If you have long-term thinking, then surely you think you will start to invest. This investment is one of the activities that is very useful for your future life. But unfortunately, not many people are aware of the importance of this investment, especially for teenagers now. For the types of investments themselves, there are various types such as stock investments, mutual funds, deposits, bonds (Bonds), property, gold and precious metals, insurance. Among the types of investment just now that are very familiar in the community is stock investment.
How To Invest In Stocks For Beginners That Are Profitable and Safe
For those who just want to start investing in this stock, of course, you must know about the ins and outs of the stock itself. It’s nothing, without a mature understanding, stock investment can be regarded as a mere trial and error of luck. Without a correct understanding, putting funds in stocks can stump you or lose money. Of the many investment products, stock investment can be said to be a type of investment that can provide the highest return or return compared to other types of investment. But, behind the high yields, the risk shadow that follows stock investment is also quite high. So, it is highly recommended that you understand very well what stock investment is, its strategy and how to minimize its risk in order to maximize its profits.
The reason stocks have such a high risk is because on the one hand, investors can experience losses in the form of capital losses. But on the other hand, investors can also reap profits of up to 20 percent or more for one year thanks to stocks. Of course, with a 20 percent stock investment return, you are even more interested in starting this stock investment. Don’t worry for those of you who are still beginners because now there are many ways to learn stock investing. As will be explained below in the form of ways to invest in stocks for beginners.
Definition of Stocks
How To Invest In Stocks For Beginners That Are Profitable and Safe
According to the Indonesia Stock Exchange (IDX), the definition of shares is a sign of capital participation in a company or limited liability company. Because they invest in capital, they have claims on company income, claims on company assets, and are entitled to be present at the General Meeting of Shareholders (GMS). The definition of shares in general is a valuable document that shows the ownership of the company. In other words, when a person buys shares, that person has already bought part of the ownership of the company. The meaning of stock (stock) can also be defined as a unit of value or bookkeeping in various financial instruments that refers to the ownership of the company.
When a person buys shares of a company, that person has the right to the ASSETS and income of the company with a portion of the purchased shares. Apart from the company’s ownership rights and profit sharing, the movement of stock prices is also another source of profit from the movement of stock prices. The value of a company will change both due to assets, profits, capital, and especially market sentiment. So that the value of a company’s shares will change from time to time. For example, shares of Bank Central Asia (BBCA) at the beginning of 2005 per share were valued at 1475 Rupiah, while at the end of 2014 (10 years later) per share BBCA shares were valued at 13125.
Types of Stocks
How To Invest In Stocks For Beginners That Are Profitable and Safe
Not many people know the details about stocks yet. Most people certainly only know the general meaning of stocks. But actually in terms of ability in claims and claim rights, types of shares can be divided into two types. The two types of shares are common stock and preferred stock. To find out more about these types of stocks, then see the explanation below:
The definition of ordinary shares is securities that serve as proof of ownership of a company. The owner of this share is entitled to receive part of the income (dividends) from the company and is willing to bear the risk of losses suffered by the company. Those who own shares of the company have the right to take part in the management of the company. The amount of this portion of management rights depends on the number of shares owned. When the company is profitable, those who have a large percentage of shares will receive a large portion of the profit.
On the contrary, they are also preparing to suffer losses if the company fails to obtain revenue. Ordinary shares have several types, such as class A, class B, class C, and others. Each of the classes with its own advantages and disadvantages and letter symbols has no meaning whatsoever. Usually ordinary shares have only one type but in some cases there is more than one, depending on the needs of the company. The characteristics of ordinary shares are as follows:
Owners/shareholders have the right to vote in electing the board of commissioners.
Shareholder rights take precedence when the company issues new shares.
Shareholders have limited liability, which is the amount of shares owned.
Preferred shares are securities that prove their owners have more rights than ordinary shareholders. These shareholders are entitled to take precedence when sharing the company’s profits (dividends). Continue to also be the first in terms of repayment of the deposited capital if the company is liquidated. Preferred shares seem better than ordinary shares. But that’s not the case.
Preferred shares are not better, but only differ from ordinary shares. In reality, the best way to view preferred shares is to give up the right to own a company in order to be protected like a creditor. Preferred stock is usually referred to as mixed stock because it has almost the same characteristics as ordinary shares. The characteristics of preferred shares are as follows:
There are several levels that can be published with different characteristics.
There are bills against income and assets, and they get high priority in the distribution of dividends.
Preferred shares can be exchanged into ordinary shares through an agreement between the company and shareholders.
It turns out that stocks have not only two different types. But there are also differences when viewed in terms of trading performance. In terms of trading performance, stocks can be grouped into five types, namely:
Blue Chip Stocks, which are ordinary shares of highly reputable companies, are market leaders in similar industries, have stable incomes, and consistently pay dividends,
Income Stocks, which are shares of an issuer with the ability to pay dividends above the average dividend payment of the previous year. These types of stocks can generally provide greater income and regularly pay cash dividends.
Growth Stocks, which are well-known and little-known stocks. Well-known are stock issuers with high revenue growth, market leaders in similar industries and have a high reputation. Lesser – Known is part of an issuer that is not a market leader in its industry, but has the characteristics of a growth stock.
Speculative Stock, which is part of a company that has not been able to have regular income every year, but has the potential to have a high income in the future, although it is uncertain.
Counter Cyclical Stocks, that is, stocks that are not particularly affected by macroeconomic conditions or the general business situation. The value of these stocks can remain high during an economic recession because its issuers can earn high incomes so that they can pay high dividends.
How To Invest In Stocks For Beginners
After reading and understanding the explanation of the meaning and types of stocks above, of course, you already understand better and are more interested in trying it. There is nothing wrong with trying to invest in this stock, but what needs to be underlined is that you already have to understand how to invest in this stock. This is important because considering that this investment has a high risk. Here will be explained some ways to invest in stocks for beginners.
Choose Securities with Small Transaction Fees
In stock investing, investors are required to open a securities account facilitated by a securities company. After the account has been created, the next investor must top-up some funds to the securities account. It is the money in the securities account that later functions like e-money. It is this money that investors use to buy the desired online stocks. So, the transaction fee in question is the cost of buying and selling shares.
This fee will be the profit of the brokerage company concerned. Usually the cost of securities is set to 0.19% for purchases and 0.29% for sales. But there are also those that are only 0.15% for purchases and 0.20% for sales. If the cost is getting smaller, then investors will also benefit, right? But that doesn’t mean that the large cost ones aren’t worth choosing. It could be that the service to customers is actually better and the application is also good. After you already know which securities you are going to, just prepare the relevant documents to open an account.
Create a Stock Account Before Buying Shares
Before investing in stocks, you must understand how to buy shares on the Indonesian stock exchange. You must first create a securities/stock account before starting stock investment. Creating this stock account can be done online. You need to know that opening a stock account is not done on the Indonesia Stock Exchange but in a securities company (you can choose the securities company yourself).
How to create a stock account:
The opening of a stock account is carried out to a securities company (brokerage company or a stock brokerage company).
Choose credible securities, namely having a license as a Securities Trader Intermediary (PPE) or Securities Trader Intermediary Representative (WPPE) from the Financial Services Authority (OJK) and listed on the Indonesia Stock Exchange (IDX).
Technically, opening a stock account is similar to opening a savings account. Next, fill in the stock account opening form at the securities company you choose.
Creating a stock account can also be done through the securities company application you choose and generally now you only scan or take photos of documents, without the need to attach physical documents.
Once done, you will be asked to deposit an initial deposit. The amount of this initial deposit varies and this money will go to the investor’s Investor Fund Account (RDI).
You will be prompted to create an RDI. Make it free and can be done online as well. Remember yes, this Investor Fund Account is different in function from a personal bank account. Its function is specifically to facilitate buying and selling transactions in the capital market.
An RDI is an account in a bank in the name of an investor that is separate from a securities account (in the name of securities). For this account, there is no monthly fee. Examples of banks that facilitate RDI are BCA, BCA Syariah, Mandiri, CIMB and Permata.
Then, if the RDI is finished. You can start depositing money. The initial balance of the RDI generally varies depending on the security you choose. Generally, RDI balances start from the cheapest IDR 100,000,-, IDR 1 million, IDR 3 million, IDR 5 million, and so on.
Know that stock buying and selling transactions are carried out through an intermediary called a securities company. Once the stock account is active, you can start buying the stocks you want.
Feel free to consult or ask questions with your securities. Be active in seeking information and studying the stocks of companies that have good prospects for collection in your investment portfolio.
Start With Not Too Big Capital
If you are not very familiar with the stock market, it is advisable to start with minimal capital first. The goal is that if you make a misstep, the loss suffered is not too great. Another purpose is for the learning process. You need to familiarize yourself with the software to buy and sell stocks, learn stock analysis and so on and all that takes time.
Royal May but Don’t Let It Go Too Far
There are some shares that are only sold at a price of Rp. 50 silver per share. In stock investments you can only buy in units of lots, where one lot consists of 100 shares. Well, if you buy one lot of shares at a price per share of only IDR 50 silver, it means that you only need to pay IDR 5000 you have successfully owned your own shares. But what is the profit you can be satisfactory if you only invest with too little value.
If you want to get a decent profit, at least ‘decent’ means that you have to buy stocks at an even more expensive price. No need to be expensive, just choose the one according to your ability. The formula is to set a profit of at least 1% of the funds you spend to buy stocks. For example, IDR 5 million for 1% profit worth IDR 50 thousand. If the profit you get can be up to 10% every share price rises you can get at least up to IDR 500 thousand for free.
Select stocks in the LQ45 or IDX30 index
The stock index issued by the Indonesia Stock Exchange is actually a statistical measure of changes in price movements of a group of stocks, which are selected based on certain criteria. Well, right in April 2019, there were 22 stock indices on the IDX. So you don’t get confused, just choose the stocks that are included in the LQ45 or IDX30 index.
Don’t worry, the stocks in the index mostly have very high liquidity. In addition, the listed companies are also companies with a well-valued background and fundamentals. So for those of you who are still very new to the world of stocks, instead of worrying about where to buy stocks that are safe you can have in both indices.
Perform Technical Analysis
As an investor, you need to learn how to do a simple technical analysis of the stocks you choose. The goal is to make the stocks you buy have the best buy and sell prices. Also observe the movement of the stock price by looking at the stock price chart. This will affect the decision of the sale or buy transaction, if the stock price of the company you are after is cheap, and you believe the stock has good prospects later, then this is the right timing or time to buy it.
Understand The External Risks of Stocks
In addition to internal factors, investment in the capital market is also influenced by external risks. The value of your investment in the capital market can rise or fall due to external factors, among others, domestic economic conditions (economic slowdown or economic acceleration), global economic conditions, stability of domestic political conditions, the influence of the rupiah exchange rate on the United States dollar, government policies and so on.
Also understand that the Covid-19 pandemic is an external risk that can make stock prices rise and fall. You don’t need to panic if your stock price drops drastically. In response to this, it is hoped that you will remain calm but do a strategy. For example, evaluate the performance of stocks that have been purchased and keep investing by buying good-performing stocks at a discounted price.
Choose a Long-Term Investment
Investing in stocks with the long term is safer and more profitable. In addition, as mentioned earlier stock investment will be more profitable if it is treated like saving with more profits. With this concept, at least the dream of living comfortably with stable finances in 10-15 years can then be realized or other things that want to be realized.
In addition, long-term investments also have lower risks and by choosing the right company, the profit that can be obtained can reach not only 100% but also many times over. For example, you plant shares of IDR 5 million, 10 years later if the company you buy has bright business prospects and is super successful, your investment value will not only change to IDR 10 million (100% profit) but can become IDR 50 million or even IDR 100 million. So the key is to be patient and patient if you want to get this many times the profit.
Conclusion and Conclusion
Investing in this stock requires a lot of precision to get started. Before you buy a stock, learn a simple fundamental analysis of the condition of the stock company you choose. Perform simple monitoring such as reading news related to the company. The purpose of monitoring is to see whether the company is growing and developing healthily and reaping profits or vice versa. In addition, also pay attention to other news such as the company’s business plan, whether the company has plans for business expansion, acquisition of new companies, or otherwise has plans for business reduction or shrinkage.
Also learn about the performance of stock companies that have been listed on the Indonesia Stock Exchange (IDX). You can get a lot of information from the IDX website about company prospectuses, company profiles, financial reports, to other capital market news. Know the development of the stock of the company you choose so that the stock investment returns can be maximized and you don’t buy the wrong stock. If the company has a good business plan and is growing healthy, then its shares will also experience the same thing and are worth buying for investment.