Bank

Account

My MONEY

Savings Account,

or

Checking Account

Contains only

MONEY

Savings Account,

or

Checking Account

Stockbroker

TRADING Account

+ Dividends

MONEY

Contains only

MONEY Stock Div.

+ SHARES of stock

Cash Div

Stockbroker

Account …“for ON-LINE

TRADING…”

You input your own

Transactions.

in your own

computer

Stock

Trading

Account

Stock

Exchange

You

actually

reach the

directly

Stock

broker You,

the

client

Stock

Exchange

This is the new method, to buy a stock

Stock

Trading

Account

Buyers

Sellers

Sellers

Sellers

Buyers

Buyers

Stock

broker You,

the

client

Stock

Exchange

No need to wait …to make a phone call

Stock

Trading

Account

Buyers

Sellers

Sellers

Sellers

Buyers

Buyers

Stock

Exchange

You can see what other investors are doing.

You can interact with them via computer.

Stock

broker You,

the

client

Stock

Trading

Account

Go to

your

computer

B U Y

S E L L Account:

Free of Charge

P.S.E.

Customerservice

@firstmetrosec.com.ph

“open an

account”

6,600

Dial 8590600 for guidance.

customerservice

@firstmetrosec.com.ph

Ask for help, to open an

online trading account

Fill up forms “ONLINE”

Account

Information

Trading

Agreement

Signature

Card

Print

Print &

Sign

Photocopy of

ID cards Attach Place in

an Envelope.

Fill-up, then: print.

courier of

Metrobank

branch

Deliver to

First Metro Sec

Print &

Sign

“Open

Account”

Creates ONLINE

Trading Account

Email for You… c/o any Metrobank branch

courier pouch 90033

Deliver …

Your APPLICATION for an online trading account, has been approved.

First METRO Sec

Stock Trading

Account

Stock 1

Stock 2

Stock 3

etc

Cash Check

OLD style: Deposit 25,000 at the start, to be

allowed to trade.

LINE UP AT THE TELLER…

Online trading account:

1. OPEN A

STOCK-

TRADING

ACCOUNT.

2. INFUSE MONEY.

3. BUY STOCKS.

STEPS

Start:

add

more

money. “PREPAID”

PURCHASES” 25,000

First METRO Sec

Stock Trading

Account

Cash Check

25,000

Dear Bank Teller:

.. My own

STOCK

TRADING

ACCOUNT

“I want to

deposit Cash

into”

OLD style: Line up, at the teller

NEW style: online transaction,

SECURE.

First METRO Sec

Stock Trading

Account

Metrobank

Account

To RELOAD cash into the “prepaid” account

Thru

“Metrobank

Direct” online

service

IF you have no Metrobank account, deposit P25,000 into

the stock-trading account, as minimum start-up.

IF you have a Metrobank account, no “minimum balance”

is required.

Stock 1

Stock 2

Stock 3

etc

25,000

user name

password

100,000

You see your

“available balance”

Same amount as

the balance inquiry

at ATM machine.

Balance: 100,000

100,000

You will be able to directly transfer

money from your bank account to your

stock trading account.

“Add funds for stock trading”

30,000

70,000

First METRO Sec

Stock Trading Account

Straight into: Stock Trading Account

No minimum balance of 25,000 required for

the stock trading account, if you connect it

to a Metrobank “deposit account”.

30,000

Cash:

Shares

Shares

First METRO Sec

Stock Trading

Account

Metrobank

Account

To RELOAD cash into the “prepaid” account

Thru

“Metrobank

Direct” online

service

Log into Metrobank.com.ph, and view your own account.

Transfer money, by yourself, to

your own stock trading account.

No transaction fee

No transaction

fee, either

Does not earn

Interest.

First METRO Sec

Stock Trading

Account

Metrobank

Account

Minimum Balance: P2,000… earns interest.

Use the STOCK TRADING ACCOUNT to buy

STOCKS that pay an 8% cash dividend yield.

First METRO Sec

Stock Trading

Account

Metrobank

Account

Two separate accounts, separate Log-IN

Thru

“Metrobank

Direct” online

service

If you forget ...password, …answer guide questions like:

“What is your favorite sport? What was your first school

? Name of your pet dog? Name of your favorite actress.”

First METRO Sec

Stock Trading

Account

Metrobank

Account

If you sell a stock, you can use

the money to BUY other stocks.

Thru

“Metrobank

Direct” online

service

If you sell a stock, MONEY STAYS in the Trading Account.

Then, you may use the MONEY, to buy other stocks,

on the same day…

First METRO Sec

Stock Trading

Account

To WITHDRAW CASH, FROM

STOCK TRADING account

Thru

“Metrobank

Direct” online

service

There is money in your TRADING ACCOUNT… You

download the WITHDRAWAL SLIP from

www.firstmetrosec.com.ph. Sign it. Fax to me. Scan it,

email to customerservice@firstmetrosec.com.ph.

Stock 1

Stock 2

Stock 3

etc

Metrobank

Account Sign Withdrawal

SLIP.. Fax

Online STOCK-

TRADING Account

Money

BANK

ACCOUNT

Stock

Stock

Stock

Stock

Stock

Stock

Mutual FUND* Stock

*F.A.M.I.

Money

Money

Study the market

Make a Plan

Finally, Decide.

How the trading account works:

Online STOCK-

TRADING Account

BANK

ACCOUNT

Mutual FUND*

Money Stock

Stock

Stock

Stock Money

IF “Joint

AND-OR”

Must be also

“Joint AND-OR”

NOW 11

months

12th

month

3. Open ‘Online

Stock Trading

Account’

Think Ready? 1. Metrobank

account *

2. Ask for Online

“Direct” Access Plan

Observe

Put in

Money

Trade,

invest

Study

One million

ONE MILLION

PLDT =

stock code

“TEL”

STOCK

“SYMBOL”

one

character

per stock.

Example of a “BUY” order

2,800

280,000

Stocks that

you own

# of

shares

Bought at

this price

Now trading

at this price

Your

“COST”

= Value of

your

“POSITION”

Your “PROFIT, so far”

minus

equals

=

After buying the stock

• You will get a

‘Confirmation Slip,’ online

• You will see ‘Statement of

Account,’ online

• You can view your

Portfolio Holdings, online

You can see, what you

have bought, so far…

“ALERT me

by email

when the

price of this

STOCK

reaches this

PRICE.”

“Send the

share

prices to

my email,

at

noontime

and after

the close.

Price of the

stock

At least:

Shares

Minimum

Investment

5,000 5 25,000

4,999 5 24,995

1,999 5 9,995

999 10 9,990

499 10 4,990

199 10 1,990

99 10 990

49 100 4,900

19 100 1,900

9 100 900

Minimum Order Size

10K

2K

25K

“Board Lot”: minimum # of shares.

Types of Fees Amount Buy Sell

Stockbroker’s

commission plus

12% Value-added

Tax on

commissions*

BC allowable range is 0.25% to

1.5% or a minimum of

Php.20.000, whichever is

higher

Clearing Fee

0.01% of transaction amount

PSE Transaction

Fee

1/200 of 1% of transaction

amount

Stock Transaction

Tax

0.5% of transaction amount

Trading Costs

¼ of one percent

1% of 1%

1/200 of 1%

Half percent

BUY Pesos

10,000 x 0.0025 25 broker comission

x 0.0001 1 clearing fee

x 0.0000005 0.005 stock exchange fee

26.005 pesos

For every P10,000 worth BUY

order, TXN costs are 26.005

SELL Pesos

10,000 x 0.0025 25 broker comission

x 0.0001 1 clearing fee

x 0.0000005 0.005 stock exchange fee

x 0.005 50 government tax

76.005 pesos

For every P10,000 worth SELL

order, TXN costs are 76.005

When can you execute trades?

till

When can you ENTER an online ORDER?

ANY

TIME It gets

implemented

by 930am

AFTER HOURS !

NEXT DAY

Trading: Buying

& Selling of Stocks

Investing: placing

more & more money in

Stocks

Expert

BEGINNER

Experiments, First Steps

Read the news, tips…

view technical charts.

“What stocks to buy?”

read daily TIPS

5,400

agilles@firstmetrosec.com.ph

• www.stockxchallenge.com free

download of my lecture files

• www.slideshare.com/sandygilles

• See also the research reports on

www.firstmetrosec.com.ph /

RESEARCH

agilles@firstmetrosec.com.ph SLIDESHARE.COM/

SANDYGILLES

8590600 / customerservice

@firstmetrosec.com.ph

Investing in Equities

Stocks, direct

or

Via Mutual Fund

Deposits are

insured: For Risky Assets:

Universal

Bank, does

both, plus, it can

own insurance

company.

Stockbroker

They put money

“to work”

PRIVATE MUTUAL

BANK FUND &

“U.I.T.F.”

Savings B

Comm’L B

Investing

your millions

for you

“Safe” Unsafe,

Uncertain !

Investing your

thousands for you

Which “bank” invests your

millions for you?

Minimum = 5 million

Charges = 4% per year

$ DOLLARS

Private Bank:

Who can invest your P5,000 for

you, at low cost.

Mutual FUND. The “private bank”

for ordinary people.

Minimum = P5,000

Charges = 1.7% percent a year.

47

Mutual

Fund 1. You have

money.

2. You hire a

professional,

to manage it.

Unit Investment

Trust Fund: 1. BANK Trust

Fund, open to

the public.

2. You buy a

UNIT.

MUTUAL FUND

We “make” our

own insurance.

“Let’s pool

our money

and invest it.”

“Mutual” BENEFIT

49

Mutual

Fund

Unit

Investment

Trust Fund

OPERATED

BY A STOCK

BROKER

Sold by SALES

AGENTS

OPERATED

BY A BANK

Sold at bank

branches

Inflation, 4%

Track record

High returns, %

Safe (good credit) RISKY (uncertain)

“Save & Learn”

Fixed-Income Fund,

8% / year

“Save & Learn”

Balanced Fund,

17% / year

ALL

Bonds

Half

Bonds,

Half

Stocks

“Save & Learn”

Equity Fund, 23% / year

ALL

Stocks

Get Forms:

at www.fami.

com.ph

How to buy mutual funds

Get application forms at:

www.fami.com.ph

Invest 5,000

At 5 / share

1,000 shares

Buy MORE

shares, each

month

Buy 100K of

stocks, directly

Buy 100K of

mutual funds:

Pay P2000 now.

(2% of assets)

Pay P1700/year (1.7% of assets)

Like: Hiring a

“Driver”

Pay P 261 in commissions,

for the entire

trade.

With Stocks: With Mutual

Funds:

You ‘drive

your car.’

You decide

freely.

They ‘drive

your car.’

They decide

freely.

You get the stress They get the stress

Fixed-Income and

other Stocks

47%

Power

10%

Telecoms

7%

Holding

Companies

13%

Properties

21%

Transport

2%

• P 8 bn

• Growth -Oriented

• All Stocks

• For Aggressive Investors

Equity Fund 2006 Net Yield 67.58%

2007 Net Yield 12.62%

2008 Net Yield -30.70%

2009 Net Yield 53.11%

2010 Net Yield 63.37%

2011 Net Yield 8.18%

YTD Yield (8/23/12) 18.88%

CAGR 24.40%

FAMI “Equity Fund”

Stocks

49%

Bonds

26%

Deposits

24%

Others

1%

• P3 Bn

• Launched in May 2007

• For Long-term investment

• Moderate Returns

• A balance of stocks and bond investments

Balanced Fund 2007 Net Yield 4.07%

2008 Net Yield -4.86%

2009 Net Yield 45.36%

2010 Net Yield 61.97%

2011 Net Yield 6.62%

YTD Yield (8/23/12) 17.26%

CAGR 18.54%

To consistently

make money:

invest LONG-

TERM 57

Buy NOW Buy LOW

Sell HIGH

Wait

The principle is

the same:

The Objective

Adjust the percentages,

to suit your preferences.

__% in Stock market

MUTUAL FUND

__% in Stocks that you

will personally select and

monitor

A

B

C

D

E

F

The price moves from “cheap” to “expensive,” and

cheap again.

Company

Earnings = net

profits

BUY

BUY

SELL BUY

Take-home

pay 60

Take-home

pay

Forced

Savings!

Philippines Singapore

-Taxes -Taxes

-Voluntary Savings?

61

compounding

100 x 1.15 for 30 years

100 x 1.06 for 30 years

6,621

574

Why be “aggressive”?

Q: Why save, for years and years?

IF too conservative:

13,000

Strategy: buy as it

goes down…

Stocks have overshot their

Long-Term Average

6,700

1987 – 2012: 10%

2002– 2012: 20%

2012: 33%

2012-’17: 20%

1,200

6,000

Strategy: buy, IN

CASE it goes up.

Which is safer ?

A. to keep stock

certificates (paper)

B. electronic records

or “scripless”

Can be rendered

invalid by :

Termites

Flood

damage

Molds,

Mildew

Theft

Crayola of

baby

Paper

Certificate

Recognized by

Broker

Stock

Exchange

Securities

Clearing

Enough

‘Back-up’s

Stock

Transfer Svc

ELECTRONIC

RECORDS, have

back-up systems

& security

66

P100,000 P100,000

Buy your

own stocks Pay P1700

a year

Less stress w/ Stress

On your Own Mutual Fund