How to start investing in stocks online

As I mentioned in one of my previous blogs, investing is the best way to grow your money. Investing is making your money work so that it makes more money for you. Investing your money is said to be the most effective way of building personal wealth and attaining future financial security for yourself.

It also safeguards your capital or savings against inflation which erodes the purchasing power of your money.

There are several investment vehicles but in this article, I will be focusing solely on stock market investing. What is the stock market? How do you start investing in stocks online? How much money do you need in order to start investing?

What is the Stock Market?

The stock market is a place where you can buy and sell shares of publicly listed companies. Years ago, you needed a traditional stockbroker to place trades for you if you wanted to invest in stocks and shares. But today, the internet has swept all of that away.

You can now buy and sell stocks and shares online, quickly, easily, and cheaply, without ever speaking to a stockbroker. All you need is a computer with a stable internet connection and some spare cash in your bank account.

The stock market

What are Stocks and Shares?

Stocks or shares represent ownership of a company. They are issued by companies to raise capital in order to grow the business or undertake new projects. Thus, anyone owning stocks or shares of the company is called the company’s shareholder or stockholder. Being a part-owner, you partake in the performance, growth, earnings, and profits, as well as losses of these companies.

Why do companies issue shares to the public? Instead of borrowing money from the bank, the company issues shares in order to raise money since they won’t need to pay for interest. With the stock market, they sell their share of stocks to the public and just share the profits to their stockholders.

How to Make Money in the Stock Market

There are two ways you can make your money grow in the stock market – either through capital appreciation or through receiving dividends.

a) Capital appreciation or capital growth – this means the market price of a stock increases. In simpler terms, the company you own is worth more than when you bought it. This is where the popular rule “buy low, sell high” originates from. You buy something at a low price and sell it at a higher price, the difference of which becomes your gross profit.

b) Dividends – are your share of earnings in the company as an investor. Dividends are given in the form of cash and stocks. But why would the company declare dividends? Simply because they are also shareholders of the company and dividends are their way of paying themselves.

Steps to Investing in Stocks Online

1. First, you need to find an online broker.

One needs a stockbroker to invest in the stock market. When looking for an online broker, you must consider the costs of each service the brokerage provides and the level of support you will need from qualified brokers. If you’re a beginning investor with little starting capital, it would be best to pick brokers with the lowest fees so that more of your available money is put into stocks rather than transaction fees.

As a new investor, you may wish to start with a broker that can provide personal advice for your investments. Most online brokers today offer services such as company research and investment guides to help you and some even let you set up a dummy account to get the hang of investing before committing real money.

Some online stock brokers in the Philippines include COL Financial (, First Metro Securities Brokerage Corporation (, BPI Securities Corporation (, and BDO Nomura ( To get a complete list of accredited stockbrokers, you may visit the Philippine Stock Exchange (PSE) website at

COL Financial

Personally, I use COL Financial, the largest online brokerage in the country, and the most active when it comes to promoting stock market education. They offer free seminars to their customers and the general public and have launched an EIP (Easy Investment Program) for passive investors.

I am not paid to promote COL Financial but I highly recommend them as a satisfied customer myself and also as per the recommendation of the Truly Rich Club. 

2. Open an online trading account.

Once you have chosen your online stockbroker, you can then open a trading account. Opening an online trading account is pretty easy just like applying for a bank account. You submit the required forms and documents, and the initial amount necessary and then wait a few days for your account log on details to be emailed to you.

Once you set up an account with an online broker, you need to fund your account so you can start buying and selling stocks. Most stockbrokers require a minimum of P5,000.00 as an initial investment. However, the more funds you have the better you can diversify your holdings to minimize risks.

3. After funding your account, you are now ready to buy your first stocks.

If you do not know what particular stocks to buy, it is highly recommended that you start your stock market self-study. Read as much as you can about the companies you’re interested in buying. If you do not bother studying particular stocks, you can just buy into a mutual fund which is composed of a wide variety of stocks.

I encourage you to join the Truly Rich Club by Bo Sanchez, it’s the best guidance out there when it comes to investing in the Philippine stock market. You will receive a stocks update newsletter every month telling you all you need to know about your stock investments.

The truly rich club

4) Place your order.

Unlike having a traditional broker where you communicate your order through a phone call or text message, online trading allows you to place your order directly through the internet. Once your order is completed, your stockbroker will give you a confirmation invoice indicating the details of the transaction.

How to start investing in stocks online

5. Monitor your investments and evaluate your investment strategy.

Monitor the movement of your stocks in your portfolio periodically to see if it’s working as planned. You may wish to add to your stock portfolio from time to time or allocate some funds to other investment platforms according to the changes in your personal circumstances and goals. You may also want to dispose of stocks that are not moving and replace them with more aggressive ones, or add more conservative ones to reduce your risks.

Here’s a screenshot of my 7-month old portfolio in July 2017. Sure I have some paper loss but my gains are a lot more.

My 7-month old portfolio


Why should you invest in the stock market? The stock market may not be the only type of investment present in the capital market but history has proven that over the long term, investing in the stock market has outperformed all fixed-income instruments and it also offers good protection from inflation.

One important thing to note is that the stock market operates on the power of compounding, which makes time your greatest ally. It makes your investment grow exponentially when your earnings or dividends begin to generate their own earnings. Yes, investing in the stock market is riskier than leaving your money in the bank, but the potential rewards are far greater.

Have you started investing in the stock market? If not, start today! Anyone can invest in the stock market, even you. The stock market is a readily available choice of financial vehicle for you if you want to make your hard-earned money work even harder for you.

Millionaire or not, everyone can earn on the same battlefield.

6 thoughts on “How to Start Investing in Stocks Online”

  1. I’d just like to give a shoutout to Sharebuilder. I suppose I don’t know how good they are nowadays, but years ago when I was new to investing they were who I went with and I never had any issues with them. And it was simple enough that 18 year old me could figure it out, so that’s gotta say something about the ease of use of their platform 🙂

    1. Hey Jimmy,

      With several online stock brokers to choose from, one of the things investors should consider is the ease of use of their platform. I ran a search on Sharebuilder but I was led to Capital One Investing website so I’m guessing they’re one and the same, they just changed names. But thanks anyway for mentioning, I’ll take a look at it.

  2. Hi, I enjoyed your post, it’s very informative. Someone I consider a mentor talked to me about how he has invested in stocks online, I didn’t pay much attention then, but I really appreciate the details you explained, I feel I shouldn’t waste more time and look into the possibilities. I will come back for more info. Thank you 🙂

    1. Hi Arlet,

      I’m glad you find my post informative. I do not claim to be an expert when it comes to investing in stocks as I am also still learning myself. I just wish somebody told me all about this when I fist started working, that way I would have started investing as soon as I was making a stable income.

      Anyway, I hope you would consider investing your spare cash in the stock market instead of just letting it sit in the bank. Just a reminder though, invest only the amount that you won’t be needing in the next 5-10 years.

      Please do check back as I will be posting more articles about how you can invest in the stock market to make your money work for you and start building your wealth.

  3. I just wanted to thank you for your in-depth information on the Stock Market, as I am a newbie to investing! I have always wanted to learn how to invest, but have been too terrified to do so! Finding a broker online always scared me, because it is so easy to impersonate someone… However, using a broker that has been tried and tested by others would make users feel safer for sure! So thanks for your recommendations! Now, as a Canadian, I have to ask: Do you HAVE to go through the brokerage firms from the Philippines, or is there US or Canada based ones as well?

    1. Hi Janice,

      Thanks for your comment.

      They say that investing in the stock market is risky and I say there’s some truth to that. But one thing that we need to clarify is that trading is different from investing. As an investor, you’re here for the long run which minimizes your risk of losing money.

      I can’t blame you for being scared to invest in the stock market with the aid of online stock brokers but as long as you go with those who are known for their good reputation, you will do just fine.

      There are a lot of trusted online brokers in the US and Canada. If you are in the US, you may want to check out TD Ameritrade (the number 1 ranked broker of 2017), Fidelity (the lowest commissions and bet tools for research), E*TRADE, TradeStation, Ally Invest and Merrill Edge. In Canada, Questrade, Optionsxpress and Interactive Brokers are the best online brokers.

      I hope this helps.

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