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JAKARTA, KOMPAS.com – The stock is one of the instruments investation which is in great demand, especially from millennials and Generation Z. Many young people choose stock investment for several reasons.
The Indonesian Central Securities Depository (KSEI) noted that the number of investors who own stock assets in 2021 increased by 101.19 percent to 3.41 million. This increase was driven by the development of digital technology so that how to invest in stocks is now easier to do.
Before discussing stock investment, first identify what is stock. Simply, the stock is proof of ownership of the value of a company or proof of equity participation. Buying shares in a company means being the owner of the company.
Shareholders are entitled to share the profits from the company according to the number of shares they own. By holding shares, individuals and entities can claim ownership in a public company.
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Stock is one of the capital market investment products that can be an alternative long-term investment choice. When you buy shares, you buy in units called lots. One lot of shares is equal to 100 shares.
Stock is a type of investment that is classified as liquid or easily traded. Investors can buy their shares at any time when they need funds.
As for stock investment is the activity of investing in companies that are already listed on the Indonesia Stock Exchange (IDX) and trading their shares.
When choosing a stock investment, of course you have done the previous calculations. Like what are the advantages and risks that investors get from investing in stocks.
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As is known, stock investment is not free from the risk of loss. Therefore, it is very important for novice investors to study stocks more deeply to minimize losses in the future.
So what are the advantages and risks of investing in stocks?
Here are some advantages and stock investment risk what you need to understand.
Quoted from the idx.co.id page, stock prices in the secondary market or capital market fluctuate, sometimes up and sometimes down. The price formation occurs because of the demand and supply of a stock.
The supply and demand can be influenced by various factors, such as the performance of the company or industry, to the development of interest rates, inflation, exchange rates, or non-economic factors. One of the advantages of investing in stocks is from these price fluctuations.
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In general, the profits obtained by investors by buying shares or stock investment benefits are as follows:
1. Divide
First, the advantage of investing in stocks is that investors have the opportunity to get dividends. Dividends are profit sharing given by the company and derived from the profits generated by the company.
Usually, dividends are given after obtaining approval from shareholders at the GMS. To get dividends, investors must keep shares for a long period of time or are not traded, or have shares before the cumulative date (cum date).
Cum date is the determination date for investors who are entitled to receive dividends from the company because they own shares of the company.
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The distribution of dividends varies from company to company, which can be done once a year, 2 times a year, or within a certain period of time according to company policy.
Dividends distributed by the company can be in the form of cash dividends. This means that each shareholder will be given a dividend in the form of cash in a certain amount of rupiah for each share. This dividend usually goes directly to the customer’s fund account (RDN).
However, sometimes dividends are given in the form of shares. This means that each shareholder will receive a dividend of a number of shares. So that the number of shares owned by an investor will increase with the distribution of the stock dividend.
2. Capital gain
The second advantage of investing in stocks is capital gains. Profits from capital gains are obtained by investors when selling shares at a higher price than the original price.
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In other words, capital gain is the difference between the purchase price and the selling price of a stock. Capital gains are formed by stock trading activities in the secondary market.
An example of calculating capital gains is as follows:
Investor X buys ABC shares at a price per share of IDR 3,000 for 5 lots.
The purchase price for 1 lot is IDR 3,000 x 100 pieces = IDR 300,000
The purchase price of 5 lots is IDR 300,000 x 5 = IDR 1,500,000
After 1 month, investor X sells all ABC shares owned at a price of Rp. 3,500, then the selling price of 1 lot is Rp. 3,500 x 100 = Rp. 350,000
The selling price of 5 lots is IDR 350,000 x 5 = IDR 1,750,000
Capital gain = Rp 1.750.000 – 1.500.000 = Rp 250.000
Thus, the stock investment profit or capital gain obtained by X is IDR 250,000 or 16.67 percent.
Stock investment is the activity of investing in companies that are already listed on the Indonesia Stock Exchange (IDX) and trading their shares.-
In addition to profits, stock investment also has risks. In general, the risk of loss from investing in stocks is as follows:
1. Capital loss
The first risk of investing in stocks is capital loss. The opposite of capital gains, capital loss is a condition where investors sell shares at a lower price than the purchase price.
For example, XYZ shares are purchased at a price of Rp. 2,000 per share. Then the share price continued to decline until it reached Rp. 1,400 per share.
Fearing that the share price would continue to fall, the investor sold it at the price of Rp. 1,400, resulting in a loss of Rp. 600 per share.
Of course, investment losses are inevitable. Therefore it is important for investors to know the purpose of the investment so that it can reduce investment risk.
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2. Liquidation risk
The risk of being liquidated is if the company whose shares are owned is declared bankrupt by the court, or the company is dissolved.
In this case, the claim rights of the shareholders have the last priority after all of the company’s obligations have been paid off (from the sale of the company’s assets).
If there is still a remainder from the sale of the company’s assets, the remainder is divided proportionally to all shareholders. However, if there is no remaining company assets, the shareholders will not receive the proceeds from the liquidation.
This condition is the heaviest risk for shareholders. For this reason, a shareholder is required to continuously follow the development of the company.
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That’s information about stock investment, the benefits and risks. In addition to needing capital, stock investments must also be carried out with sufficient strategy and knowledge to minimize losses.
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