Chapter 1

PROBLEM AND ITS BACKGROUND

This chapter provides the statement of the problem, the assumptions,
the significance of the study, the scope and delimitation of the study, and
the definition of terms.

Introduction
Investing in stocks are the most talked about and most popular
investment opportunities available. Without a doubt, stocks are one of the
greatest tools ever invented for building wealth. Investing in stocks can be a
very rewarding experience, financially and emotionally, if youre on the right
track. With the right effort, right knowledge and right strategy, an investor
can do well in todays stock market. As some investors said, its probably
the only business in the world you can easily be a millionaire.
Over the last few decades, the average persons interest in the stock
market has grown exponentially. What was once a toy of the rich people has
now turned into the vehicle of choice for growing wealth. Nowadays, nearly
anybody can own stocks due to the advances in trading technologies.
Despite their popularity, however, most people dont fully understand
stocks People thought that stocks were the magic answer to instant wealth
with no risk. Stocks can create massive amounts of wealth, but they arent

without risks. The only solution to this is education. And this prompted us the
researchers to conduct study regarding investing stocks: its risks and
opportunities.

STATEMENT OF THE PROBLEM

This study aims to understand the threats and opportunities when
investing in stocks.

This sought to answer the following questions:

1. What are the factors considered by investors regarding their
decision to invest in stocks?
2. Why do people invest in stock market?
3. What are the opportunities associated in investing in stocks?
4. What are the risks associated in investing stocks?

ASSUMPTION
The researcher posted the following assumptions:
1. The reputation of the company, the rate that the corporation gives
to investor and the benefits they can get.
2. People invest in stocks because they can be a part-owner of the
company/corporation. Stocks has lots of opportunities if you want to
invest your money without getting tired, you just need a capital.

3. They can be a stock holder of the company, they can get high
dividends, they can get high profit and they can also connect to
other investors.
4. Returns are not guaranteed, losing of money and fluctuation of
stock price.

SIGNIFICANCE OF THE STUDY

The following are the stakeholders of the study:
For the students, to have knowledge on stocks in case they want to
invest in the future. This study will help them gain ideas for potential career
opportunities

in

investment

sales,

investment

product

research

and

development, security analysis and portfolio management.

For the professors, to have an idea in investing and also so that they
can impart the important concepts of investing to their students
For aspirant investors, to have an idea what risks and opportunities
lie on investing in stocks.
For future researchers, so that they can use it for future reference.

SCOPE AND DELIMITATION

This study focused on people who already have experience in investing

in stocks regardless of age and socio-economic status. The respondents were
twenty (20) people.

DEFINITION OF TERMS
The following terms shall be understood in context with the study. The
researcher provided this section to inculcate the meaning of the terms in
relation to the study.

Appreciation is an increase in the value of an investment.

Broker is a person who acts as an intermediary between the buyer
and seller of a security, insurance product or a mutual fund often paid by
commission.
Depreciation is an increase in the value of an investment.
Dividend is the payments made by a corporation to its shareholders
from past and current earnings.
Investment is a stock, bond, mutual fund or other asset that offers
investor the potential of profitable returns.
Return is the profit (or loss) earned (incurred) through investing.

Risk is the possibility that an investment will not perform as

anticipated.
Share is the representation of ownership in a corporation, mutual fund
or some other type of financial investment.
Shareholder is an investor who on shares in a mutual fund or any
other company.
Stocks are the shares of a corporation.
Stock market is a place where shares are bought and sold.