The one and only certainty about stocks

Now that you know what are stocks, you might still be thinking that stocks are risky and you shouldn't put money in there.

You are right and wrong at the same time.

In order to answer your doubts, I must differentiate between short term and long term.

Short term:

Short term for me is 10 years or less. Indeed, there is a chance that the valuation of your stock portfolio will show low return or negative return. For example, you invest all your money in stocks and just after you did, there's a market correction. Meaning that all the stock prices went down. Of course, you'll feel bad because what your shares worth is less than what you paid for.

BUT

Long term:

In the long term, meaning 10 years or more. The valuation of your stocks will always be more than what you bought them for.

Let's see the following graph that shows the performance of the Philippine stocks since 1986:

Let's talk about stocks!

Some people are either afraid or excited about stocks for different reasons. Some think stocks are evil and will help you lose all your money. Some others think it's like playing in casinos and you have a chance to win big time...

Those people who see stocks as a huge gambling machine cannot be more wrong.

I'll tell you what a stock is and it's very simple to understand: a stock is a share of a company.