How to get started with stocks - part 2

Now that you have opened your COL Financial account, it's time to buy stocks.

The difficult part is to choose what you will buy.

I advise that you diversify your portfolio into 5 stocks that belongs to 5 different industry.

Here are some industry examples:

- Banking
- Food
- Real Estate
- Utilities
- Technology
- Mining
- Retail
- etc...

Here are the guidelines on how to choose a good stock:

1. The company has to sell something that we need. Bank, food, housing, water, fuel, etc...





2. The company has to have good past records. In the beginning, avoid companies that are known to have had problems in the past.

3. The company must sell something that you understand. If you don't understand the product, most likely you don't use it and don't need it.

4. The company must be stable. Usually, the bigger the company, the more stable it is.

5. Don't choose a company that is obsolete. Internet has changed many businesses. For instance, physical books might be obsolete soon since we can buy books online for our ipad. An other example is a fixed telephone that can easily be replaced by a cell phone.

Once you chose 5 industries, let's try to find stocks to buy.

Let's say you choose to buy a bank company. First you should choose a bank that you know. If you are happy with the bank you are using right now, you should consider buying that stock. COL Financial has a tool to advise which stocks are good to buy. After you log in in the website, click on Research, then Investment Guide. Decide which stocks with a BUY rating you want to buy.

Do the same with other industries you want to buy from.

Next step is to decide how much you can spend on a stock. I advise you buy for at least 5,000 PHP per transaction. Less than 5,000 is possible but some stocks have a minimum. It depends of each case. 

If you can afford 5,000 a month, buy one company per month for 5 months. The succeeding purchases should be made from the same companies you bought before. You must focus on those 5 stocks even if the stock price goes down.

Please refer on this article on why you should buy the same stocks over and over again: http://pinoyfinancialcoach.blogspot.com/2014/05/the-stock-winning-strategy.html