Stock knowledge before stock investing

How would you like to have a business of your own without ever showing up at work? Think about sitting down with your piñacolada checking how your company grows and get dividends as your money rolls out. Looks like a pipe dream, doesn't it? But think again. It's real closer than you imagine.

I guess you know we're talking about stock investing here. This amazing type of financial instrument is certainly one of the most powerful tools ever made for wealth-building.

Stocks are a part, if not the cornerstone, of nearly any investment portfolio. And what was once a toy of the rich has now turned into the medium of choice for wealth creation to just about anyone. "This demand coupled with advances in trading technology has opened up the markets so that nowadays nearly anybody can own stocks. And over the last few decades, the average person's interest in the stock market has grown exponentially." says Investopedia.com.

Despite their reputation, however, most of us are not fully educated of what they are and much of what we know must have come from those who have too little to say about it. You've probably heard friends saying, "Never toy stocks or you lose your underwear next day!" or "My cousin just made a kill lately in ZZZ corporation, and now he's had another juicy tip." and I think much of this "little knowledge" is based on a get-rich-quick mentality, which was especially common during the phenomenal dotcom market in the late '90s.

People thought they [stocks] were like "wonder papers" to vast cash without ever thinking about risks but the ensuing dotcom crash proved everyone wrong. It's true, stocks can or has the power to create wealth in great amounts, but they aren't without risks.

To leverage stock investment we need to understand this monster before they eat everything you have. And the key to protecting yourself in the stock market is to understand where you are putting your money.

"When you start on your road to financial freedom, you need to have a solid understanding of stocks and how they trade on the stock market." adds Investopedia.com.

The internet offers a wealth of information about the subject like Yahoo, MSN or Investopedia.com and if you ever want to get to other sites you may need to sift those that persuade or lead you to "online trading" or "high yield investing" schemes. For sure, they are there to cash you every step of the way. Besides, it is not wise to go straight to US stocks. You can start your portfolio with local instruments since it looks like today is a good time to invest owing to the healthy performance of the economy lately.

I also suggest you talk to someone who has or had an investment with stocks or you may want to ask your insurance company where they put some of your premiums to. Most of or if not all of them have good stock investments somewhere. They may even want to help you with that and initially start with low-risk investments such as mutual funds.

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And speaking of which, I'd like to post this announcement from PSE:

The Philippine Stock Exchange (PSE) cordially invites you to a free stock market seminar on Saturday, 10 March 2007 from 1:00 to 5:00 pm, at the Grand Ballroom of Waterfront Cebu City Hotel and Casino.

This endeavor is in line with the PSE's main thrust to revitalize the local capital market by inculcating the stock market in the minds of a greater number of Filipinos. Through such investor education activities, we hope to promote the stock market as an effective venue for mobilizing capital for business enterprises, which in turn will generate more employment, more livelihood opportunities and more economic growth.

We have lined up experts who will share their expertise on stock market topics that we are sure prospective investors and would-be IPO candidates will find interesting.

We have a limited number of slots. Thus, we require participants to pre-register as we will accommodate only registered participants on a first-come, first-served, basis.

Pre-registration, however, is no hassle, because you can just call the PSE Market Education Department at (632) 688-7536 to 39 to pre-register and confirm your attendance. Or you may sign up by sending your name and company/organization via fax at (02) 6346695 or email to either [email protected] or [email protected]. Send emails to [email protected]