How do you make money in the stock market?

There are two major ways to make money grow in stock market:



First is through CAPITAL APPRECIATION. These are profits made due to an increase in the market price of a stock from the buying price.


For example, Jollibee Foods Corporation sells their stocks at 100 pesos per share (1 share of stock is worth 100 pesos). If I bought 100 shares, then I'll pay P10, 000 as capital for that stock. 

(Number of shares I bought x stock price = 100 shares x 100 stock per share).


If Jollibee continues to have a steady growth after a year and now sells 200 pesos per share. Then the current value of my stock would now be P20, 000 (my 100 shares x P200 current stock price). That's 100% growth of money in just a year! 


Second is by CASH DIVIDEND. This is a share of profits given to shareholders in the form of cash. It is computed by multiplying the number of shares held by the cash dividend rate declared by the company. 


For example, if PLDT declares a 68 pesos dividend per share and I currently have 100 shares. Then it entitles me to receive 6,800 pesos as dividend. Note that companies also declare the payout dates of their dividends (i.e. yearly, quarterly, etc.).




Other ways that you can profit are as follows:


Stock Dividend – This form of dividend given to shareholders in the form of additional stocks. It is computed by multiplying the number of shares held by the percentage of the stock dividend declared.


Stock Rights – This option is given to the present shareholders to buy additional shares of stock at a price lower than its market price.