Definition Of Stock Investment, Profits And Risks

Illustration. (Photo: Unsplash)

JAKARTA - Investment is an instrument for profit. Stock investment is also one of the most famous investment activities in the community because it can bring profits to investors and companies.

So it's not uncommon now that many millennials are starting to look at stock investment as a way to get money. However, before entrusting your capital to securities companies, then it would be nice if you knew what stock investment was.

What is stock investment? Although we often hear this word, there are still many who do not know about stock investment. Stock investment is a sign of an investor's capital participation in a company.

Simply put, if you own A's shares then you can be called one of the financiers of company A and evidence in the form of shares that you own. By owning a company's shares, you can be included in the decision making (General Meeting of Shareholders or GMS). In fact, you also deserve the company's profit.

The profits received by investors are usually in the form of dividends and capital gains. Dividend is a net profit that the company shares with each shareholder. Meanwhile, capital gains are the difference in the purchase price and share sale. For example, you bought 1 share of A at a price of IDR 10,000 and today the share price of A is IDR 15,000. So, the capital gain that you get is IDR 5,000.

Generally, the growth of a company will go hand in hand with the price of the shares. Therefore, the company's performance will affect capital gains and dividends.

The ability to analyze companies that deserve to be invested certainly cannot be separated from the condition of the national and global economy. So following economic information actualally becomes important for an investor.

Although it is often used in marketing, the terms stock investment and stock trading are different. Some of the differences include:

1. Termpat waktu. Trading saham mayoritas berfokus pada jangka waktu kurang dari 1 tahun. Sedangkan berinvestasi saham biasanya berorientasi jangka panjang.

2. How to analyze. In stock trading, investors use price data as a reference for determining buying and selling decisions. while investing in stocks, investors tend to conduct deeper analysis of the company, be it financial reports, company backgrounds, business models, etc.

When talking about the stock market, of course you have to know not only the benefits you can get, but vice versa, losses are also a risk you have to face. Because one of the weaknesses of stock investment is the high risk.

But it certainly fits the maximum profit that can be obtained if the business is successful. Therefore, it is important for you to learn how stock investment works so as not to suffer losses.

When you invest, then you become part of the company's business. For example, there are 10,000 stocks sold/traded to the public. If you own up to a thousand, then you own 10% of the shares.

After that, the company will use the money to run its business and expand. Well, this is where investors' sources of profits come from.

Everyone certainly has a different goal when they decide to invest their money in stocks. Some hope for profit in the near future, but some hope to make a profit over the long term.

The following is the purpose of investing in stocks:

1. To develop assets, because the capital we invest will be managed by the company to continue to grow. 2. Prepare funds for future purposes. 3. Looking for passive income. 4. Protect assets from inflation.

The classification of the type of stock investment depends on the business industry. As of September 23, 2022, the Indonesia Stock Exchange has recorded 810 registered companies. In general, they are divided into 12 categories as follows:1. Energi2. Standard goods3. Industry4. Primary consumer goods5. Non-primer consumer goods6.Health 7. Finance8. Property & real estate9. Technology10. Infrastructure11. Transport & logistics12. Investment products are recorded

The way to invest in the market is to use an application provided by a securities company that has received permission from the OJK. The following is a list of stock investment applications, including:

1.Bibit

For those who are investing for the first time, Bibit is a way to invest in stocks for beginners. In addition to providing risk profile check features, investors can invest starting from a small nominal, which is IDR 100,000.

2. Ajaib

The next share investment tool is Ajaib. In addition to offering various investment applications, OJK also ensures its safety with easy-to-understand user interfaces.

3.Sockbit

If you want to trade while chatting and analyzing together, then Stockbit is a reliable tool for investing. One of the advantages is the existence of virtual trading services for learning, buying and selling stocks.

4. Alpha Investment

Investment Alpha One of the stock investment applications that has many features with benefits for beginners. One of them is a low fee broker, such as a 0.1 percent purchase fee and 0.2 percent selling fee, plus a fast and easy process.

5.Bareksa

The last recommendation for investment questions is Bareksa. Besides being managed by OJK, there are more than 150 traditional and sharia products that can be operated online for easy use.

Investing in stocks is one of the investment activities that guarantees high profits. Several other benefits for investors are as follows:

1. Potential capital gain

The advantage of stock investment is the ability to earn money in the form of capital gains from the difference in selling prices and purchase prices. Usually, the bigger the investment, the bigger the capital gain that can be realized.

2. Stock dividend

The next stock investment advantage is that investors will get dividends, namely profits based on invested capital.

If the above discusses profits, don't forget to find out the risks or losses of stock investment, namely capital loss (the opposite of capital gains) and liquidation/banking company).

In addition, another risk is when an aggrieved company is liquidated or removed from the exchange from the IDX, so that investors will sell all of their products regardless of their selling price.

From the explanation above, it can be concluded that stock investment is a type of instrument that provides high profits but also according to the risks.