EQUITY , STOCKS and the STOCK MARKET

Equity - is simply ownership of a corporation

Stock- ownership units in a corporation

Market - is a mechanism that bring together buyers and sellers to aid in the transfer of goods and services

Stock market - the market for various equity securities such as stocks and warrants


In essence, when you buy stocks in the Philippine Stock Exchange, you are buying part ownership in the company. Notice, the stock market listings in the business pages of the newspapers, they are companies you are somehow familiar with. We come across the names of companies like PLDT, GLOBE, MERALCO, JOLLIBEE etc everyday.

The stock that you buy is only as good as the company that issued them. The Key is to know what company you are buying into.


How to earn in the Stock Market

Dividends: Cash or Stock

Capital Appreciation

When a company makes money, and is efficient in controlling its expenses, they make profits. And a shareholder, your share comes in the form of dividends. The bigger the profits, the bigger the dividends (though each company formulates its own dividend policy).

When investing in the stock market with the objective of getting returns by Capital Appreciation (the increase in stock prices as they are traded in the stock market); it is important to keep in mind that just like in any other market; the Equities market is governed by the "LAW of SUPPLY and DEMAND". When Demands exceeds supply, the prices go up; and when supply overwhelms demand, prices tend to go down.
What factors affect the demand and supply? Thats what we try to find out.

****Dominant market players in an industry and Companies that delivers profit consistently are sought after and much more in demand especially by foreign investors. Hence, most of them are expensive or priced higher.
They are the blue chip companies.