A Complete In-depth Guide to GStocks Global

This post describes how to buy and sell US stocks using GStocks Global within the GCash app.

Disclaimer: This post aims to educate, and not to give financial advice. Investments have different risks and it is up to the investor to do due diligence to make their own decisions regarding his money.

Table of Contents

What is GStocks Global?

GStocks Global is the international counterpart of GStocks PH. It aims to offer a way to purchase and sell stocks and securities from overseas markets. Currently, it is focused on the US stock market through a partnership with EasyEquities, a broker based in South Africa.

Currently, while waiting for regulatory approvals from the SEC, it has opened an investing game that provides prizes to the top 20 traders per week.

What are the requirements to join the GStocks Game?

You need to be at least 18 years old and a Filipino citizen, and your GCash account should be Fully Verified.

What are the mechanics of the GStocks Game?

The game runs from Monday to Friday and resets every Saturday. Each week players are provided USD 10,000 as play money to invest in the US Stock Market. You need to buy stocks to be able to win the weekly prize. The one who has the most net asset value wins the game. The top 15 players will qualify for prizes.

The US Stock Market is open weekdays from 9:30 AM – 4:30 PM Eastern time, which is exactly 12 hours behind PH time. So 9:30 AM EST is 9:30 PM in the Philippines.

What are the prizes for the GStocks Game?

First place – Php 10,000
Second place – Php 7,500
Third place – Php 5,000
Fourth place – Php 4,000
Fifth place – Php 3,500
Sixth place – Php 3,000
Seventh place – Php 2,500
Eighth place – Php 2,000
Ninth place – Php 1,500
Tenth to Fifteenth places – Php 1,000

Introduction to Investing

Investing is basically setting aside some cash to make it grow. This is different from saving. We are not just storing the money, we are making money work for us.

Before, when you needed to invest, you also needed to pay for middlemen or for services that act like middlemen before you can invest.

But now, as the Internet makes things interconnected, it also makes investments available quickly 24/7. Investing has never been as accessible as it is currently.

However, this speed has never translated easily with our fellow Filipinos. Many of our countrymen are not Internet savvy and don’t even have a credit card or a savings account to start with. What more when it comes to investment vehicles like mutual funds, stocks, real estate, or time deposits?

What is interest?

Interest is the amount charged by anyone giving a loan or doing work with money. It is usually expressed in terms of percentage or rate.

For example, there are deposit products with a 4% APR or annual percentage rate. This means that the deposits will gain 4% yearly.

However, it can be expressed differently to give a false impression, i.e., 4% APR for a certain month actually means a smaller rate because you need to divide the 4% by 12 because there are 12 months in a year.

In a nutshell,
4% = 0.04 per year / 12 months in a year = 0.0033 per month (or 0.33% per month)

So, a Php 1000 investment will only earn Php 3.30 in that particular month, less if you take account of taxes.

What is simple interest?

Simple interest is a one-time compounding of your principal with a certain rate. Usually, we can see this with credit cards or other simple loans.

Here is a more in-depth explanation:

The formula of total amount due to simple interest is:
A = P (1 + rt)

where:
A is the total amount gained
P is the principal amount (or the original amount you've invested)
r is the interest rate (or the total percentage / 100)
t is the time your money is in the investment, it can be any unit of time (years, months, days, etc)

An example is the interest in GCredit. If you used GCredit to pay 500 pesos to a merchant, and you plan to pay it off the week after. How much interest in total do you have to pay?

Given:
Principal = 500
r = 5% = 0.05
t = 7 / 30 days

So the total amount due after 7 days is:
500 x (1 + (0.05) x 7/30) = 505.83

What is compound interest?

Compound interest is the backbone of investing. This means that once you’ve provided the principal, once interest sets in, this total amount is reinvested and in turn, this makes the interest bigger. Once this goes on for a while, this can be big enough that you can even live off the interest as a type of recurring income.

Here is an in-depth explanation:

The actual formula of compound interest is:
A = P (1+(r/n))^nt

where:
A is the total amount gained
P is the principal amount (or the original amount you've invested)
r is the interest rate (or the total percentage / 100)
n is the no of times the principal is compounded per unit t
t is the time your money is in the investment, it can be any unit of time (years, months, days, etc)

As a real world example, given the annual interest rates of a certain fund is fixed at 8% and you've put in Php 1000 at the start, what's the total amount after 3 years?

t = 3 years
n = 1 as interest is compounded after every year

A = P (1+r/n)^3(n)
A = 1000 (1+(0.08/1))^3(1)
A = 1000 * 1.256
A = 1256

So after 3 years, your investment is worth Php 1256 with a gain of Php 256

What are some terms used in investing?

Most of the time, there are a lot of terms used in investing that are out of the reach of any beginner. Here are some terms encountered, and I will try to explain each as simply as I can each term:

Stocks – part ownership of a company; the stock market allows you to buy stocks of different publicly traded companies and the value of each share of stock usually also represents the value of the company as a whole
Shares – can be summarized as the smallest “part”, so shares of a stock are the smallest unit of ownership
Bonds – company-owned debt, some debts are more valuable than others; for example, big companies more often than not take responsibility to pay their debts than others
Treasuries – government-owned debt; these are considered safe investments as they are backed by the government and will likely not disappear soon
- Some treasuries include:
  - Treasury bills – short-term debt (less than a year)
  - Treasury notes – medium-term debt (more than a year, less than 10 years)
  - Treasury bonds – long-term debt (more than 10 years, may stretch to 30 years or more)
Equities – part ownership of a company; the main difference is stocks are publicly traded and the value would most likely fluctuate day-per-day, while equities are privately owned and the value is not easily computed
Securities – is an umbrella of any type of ownership or debt; it may include shares, bonds, equities, treasuries, and others
Dividends – distribution of profits shared to investors in the company, usually divided by the number of shares that investor owns; some companies invest their profits to themselves, others share dividends
Fixed-income – it means it provides a fixed amount of income per period

What are investment funds?

Investment funds are funds that are pooled (or bunched together) from different investors and professionally managed by a manager or company. Each investor gets a share of the pool (or bunch), and each value of this share is usually called a NAVPU (Net Asset Value Per Unit), which represents his part of the investment. These funds come in many forms:

Mutual Funds – funds that consist of stocks and bonds, usually managed by a company
Unit Investment Trust Funds (UITFs) – funds that contain stocks, bonds, and securities (similar to mutual funds) but these are often provided by banks
Index Funds – funds that represent a certain segment of a market, usually the stock market
Feeder Funds – funds that manage other types of investments; usually these investments are hard to get into (for example, overseas stock markets or hedge funds)
Hedge Funds – funds that employ alternative strategies to earn high returns, usually exclusive for high net worth investors

So when a fund appreciates in value, the NAVPU also goes up. When an investor sells his share, then the difference between the NAVPU price he bought and when he sold consolidates to become a profit for him. On the downside, if an investor sells his share when the NAVPU is below the price he bought it, then it becomes a loss.

What are the different types of investments in mutual funds?

Mutual funds are managed by a company. How they make different types of mutual funds depends on the mixture of different investments:

Bonds – basically a loan of a large known company that pays out a fixed income over time
Stocks – units of ownership of a public company; you can buy and sell these in the stock market
Government Securities – loans owed by the government

How safe are government securities?

Government securities are some of the safest, most conservative investments because these are backed by the government, and governments don’t just disappear overnight. They also do their best to pay off their dues even if it means they’ll print cash to do it.

How safe are bonds?

Bonds are also conservative investments because these are often loans by large, stable (“blue chip”) companies – they need cash to fund their expansions and projects so this is where they source their funds. These are usually also backed by big banks, so it is in their best interest to pay these loans.

How safe are stocks?

Stocks are considered aggressive investments because the price of the stock is based on the market. And the market represents people buying or selling, often based on their feelings and short-sighted information. Unfortunately, feelings are not logical and information can also originate from hearsay and rumor. This fuels its unpredictability with really high gains, but also very high losses. This also makes it profitable with the right mindset at the right timeframe (like 7 years or more).

One big difference between stocks and bonds is the ownership factor – if things go bad financially, the lenders are the first to be paid, as obligated by law. Last are the shareholders.

How do these investments factor into different types of mutual funds?

Since different investments have different risks, mutual fund companies combine one or more of these to form a mutual fund that leverages different mixtures of these different types of risks.

For example, there are mutual funds that are low risk, and these usually consist of bonds and government securities. There are funds that are balanced, and these are usually stocks mixed with some bonds. There are also funds that are high risk and typically these mainly consist of stocks.

What are stocks?

Stocks are units or shares of ownership in a company. If you buy shares of stock, then you become a part-owner of the company. You can buy these shares at a stock market, in the case of the Philippines, it is locally managed by the PSE (Philippine Stock Exchange), and through multiple accredited brokers (like CitisecOnline or AB Capital).

For GStocks Global, they have partnered with Easy Equities to be able to buy and sell US stocks.

Why would I need to invest in stocks?

Investing in stocks can be a way of making money without spending a lot of time or effort to start. Some investments require you to spend either time or money to start and maintain it. For stocks, generally, you only need to put money and you will be able to reap the benefits later on.

Generally, investing in the stock market has bigger gains than traditional investments like time deposits or government bonds and securities. However, bigger gains also mean bigger risks so when investing here you should consider not touching the investment for a long time. Generally, if you look at the stock price of a company for a long enough period (usually in terms of decades), it gives a better return on your investment.

Stocks have non-fixed prices, depending on what is happening in the company (or in the market as a whole). It is in these differences in price that traders look to invest in. When you buy low and sell high, then you can make a profit.

How do you make money in stocks?

There are generally two ways — when your stock value appreciates, or when you earn dividends from your stocks. Dividends are a type of revenue some companies share with their shareholders. These dividends are from profits the company gained while doing business.

When is the best time to invest in stocks?

Generally, the best time to buy is during a recession. The best time to sell is when the market is bullish. But because we as beginners don’t know what the best time is, one recommendation is to invest some money at a set time period, via cost averaging — meaning buying stocks at regular periods at a set price.

This also applies when selling your shares as well. You can also do that by reverse cost averaging. This works for people who need some money at regular intervals.

Is it hard to invest in the stock market?

It is hard because there is a lot of information to take into account. However, as with many things, if you put in the work to learn, you can lessen your mistakes.

The act of investing is simple enough that doing so can be done anywhere with an Internet connection. COLFinancial is one such platform to invest in. Another is GStocks PH. Other alternatives can be FAMI (First Metro) and Phil Stocks. GStocks Global is currently hosting a game where you can win prizes.

If you need pointers on how to invest, you can first take a look at the SmartPinoyInvestor beginner’s guide. There are also a lot of books related to this subject. You can look into The Intelligent Investor by Benjamin Graham, who was Warren Buffett’s mentor. This book is more than 70 years old, and the principles described here still hold true today.

What are some good stocks to buy?

An easy pick is a stock that serves a public need and would stick around for a long time. Part of being an investor is doing your research to find the best stocks that fit your investment appetite.

An example is if you want consistent dividends, then perhaps you can invest in REIT (real estate investment trust) stocks as these are focused on providing dividends taken from the rental income of big property owners.

Where can I look up stocks available in the market?

You can look it up from inside the platform you are using (like COLFinancial or in GStocks PH) but you can also use the PSE Lookup Tool to find companies you may be interested in investing in.

For GStocks Global, there is a built-in tool to check out the different US stocks you can purchase.

What are some considerations when buying or selling stocks in the stock market?

Buying and selling stocks take time to process, as the local stock market is only open on weekdays from 9:30-12:00 PM and from 1:00-2:30 PM. Aside from that, topping up your account wallet also is not instant as you need to wait 1 banking day for it to be processed.

For GStocks Global, this follows the US Stock Market trading hours, which are 9:30 PM – 4:00 AM Philippine time.

Another consideration is that when buying stocks, you cannot buy just 1 unit of stock. There are lots (or groups) of stock and these are the minimum units you can buy. Some stocks you can buy by lots of 10, others 100, and there are other lot sizes available.

In contrast, for the US stock market, you are able to buy single shares.

How do I register with GStocks Global?

After the lengthy introductory read about the basics of investing and stocks, we can now proceed with registering an account.

You can see GStocks Global under GInvest on the GCash main page. You will first get a tutorial page to see an overview of what you can do with the game.

GStocks Global Registration

Once you click on Play Now, you will see the onboarding pages. Most of the hard work has already been done as they get your information from GCash KYC (Know-Your-Customer) when you did your verification.

How do I use GStocks Global?

Once registration is done, you will be able to log in and go to the main/portfolio page. You will see that you have USD 10,000 (PHP 560,000) in play money to invest.

Invest

This is where you can buy the stocks that are available. Buying is straightforward, you can click on the company you want to invest in, then click Buy. You then need to input how many shares or how much in shares you want to buy. Likewise, you can Sell from your portfolio page.

Lastly, you select whether it’s a Market Order, meaning you are buying or selling it at its current market price, or Limit Order, meaning you want to buy or sell once it hits at or below a price point you’ve set.

Challenge

This section shows your ranking and the leaderboard for the weekly challenge. You can also see here the badges you’ve collected over the course of using GStocks.

Watchlist

The watchlist shows the stocks you’ve saved to help you buy and sell. It also helps you make more informed decisions as you are able to see monthly percentage graphs as well as the last price.

Notify

This page shows any notifications while using the GStocks Game.

Summary

We talked about GStocks Global and how to buy and sell US stocks from the platform. Currently, it’s set up as a game due to ongoing regulatory applications. The game though allows you to win prizes by being in the top 15.

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