How Can You Make Money With Stocks?
- Price Appreciation
When you own shares of a company, it is possible for the market value or price of those shares to change over time.
Depending on how many people want to buy those shares and how many people are willing to sell them, the price will either go up or down.
This is the concept of supply and demand—how many people want to sell vs. how many people want to buy.
For example, if a company announces that it will launch a new product or that it earned a lot of money in the last quarter, more people may want to own a share of that company.
If more people want to buy shares but few people want to sell, then the demand will be greater than the supply and the price will go up.
On the other hand, if there is bad news about a company like low sales or problems with their factory, then people may not want to own a share of that company anymore.
If more people want to sell their shares but fewer people want to buy, then supply will be greater than demand and the price will go down.
This is a simple example, but there are a lot of factors that affect supply and demand.
Because the whole world is connected, what happens in other countries may also affect the Philippine economy and the prices of our stocks.
To make money through price appreciation, you must know how to consistently invest your money in stocks that increase in price and then be able to sell them before the price goes down.
It takes time to develop this skill, but it can be very rewarding.
There is no limit to how much money you can make, and the opportunities are endless!
- Dividends
Another way that you can earn money in the stock market is through dividends.
Dividends are simply portions of the company’s profit that are shared with their stockholders as a benefit of being part-owners of the company.
How much and how often dividends are given is up to the company to decide.
This is simpler than price appreciation, but you will have little control over how much money you can make.
However, if you do not want to be concerned with analyzing supply and demand, you can buy shares in companies that are known to give out dividends regularly.
This would require less effort while still allowing you to earn.