Short and long term stock purchasing

Philippines
October 21, 2010 10:36pm CST
I am actually planning to get the service of an online stock broker, Citiseconline (Philippine owned company) for a minimum of Php 25,000 (USD550). I have been reading and researching a lot from forums to grasp some of the information that I need to take note like cost-averaging etc. But I got lost with the trading and long term investment part. I am not a money greed so I am fine with long-term investments where you just earn small dividends but will gain more as you hold on to it for a long period. But I really have not grasped everything yet. Can someone enlighten me on how these two work? How to know if the stocks are overvalued or not? Thanks in advance
4 responses
@msdivkar (1903)
• India
22 Oct 10
Hi mhy_pie, Good morning to you. It is a good decision you have taken to invest in the stock market and the best decision is you have decided to invest on long term basis. Your investments on long term basis in stock market always give you good returns, which you can't think of in any other mode of investment. You can make long term investment when you get enough spare money which you don't require for your day to day needs. When you are a short term investor you may not gain much or you may even loose depending upon the market condition at that time. As about selecting the stock for long term investment you must first select the stock exchange where you want to invest then go through the stocks listed on that stock. As a long term investor You should always opt for blue chip stocks, the stocks of well known companies. You can get all financial details of those companies in the stock market database. You can view their 52 week high and low rates and as far as possible select those companies which are near about their 52 week low rate to give you maximum returns. You should sell them when they reach their 52 week high rates. when you are invested you should always keep track of those stocks.
• Philippines
22 Oct 10
That makes sense. So for long-term, all I have to do is put the money into a blue chip stocks, sit and wait until it yields and/or lose year per year right?. Does short-term have a different lists of stocks and vice versa for long term? I guess I need to buy a book to enrich my stock market knowledge.
@msdivkar (1903)
• India
22 Oct 10
I advise you to buy small amount of stock to start with and monitor the movement of your stock closely. It is not that you purchase the stock and forget about it although some people do exactly that way. There is what is called as stop loss in the stock market. That is the rate at which you allow your stock to drift downwards you will not like to loose further. You sell your stock at that rate. To understand all these things you have got to study the stock market. If you buy some small amount initially that will be your best teacher.
• China
23 Oct 10
yes, i think so . it is a so short but long term for stock purchase. i don't know stock so much. but i often want to do the stock. because it could help us to get more money if we are fortunate. but always most of people lost their money . but in my opinion . long term stock is good to me if i do it . good luck.
• Philippines
23 Oct 10
Well as I understand, those who lose too much are more on the short/trading side. They stay close on the market day by day to be able to buy/sell stocks to make profit which is a different thing when it comes to long term stock purchasing. You buy companies at a very low price that you think can will stay in 10 years time as it grow despite its highs and lows. Those are what I have read but of course, these are like definition of terms and there's more to it that I need to understand.
@serubhai1 (204)
• India
22 Oct 10
Hi mhy_pie03, You can know if stocks are overvalued or undervalued by the EPS(earning per share) and its trading price. What I used to do whwn I was a beginner was I used to go to the monthly losers list, find out some companies, which are usually known well, and buy stocks of that (small qty 10-15). The logic is that these companies equity will rise up (99% chance) so even if it rises only by 2% in a month, you are in a profit. It takes time and experience to be a stock market player. And, never start trading in futures or options initially, play with midcaps and IPO's. Now its recession time, its ideal to buy shares of engg bluechips like GE, Siemens, TATA etc.
• Philippines
23 Oct 10
Thanks for sharing. I now slowly digesting some of the things you guys have been sharing. And yes, 2% is still a profit but later on it would grow more as time goes by. But I think I'd stay close with those company here in my country since I am a newbie.
• Philippines
14 Mar 12
Hi there mhy_pie, I have plans to invest in the stock market also. But I will start from little amount because I don't have that much money. I have friends and have known quite a few who have earned from their. So why not give it a try?