Group 1

STOCKS
GOOD AFTERNOON! :)
Group 1
Vince Abrio
Kimberly Buban
Kassandra Cabas
Liecel Landicho
Nathalie Matula
Zyrelyne Medina
Maridel Panaligan
Maryzen Saldivar
Mary Salundagit
 “The real key to making money in stocks
is not to get scared out of them.”

S
STOCK -Peter Lynch
 What is Stocks?

● A stock or share (equity) is a financial instrument that represents an

ownership in a company and represents a proportionate claim on
its assets and earnings.

● Stock ownership indicates that the shareholder/investor owns a part of

the company equivalent to the number of shares held as a proportion of
the company's total outstanding shares.

● Stock is also considered as an investment. 

Why does a company issues shares?

• Raising Capital - A startup can raise such capital either by

selling shares (equity financing) or borrowing money (debt
financing).

• Listing Shares - When a company establishes itself, it may

need access to much larger amounts of capital than it can get
from ongoing operations or a traditional bank loan.
 CLASSES OF SHARES OF STOCKS
The two main classes of stocks are:

1. Common Stock- is a stock that entitles the holder thereof to pro rata division of the profits. It is
also what the private corporations ordinarily issues.

2. Preferred Stock- this type of stock entitles the holder thereof to certain preferences over the
holders of the common stock.

Other classes of shares of stocks includes:

1. Par value share- has a specific money value appearing in the certificate of stock for each
share of stock of the same issue.
2. No par value share– a share of stock without stated or par value stated on the certificate of
stock.
3. Voting share– is a share with right to vote.
4. Non-voting share– is a share without a right to vote.
5. Promotion shares
6. Share in escrow
7. Convertible stock
 OTHER CLASSIFICATION OF STOCKS
● Speculative stocks - are
● Blue chip stocks - stocks with higher-risk,
organizations with these considered as more
stocks have solid foundations aggressive stock with
and decades or centuries of uncertain prospects.
record.
● Range bound shares -
● Growth stocks – refers to any These stocks are used by
share in a company that is investors to buy at the
anticipated to grow at a rate reduced support of the
significantly above the product range and are sold
average growth for the off by participants at the
market. higher end of the product
range
Stock Market
Stock markets provide a secure and regulated environment where market
participants can transact in shares and other eligible financial instruments with
confidence with zero- to low-operational risk. Operating under the defined rules
as stated by the regulator, the stock markets act as primary markets and as
secondary markets.

A. As a Primary Market - the stock market allows companies to issue and sell
their shares to the common public for the first time through the process of
initial public offerings (IPO).
B. As a Secondary Market - Following the first-time share issuance IPO
exercise called the listing process, the stock exchange also serves as the
trading platform that facilitates regular buying and selling of the listed shares.
 PURPOSES OF
STOCK MARKET

• Provide Capital

• Give Investors an Opportunity

to Share in Profits
 FUNCTIONS OF A STOCK MARKET
A stock market primarily serves the following functions:

• Fair Dealing in Securities Transactions

• Efficient Price Discovery
• Liquidity Maintenance
• Security and Validity of Transactions
• Support All Eligible Types of Participants
• Investor Protection
• Balanced Regulation
 STOCK MARKET PARTICIPANTS

1. Stockbrokers
2. Portfolio Managers
3. Equity Research Analysts
4. Investment Bankers
5. Custodian and Depot Service Providers
6. Market maker
How to earn
money in
Stocks
 Stocks carry more risk than some other investments, but also have
the potential to reap higher rewards. Stock investors earn money in
two main ways:

1.TRADING 2. INVESTING
Dividends are regular
If the price of a stock payments to shareholders.
goes up during the time Not all stocks pay
they own it, and they sell it dividends, but those that
for more than they paid for do typically do so on a
it. quarterly basis.
 Trading in Stock
Market
Trading refers to buying and selling shares of stock for cash, not
actually trading them for other stocks. Stock trading takes place on
open markets, in which anyone can participate. Most stock markets only
allow brokers to place buy and sale orders, but anyone with access to a
broker, including automated electronic brokers that operate online, can
trade on the market. Since anyone can participate in stock trading,
buyers and sellers are free to make transactions for any price they
agree to.
Categories of Traders
 Categories of Traders
Position Trader A traders style refers to the timeframe or holding
period in which stocks, commodities, or other trading
positions are held
instruments are bought and sold. Traders include:
from months to
years.

Scalp Trader
positions are held
Swing Trader Day Trader
for seconds to
positions are held positions are held
minutes with no
from days to weeks. throughout the day
overnight positions.
only with no
overnight positions.
 Traders often choose their trading style based on
factors including account size, amount of time that
can be dedicated to trading, level of trading
experience, personality, and risk tolerance.
 Investments often are held for a
period of years, or even decades,
taking advantage of perks like interest,
Inv
esti
dividends, and stock splits along the

ng
way. While markets inevitably fluctuate,
in S
toc
investors will "ride out" the downtrends

Ma k
with the expectation that prices will

rke
rebound and any losses eventually will

t be recovered. Investors typically are

more concerned with market
fundamentals, such as
price-to-earnings ratios and
management forecasts.
 Buy and hold is a passive investment
strategy in which an investor buys stocks or
other types of securities and holds them for
a long period regardless of fluctuations in The
the market. An investor who uses a Buy-a
nd-Ho
buy-and-hold strategy actively selects ld
Strate
investments but has no concern gy
for short-term price movements
and technical indicators.
Two Basic Approaches to
Value investing
Stock Market Investing
is more focused on avoiding risk than
growth investing is, although value
investors do seek to buy stocks when
they consider the stock price to be an
undervalued bargain.

Growth investing

Growth investors seek out companies

with exceptionally high growth
potential, hoping to realize maximum
appreciation in share price.
Applications from
Perspective of a
Company
 CORPORATION

● An entity with a separate legal personality from its stockholders.

● Composes of at least 5 incorporators
● Its existence only begins from the date of the issuance of the
certificate of incorporation.
● Life of a corporation = up to 50 years, extendible to not more
than 50 years for one time.
 Revised Corporation Code
(Republic Act 11232)
● One Person Corporation - a single person can be an owner of a
corporation (Section 116)
Exceptions:
Banks and quasi-banks, preneed, trust, insurance, public and
publicly-listed companies and non-charted government-owned and
–controlled corporations

● Life of Corporation – perpetual existence

*corporations with term of a specific period shall be extended but
no extension shall be made 3 years earlier prior to the original or
subsequent expiry date(s). (Section 11)
A corporation may consist of
4 classes of persons:

Corporators Incorporators

Stockholders Members
 ● also called “going
public.”
● primary market for the
IPO company’s shares.
(Initial ● a place where
Public companies qualify and
Offering) register to offer their
shares in.
● Prices of stock will rise and fall
based on free market forces
which make short-term
movements of the stock STOCK
market so difficult to predict.
PRICES
● Free Market System - the
price of any commodity will
rise as demand for it
increases, as long as there's a
fixed amount of the
commodity in circulation.
● Why people buy stocks?
- Earnings and profit
● If your company posted a SUPPLY &
DEMAND
record sales in the most
recent quarter, then it will
probably attract more
investors, pushing up the
stock price.
 Key to Investing
● Buy low, sell high
- The safest way to buy low and sell high is to invest in a slow
growth stock and hold onto it for many years. This allows the stock
price to weather short-term fluctuations, but average steady growth
over time.
• A much riskier investment strategy is to try to pick the "next big thing"
and cash out quickly after the stock price skyrockets.
● Another way to safely invest in the stock market is to find a
stockbroker
- he/she understands your investment strategy and trades
accordingly.
 PERSONAL
APPLICATION
 Things You Need to Know About Taking Part in the Stock
Market
1) Buy low and sell high.
2) There is no such thing as a sure thing.
3) Get familiar with filings.
4) Think long term.
5) Consider the dividends.
6) Mutual fund is just the collection of investment, often
stocks.
7) An index fund is a specific kind of mutual fund governed by
very simple rules, the reason why management costs are
very low.
The smartest stock investment is index funds

● Passive investing
- index funds is a passive investing because follow or mimic an index in
of a stock or a bond
● Low expense Ratio
- have lower expenses and fees than actively managed funds.
● The cheapest type of funds
- it is inexpensive because the fund manager doesn't have a
need fo a research analyst and other that assists on stock
selections.
There Is No Perfect Metric

Professional and amateur investors alike have their

favorite measures of growth and value, from
price-earnings ratios to dividend yields and profit
margins. But there is no single number that divides
good stocks from bad ones. A stock that looks cheap at
10 times earnings can go to 5 times in a flash, and a
flashy tech startup that looks pricey at 3 time sales can
easily jump to 6 in a second.
Know What You Need, And What You're Paying For

For most investors the basic essentials can be found

anywhere. Make sure you know the type of buy or sell
order you're entering. A market order, for instance, will
be executed as soon as possible, whatever the
prevailing market price; a limit order by contrast will
only complete the transaction within price parameters
you've established.
Most people invest in stocks by opening an
account with a brokerage
Generally invest in stocks through a brokerage firm. To
do so, they must open an account and deposit money.
Once you’ve added money to your account, you can
direct the brokerage to purchase a certain amount of
stock. A brokerage usually charges a small fee for these
services
 Different brokerages have
different strengths and
weaknesses.

m e . D e p e n d in g on your
s are the s a
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even no ) fe e s
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There’s no one s
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explore the b
 of A good strategy
in t h e s t o c k
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Investing r is k y . It c a n b e is to spread out
c o r p o r a tio n is very
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temptin t h in k m ig h t turn investments
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 Pay Attention to
the Market
"News"

As an investor, the news flow driving day-to-day gyrations

in the market should be taken as interesting reading rather
than a reason to make or change strategy.
 Investing in stocks is one of many
options for investing your money

Stocks are a popular avenue for investment, but

it’s far from the only option. Depending on your
needs, income and when you’ll need to access
the money, you can take advantage of a variety
of different investment strategies.
References
● Beers, B. (2020). Buy and Hold Definition. Retrieved from
https://www.investopedia.com/terms/b/buyandhold.asp
● Brain, M. & Roose, D. (2011). How Stocks and the Stock Market Work. Retrieved from
https://money.howstuffworks.com/personal-finance/financial-planning/stocks.htm
● Chen, J. (2020). Growth Stock. Retrieved from https://www.investopedia.com/terms/g/growthstock.asp
● De Leon, H. & De Leon, H. Jr. (2016). The Law on Partnerships and Private Corporations. Rex Book Store.
● Farley, A. (2020). Can You Earn Money in Stocks?. Retrieved from
https://www.investopedia.com/investing/can-you-make-money-stocks/
● Folger, J. (2020). Investing vs. Trading: What’s the Difference. Retrieved from
https://www.investopedia.com/ask/answers/12/difference-investing-trading.asp
● GuruFocus (2016). 4 Types of Stocks to Consider. Retrieved from
https://www.nasdaq.com/articles/4types-stocks-consider-2016-12-25
● Hartman, D.. Basic Concept of the Stock Market. Retrieved from
https://finance.zacks.com/basic-concept-stock-market-2243.html
● Hayes, A. (2020). How Does the Stock Market Work?. Retrieved from
https://www.investopedia.com/articles/investing/082614/how-stock-market-works.asp
● Josephson, A. (2021). How Does the Stock Market Work?. Retrieved from
https://smartasset.com/investting/how-does-the-stock-market-work
References
● O’Shea, A. & Voigt,K. (2020). What is Stock?. Retrieved from
https://www.nerdwallet.com/article/investing/what-is-a-stock?fbclid=IwAR04JHOF8AZuoKBl8RMSEEnVMQ
xoBAPz_Xbx35ZRUBm4a5ZXA_1KKq8epPs
● PESOLAB (2021). Blue chip stocks: Best 30 companies in the Philippines. Retrieved from
https://pesolab.com/blue-chip-stocks-best-30-companies-in-the-philippines/
● (2018). Revised Corporation Code of the Philippines. Retrieved from
https://www.officialgazette.gov.ph/downloads/2019/02feb/20190220-RA-11232-RRD.pdf
● The Economic Times (2021). Definition of ‘Stocks’. Retrieved from
https://economictimes.indiatimes.com/definition/Stocks?fbclid=IwAR06fZQhMqrYTHR2NHLGQLiuoUQ8YZ
u0CzfDcOFWU1l_4fTND5yDHIY2w1w
● TSI Wealth Network. What are speculative stocks? Retrieved from
https://www.tsinetwork.ca/tag/speculativestocks/#:~:text=A%20speculative%20stock%20is%20a,typicaly%
20drawn%20to%20speculative%2 0stocks
 Thanks!
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