Skip to main content

Advantages and Risks of Stock Investment

Stocks can be said to be a popular investment product today along with the increasing awareness of the public that saving money in savings does not bring added value to the money they have. This awareness has also triggered a shift in people's lifestyle in financial management from the "Saving Society" to the "Investment Society".

Advantages and Risks of Stock Investment

Indeed, stocks are the most profitable investment product compared to other financial products such as deposits, mutual funds and bonds, or commodity products such as gold, land, and even forex. Imagine that in a period of 10 years, our JCI generated a yield of 398%, the highest in the world.

However, when talking about investment products, whatever it is, then we must remember a rule that the higher the potential profit generated by an investment product, the higher the potential risk faced. High Return, High Risk.

If there is an investment product that offers high returns without risk, it is certain that it is a fraudulent investment. Stock investment is not a fake investment. Share transactions are carried out on the Indonesia Stock Exchange (IDX) and are directly supervised by the Financial Services Authority (OJK). Even in stock trading, there are actually various risks (potential losses) that we should know about. What are the pros and cons of stock trading?

Advantages of Stock Trading:

Has the right to participate in the GMS and is recognized as the owner of the company.

Owning shares means we own a company where as owners we have an obligation to determine the company's leadership and corporate strategy carried out at the General Meeting of Shareholders (GMS), also entitled to the profits generated by the company, this benefit is called dividends.

Has the right to receive dividends from every share owned.

Dividends are distributed evenly among all shareholders according to the shares owned. The more shares you own, the greater the total dividend you will get. However, dividends will only be distributed when the company whose shares we own get a profit and in the GMS the majority of shareholders agree on dividend distribution.

Potential gain from the difference between the buying and selling prices.

The more profitable the company is from time to time, the more its share price tends to rise. This increase in price is often used by trades to sell the stock at a higher price than the previous purchase price, so that the trade benefits from the difference between buying and selling prices, this is what is called a gain.

Stock Trading Risks:

Not getting dividends.

But what if the company loses? This is one of the risks of owning shares, that is, the company does not pay dividends due to losses. Losses will not be distributed to shareholders like dividends, but losses will erode capital which ultimately has a negative impact on the company's financial condition.

Potential loss from the difference between the selling and buying prices.

If so, what happens to the stock price? There is a possibility that the share price will decrease because the company's business performance is not good. A decline in stock prices will be the second risk in stock trading, when we sell a stock because of its poor business performance at a price lower than the previous purchase price of the stock. This is called loss.

The company went bankrupt and received the share of the liquidation last time.

What happens if one company incurs losses from time to time? There is a possibility that the company will go bankrupt. Bankruptcy is the worst risk for shareholders, because as owners of shareholders have the last rights after the company is liquidated and the proceeds are used to pay taxes, employee salaries and debts.

So, by knowing the risks and advantages of stock trading, the trader must be wise in choosing which stocks to buy properly, not to buy a stock which actually gives a continuous loss.

Comments

Popular posts from this blog

Knee Pain and Pain in the Legs? Do not underestimate and can be fatal!

Get Link Some people must have experienced pain or tenderness in the joint area, especially in the knee. But many people still underestimate and ignore this pain. In fact, if you underestimate it for a long time, the condition can get worse which later makes the treatment or management of the disorder more difficult. Orthopedic and Traumatology specialist at Siloam Hospitals Balikpapan, dr Hedy Wahyu Ramadhani SpOT, explained that there are various causes of knee pain. These include trauma, injury, infection, and inflammatory diseases. '' In addition, obesity or obesity can also trigger pain in the knee area. However, the most common thing is due to osteoatritis, "he said in a release statement. Keep in mind, osteoarthritis is one of the most common types of arthritis. The sign is when the joints feel sore, stiff and swell occurs. This disease, also known as chronic degenerative disease, is commonly found in elderly patients. Because as we get older, the bones in t

Keeps Blood Sugar Not Low or High

Human sugar levels are sometimes too high or too low, both of which are not good for health. Sugar levels must be maintained in a normal position to keep the body healthy. How to keep blood sugar from high or low? Blood sugar in medical terms is known as glucose. This sugar in the blood is needed because it becomes a source of energy for the body's cells. As reported by Buzzle, Sunday (4/7/2010) the average normal blood glucose level in humans is 70 mg / dl to 120 mg / dl and will usually increase after eating. Blood sugar is still considered normal if after eating the number is still below 220 mg / dl. If the blood sugar is below 60 mg / dl, hypoglycemia or low sugar levels will occur. Conversely, if it exceeds 225 mg / dl, hyperglycemia or high blood sugar will occur. Blood sugar that is too low can cause a person to go into a coma (loss of consciousness). Signs of low blood sugar are fatigue, decreased mental function, trembling feelings, sweating, sore mouth, dizziness, confusi

NOSO (NOS) New Cryptocurrency!

This is an unofficial blog to explain about a cryptocurrency called NOSO or with the crypto code abbreviated as NOS. So much we see different types of cryptocurrencies emerging. Most of them collapsed and were unable to compete with others. However, unlike NOSO, this currency is completely new and is very well developed by a very enthusiastic developer who works day and night to keep NOSO getting better. How did the story start...? According to the developer through his blog nicknamed " Kreditzcoin " on the Bitcointalk site , they have started to create a new cryptocurrency project more than two years ago. But for personal reasons, they canceled it and returned all investors' funds. Until December 20, this project was revived with another name but still by the same developer and equipped with new features. About Noso According to literacy on the developer blog here, they are a small group of software builders who have developed completely new cryptocurrencies from scratc