CAIF.  Accomplish this along with the other requirements such as:
o    Two (2) valid IDs;
o    Specimen signature cards, and;
o    Proof of billing.

3.    Discuss with your stockbroker the stocks you wish to BUY or SELL.
After opening a trading account, you can now start discussing with your stockbroker the stocks you wish to buy (or sell).

4.    Give ORDERS to the stockbrokers.
Placing an order to buy or sell a stock can be done by making a telephone call or sending an SMS to your stockbroker. Orders can also be placed directly online via the Internet.

5.    Get the CONFIRMATION RECEIPT.
Once your order has been carried out, your stockbroker will give you a confirmation invoice showing the details of your transaction. 

6.    Deliver/Pay before SETTLEMENT DATE.
The delivery or payment should be before the settlement date.  For traditional stockbrokers, settlement of transactions is usually done after three (3) working days from the transaction or T+3.  For online stockbrokers, settlement of all transactions is done on the transaction date. 

7.    Receive PAYMENT.

Investor Protection

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Investor Protection
Category: Beginner Posted on: July 17, 2011 by: pseacademy_administrator Comments: 0 Attachments: 0
As a regulator, how does the PSE protect the rights of the investing public?

The PSE and Securities and Exchange Commission (SEC) have put in place several safeguards that promote transparent, fair, and organized buying and selling of stocks where every investor, big or small alike, are protected from fraud, manipulative trading practices, and erring stockbrokers. 

Some of the investor protection initiatives of the PSE are, but are not limited to the following:
1.    Self-Regulatory Organization Status (SRO) as granted by the SEC in June 1998. As such, the PSE acts as the ‘police’ of the stock market and it is  the SRO status that empowers it to formulate marketplace rules, and impose penalties or sanctions to market participants who will not comply with these rules.

2.    Customer First Policy
The PSE regularly monitors and audits the operations of stockbrokers. It ensures that business and trading practices of stockbrokers conform with the laws stipulated in the Securities Regulation Code of the Philippines, including the Customer First Policy, whereby stockbrokers’ orders must always surrender priority to their clients. 

3.    Risk Based Capital Adequacy
The Risk Based Capital Adequacy is a PSE regulation which ensures that stockbrokers have enough capital to cover its exposure to risks. It also ensures that stockbrokers are financially sound or liquid enough to promptly settle claims and other obligations to clients.

4.    Disclosure Rules
Since timely and reliable company disclosures are essential components of a fair and efficient market, the PSE also sees to it that listed companies promptly disclose factual and truthful information only.
a.    10-Minute Rule
The PSE requires that material information that which may affect a listed company’s share price positively or negatively, are disclosed within 10 minutes after its occurrence.
b.    Selective Disclosure Rule
Disclosures must also be done first to the PSE so that it will cascade information to every investor and general public through its communication channels and not to a selected group of individuals only.
c.    Online Disclosure System
All disclosures are transmitted through a sophisticated computer system known as the PSE Online Disclosure System or ODiSy. Non-compliance or violations of listed companies to PSE Disclosure Rules are heavily penalized with fines, suspension, or even delisting from the PSE.

5.    Advanced Warning and Control System (AWACS)
To further enhance investor confidence, the PSE monitors the local stock market through a world-class and sophisticated surveillance system called the Advanced Warning and Control System (AWACS).
AWACS is equipped with the critical elements of surveillance process and provides a robust monitoring and warning mechanism. It monitors and detects unusual stock price or volume movements possibly brought about by insider trading and other manipulative trading practices.

6.    Market Integrity Board
The PSE created an independent body known as the Market Integrity Board that oversees stockbrokers’ compliance with the rules governing market transactions. This Board also oversees the Market Regulation Department and is different from the PSE Board and reports directly to SEC.

7.    Securities Investor Protection Fund (SIPF)
Another tool created for the protection of investors is the Securities Investors Protection Fund, Inc. or SIPF. The SIPF, which is comparable to the Philippine Deposit Insurance Corp. providing insurance for bank deposits, seeks to build and enhance investors’ confidence in the market and is envisioned to protect the investing public from extraordinary losses, other than the ordinary market fluctuations, arising as a result of fraud, failure of business, or judicial insolvency of PSE-accredited stockbrokers.
Protection to investors is automatic upon the opening of an account with a PSE-accredited stockbroker and given by way of compensation for trade-related obligations of stockbrokers to its customers.
These safeguards, along with other investor protection initiatives of the PSE, serve to protect the health of the equities market and the integrity of capital formation process, making investing in the Philippine stock market secure.
The PSE continues to perform its functions and duties under the law in ensuring that the market operates in an orderly, efficient, and transparent manner, and that investors are properly protected.

Personal Equity Retirement Account (PERA)

Q.     What is a PERA?
A.     A Personal Equity and Retirement Account, popularly known as PERA, is a long-term voluntary   retirement account that encourages individuals to save and plan for their retirement while enjoying the tax incentives both from the amount contributed to the PERA and the income from PERA investments.

Q.   When was PERA signed into law?
A.  The PERA Act of 2008 was signed into law on August 22, 2008 and tax incentives became effective on January 1, 2009.

Q.     Is PERA similar to the 401 (k) Plan (401K) and Individual Retirement Account (IRA) of the United States?
A.     Yes. Similar to what is known in the US as the 401K and IRA, PERA provides alternative investment opportunities for all.

Q.      Why should I open a PERA (account)?
A.       Simply because,

•    Your annual contribution—if within the maximum limit and kept in PERA until age 55—will be entitled to a 5% income tax credit, in other words, if you max out your contribution to P100,000, you get to deduct P5,000 from your annual taxable income.
•    All income earned from your investments and reinvestments upon reaching   retirement or death are tax exempt.
•    Unlike your regular contributions to the GSIS and SSS, you will have full control over your PERA—make all the investment decisions, choose where your money goes, and grow it faster.
•    Life is too short to stop dreaming of a comfortable and hassle-free retirement.

Q.   What if I am already 55 years old or older, can I still open an account?
A.     Yes, you can still open an account even if you are already 55 years or older. However, the tax benefits kick in only if you have contributed in your PERA for 5 years.

Q.   How much can I contribute to PERA?
A.     Per year, you can contribute a maximum of P 100,000 if living in the Philippines, and P 200,000 if living and working overseas. Married couples can contribute a maximum of P 200,000 or P 400,000 for those living and working overseas, respectively.

Q.     What if I want to put in more than the prescribed maximum annual PERA contribution?
A.     You may contribute an amount exceeding the prescribed maximum annual contribution but the excess will no longer be entitled to the 5% tax credit.
Q.    Who can open a PERA?
A.     An individual who is employed or self-employed, of legal age, in the country or overseas, earning an income, and with a Philippine Tax Identification Number (TIN) can open a PERA. A person who opens an account is called a contributor.

Q.     What if I am below eighteen (18) years old, can I still open an account?
A.     Yes. Individuals below 18 years old may open an account through a guardian.

Q.   How do I start investing in a PERA?
A. First, you need to get an administrator who will oversee your account. Your administrator can be a securities broker, bank, mutual fund company, insurance company, or any other financial-related institution accredited by the Bureau of Internal Revenue (BIR). You can only have one (1) administrator for all your PERAs.

Once you have assigned an administrator, you may now choose a custodian who will receive the funds you contribute. Your custodian could be an investment manager or a trust entity accredited by the Bankgo Sentral ng Pilipinas (BSP). The custodian will   operate independently from the administrator.

With the guidance of an administrator and a custodian, the contributor may now choose which PERA investment product to invest in.

Q.     What are the available PERA investments products I can choose from?
A.     You may invest in the following investment products:
•    Shares of stock and other securities listed and traded in the local exchange
•    Unit investment trust fund (equity funds, balanced funds & others)
•    Mutual fund (equity funds, balanced funds & others)
•    Annuity contract
•    Insurance pension products
•    Pre-need pension plan
•    Exchange traded bonds
•    Others (for more details, see PERA Act of 2008 Implementing Rules and Regulations)

Just remember to choose wisely and put your money where it will have higher potential earnings.
Q. How many investment products will I be allowed to invest in?
A.     You can open a maximum of five (5) PERAs with one administrator at any given time. This allows you to explore and to experience different investment products where you can best grow your retirement funds.

Q.     When can I withdraw my PERA contributions?
A. You are entitled to receive distributions from your PERA when you reach the age of fifty five (55) or when you have already made contributions to your PERA for at least five (5) years.
Q.    Will I be penalized in case I withdraw my contributions prior to my retirement?
A. Yes. In case you withdraw before the period of distribution, you will have to pay a penalty to the government which shall not be less than the tax incentives enjoyed.

You will ONLY be allowed an early withdrawal without a penalty if distributions will be made for payments to a contributor hospitalized for more than thirty (30) days, and if rendered permanently totally disabled.
Q.  How will payments be made?
A.  You may choose to be paid either in lump sum or pension for a definite period or for a lifetime.

Q.  After I have withdrawn my contributions at fifty five (55), what will happen to my PERA?
A. You may choose to continue your PERA even beyond the age of fifty five (55), but your complete contributions will be given upon and after your death.

Q.  What will happen to my PERA if I die before the age of fifty five (55)?
A.     If you die before reaching fifty five (55) or any other age for that matter, your administrator will terminate your account and all your contributions will go to your heirs (lawful beneficiaries) without going into probate (a legal process that typically delays the release of money).
Q.     Will my employer be required to contribute to my PERA?
A. Your employer will not be required to contribute to your PERA, but they are encouraged in order to enhance employee benefit packages on top of the SSS and GSIS contributions. Employers’ PERA contributions will be deducted from their taxable income. 
   
    Even if your employer contributes to your PERA, you still have sole control over all your PERA assets.

Q. If an employer contributes to the PERA of its employees, does that exempt the employer from SSS and GSIS contributions and retirement pay under the Labor Code of the Philippines?
A.     No, employers are still required to comply with the mandatory SSS and GSIS contributions and retirement pay under the Philippine Labor Code.

Q.     Is PERA transferable?
A.     No, it is non-transferable. PERA cannot be used to secure indebtedness, therefore, creditors cannot run after PERA assets, and courts cannot attach, garnish or seize those to enforce a court judgment.

Investor Rights

All investors must be fully aware of their basic legal rights as articulated in existing laws, rules, and regulations issued by the government entities and the Exchange.


The PSE has been promoting shareholder activism to encourage shareholders to exercise their rights connected with their investment transactions. Outline below is a summary of such rights. It covers the different phases of investment and includes pre-investment phase up to termination of the investment.
It is important to note that the rights presented in this section are simply a collation from relevant legal issuances. The basis for any liability in connection with investment transactions shall still be the specific law, rule, and regulation.


1. RIGHT TO FAIR AND EQUAL TREATMENT
Every inventor should be given fair and equal treatment in terms of opportunities in terms of opportunities offers and access to information.
2. RIGHT TO FULL, ACCURATE, AND TIMELY INFORMATION
Every investor should be given complete, accurate and timely information to allow them to make informed decisions about their investments.
3.  RIGHT TO VOTE AND EXERCISE RELATED RIGHTS
Every investor should be given the right to participate in the management of the business by voting on important decisions such as who should be the directors and what major activities the business should undertake.
4. RIGHT TO HAVE FULL ACCESS TO FUNDS IN THE ACCOUNT 
Every investor should be allowed to exercise rights of absolute ownership over his account and may be subjected to limitations only with express consent.
5. RIGHT TO EXPECT THE BOARD, MANAGEMENT, BROKERS, AND AGENTS TO PERFORM THEIR FUNCTIONS RESPONSIBLY
Every investor can expect the Board, management, brokers and agents to perform their duties and responsibilities in accordance with a corporate culture of integrity, honesty and compliance with the spirit as well as the letter of the law.
6. RIGHT TO RELY ON THE COMPLETENESS, ACCURACY, AND TRUTHFULNESS OF ACCOUNTING AND FINANCIAL STATEMENTS
Every investor should be able to rely on completeness, accuracy, reliability, relevance, and timeliness of accounting and financial statements as certified by independent auditors.
7. RIGHT OF RECOURSE IN CASE OF DISPUTES CONCERNING THE ACCOUNT
Every investor has the right to know that in case a problem arises concerning his/her account, he/she has access to officers, managers, and agents of brokerage firms and receive prompt attention.
8.  RIGHT TO FAIR SECURITIES MARKETS WHERE TRADES ARE EXECUTED AT THE BEST POSSIBLE PRICE
Every investor should be able to rely that stocks traded in the stock exchange is reflective of how the market values the company.
9. RIGHT TO EXPECT THAT THE REGULATORY BODIES ARE EXERCISING SUPERVISION OVER THE INDUSTRY
Every investor should be able to rely on these institutions, their functions and duties under the law in ensuring that the market operates in an orderly, efficient, and transparent manner and that investors are adequately protected.
10. RIGHT TO KNOW DIVIDEND POLICY, TO RECEIVE DIVIDENDS, AND TO ENJOY OTHER BENEFITS DUE TO STOCKHOLDERS
Every investor should have a share of the profits of the company and enjoy other benefits as part-owner of the company.

Please visit the PSE website (http://www.pse.com.ph/) for a full discussion on the Investor’s Rights.

Types of STOCKS

 Stocks are classified according to types and classes, depending on the characteristics and earnings potential.

According to RIGHTS
a.    Common stock – It is a security usually purchased for participation in the profits and control of   ownership and management of the company. A common stockholder exercises control through voting rights during annual or special stockholders’ meetings, but can only claim rights to the company’s assets and earnings when preferred shareholders are already paid in full. 
Most of the issues traded in the local stock market are common stocks.
Common stocks are also known as “ordinary shares.”
b.    Preferred stock – It is a security whereby the holder has a higher claim on the assets and earnings of the company.
In terms of dividend payment and liquidation, preferred shareholders have priority over common shareholders. Though preferred stockholders do not have voting rights, they are entitled toreceive dividends before any dividends are paid to the common stockholders.
Preferred stocks usually have a specified limited rate of return or dividend and a specified limited redemption and liquidation price.
Preferred stocks are also known as “preference shares.”

According to OWNERSHIP
Common shares may further be classified into:
a.    Class A – These are stocks that can be exclusively traded by Filipino investors.
b.    Class B – These are stocks that can be bought and sold by both Filipino and foreign investors.
Both classes have the same privilege and receive the same amount of dividends. Such classification of common shares is done to monitor the equity ownership of both local and foreign investors.

According to SECTORS
Stocks listed and traded on the PSE are classified into six (6) sectors:
1.    Financials Sector – includes companies engaged in banking, investments, and finance.
2.    Industrial Sector – includes companies involved in the following:
        a.    Electricity, Energy, Power, and Water
        b.    Food, Beverage, and Tobacco
        c.    Construction, Infrastructure, and Allied Services
        d.    Chemicals
        e.    Diversified Industrials
3.    Holding Firms Sector – includes companies or firms that control or manage partial or complete interest in another company or other companies. Usually, these companies do not produce goods or services itself; rather, its purpose is to own shares of other companies.
4.    Property Sector – includes companies involved in land and property development
5.    Services Sector – includes companies involved in the following:
        a.    Media
        b.    Telecommunications
        c.    Information Technology
        d.    Transportation Services
        e.    Hotel and Leisure
         f.    Education
        g.    Diversified Services
6.    Mining and Oil Sector – includes companies engaged in mineral extraction, oil exploration, extraction and production

According to CHARACTERISTICS
Though there is no formal definition or criteria to classify a stock according to its characteristics, analysts generally describe stocks as:
a.  Blue Chip stocks – are shares of well-established and financially sound   companies that have demonstrated their ability to pay dividends in both good and bad times.  They also exhibit more modest but dependable returns and are relatively of lower risk.
b.  Income stocks – are shares of those companies with good dividend payment history due to steady profits.  Since they are stable, income stocks generally have a lower level of volatility.

c.  Growth stocks – also called “glamour stocks”, are shares of corporations whose earnings are expected to grow at an above-average rate relative to the market. A growth stock does not usually issue dividends as earnings are reinvested in capital projects. 
d.   Defensive stocks – are shares that provide regular dividends and stable earnings, regardless of the overall condition of the stock market. Defensive stocks remain stable under difficult economic conditions.  Generally, these are stocks of food, oil, and utilities companies, which are characterized by steady demand amidst hard times. 
e.   Cyclical stocks – are those sensitive to business conditions or cycles strongly tied with the economy’s performance.  These companies produce or offer services that are low in demand during slowdown and increase when business peaks.
f.   Speculative stocks – are those that rise quickly when economic growth is strong and falls rapidly when growth is slowing down. A speculative stock is considered very risky because of its volatility.  It increases or decreases rapidly depending on the economic conditions.

What are STOCKS?

Stocks are shares of ownership in a company. When you buy stocks of a publicly listed company, you become a stockholder or shareholder of a company. In other words, you become a part-owner of that company.
As a part-owner, you participate in the company’s growth and future profits. Conversely, you may also lose if the company suffers a loss or performs below market expectations.
The number of stocks you acquire will determine how big or small your ownership is. As you acquire more stocks, your ownership stake in the company becomes greater.

Other terms for stocks are “shares” or “equities”.
In Filipino, stocks are called “sapi”, which means to “join” or to “partake”.