How To Invest In Stock For Newbie Investor !!

Many people are now discovering how to invest in stock because they are interested in investing in the capital market. However, many do not understand about buying and selling shares. Shares are investment instruments that are proof of ownership of a company or proof of equity participation.

A stock is an investment that is classified as high risk or high risk. However, now stock investment is increasingly being recognized by different groups, including millennial youth. As well as making transactions easier online, the potential for high returns is undeniably the main attraction.

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Almost 100% of the entire stock investment process is done online. Therefore, if you want to know how to invest in stock. Start by learning how to use the online stock trading application properly first. Because, there is a demo account that you can use to practice first.

Benefits of Invest In Stock

Investors’ stock investment success stories can serve as an example for you in learning how to invest in stock properly. Also, make sure you understand the benefits and risks. The following is a review of the benefits of investing in stocks:

1. Dividend

Dividends are the distribution of profit or gain to us as shareholders. Dividends are usually distributed quarterly, or may be distributed annually. The amount depends on the company’s own policy.

There are two types of dividends, cash dividends and stock dividends:

  • A cash dividend means that the company provides cash for each share to shareholders
  • A stock dividend means that the dividend given by the company is in the form of shares, so the number of shares that investors own will increase.

2. Capital Gains

Capital gains are an increase in the value or price of a stock. You can only get this benefit when the shares you hold are sold, at a higher price than the price when you bought them. The difference between them and that is your advantage.

3. Share Ownership Rights

By learning how to invest in stock, you will understand that. When you buy shares, you become part of one of the owners of the business. Shareholders also have the right to attend the General Meeting of Shareholders (GMS).

4. Transparent Information Reporting

Control and regulation in the stock market is done correctly and transparently. Starting from the assessment, valuation, to financial reports.

How to Invest In Stock For Bbeginners

These days everything has become easier with the presence of the internet. Many activities can now be done using a smart phone, one of which is buying shares. There are six steps you must take when you want to buy shares as long-term investment capital. Here are the steps:

1. Decide on The Securities Company

The first thing in learning how to invest in stock is to decide which securities company you are dealing with. Securities companies are intermediaries for buying and selling shares of shares and assisting the process of opening accounts on the Stock Exchange.

2. Open a Customer Fund Account

A customer fund account or RDN is an account that investors own to make buying and selling transactions in the capital market.

3. Select Stock

After getting an RDN, you can choose the shares you want to buy immediately. To select the shares, you can use the securities application. However, before deciding to buy shares from a company, make sure you read the financial statements and other matters related to the company’s performance.

Stocks used for long-term investments should be carefully considered. Buy stocks from companies with good fundamentals. How to invest in stock for beginners, you can buy blue chip stocks or stocks owned by companies with a good reputation or track record.

This type of stock tends to increase in value from year to year, so it is suitable for long-term investment. If you are sure of the stock, you can buy it immediately.

4. Watch The Market

After performing the steps on how to buy shares, you can then monitor the market conditions from time to time. There is no need to check the portfolio every day, but just monitor it from social media or other media that review stock prices every day.

You can increase the shares you hold by buying them when the market value is down, so you can get big profits in the future. How to invest in stock is to monitor market conditions, this is a step you must take, before buying company shares.

5. Stock Transactions

It should be noted that the stock market only serves buying and selling from Monday to Friday. Session I went from 09.00 to 12.00. Meanwhile, session II will be held from 13.30 to 16.00, only when Friday starts at 14.00.

There are several terms you should know when you start learning how to invest in stocks. You will see this term in stock trading applications, as follows:

a. Buying and Selling

Obviously, you use this menu to buy or sell shares. Whether you are selling or buying, you will be asked to enter the number of lots you want to sell and the price. If you want to buy at a price lower than the current market price, enter the nominal price in the column.

Likewise if you want to sell it at the market price. When there are other investors who buy or sell your target stock at the price you specify, then the stock goes directly into your portfolio.

b. Bid and Offer

In stock transactions there are bid and offer terms. These two positions look slightly below the company’s stock price, and are in column form. Stock transactions are similar to market transactions. The market price is listed above, but many sellers charge high prices.

And buyers who want to bargain for a low price. If you really want to wait and buy at a low price, your bid price will go into the bid column. In the meantime, if you want to get the shares immediately, buy them at the price listed in the offer column.

6. Settlement

Settlement of transactions on the exchange is T+2. This means that when you sell shares, within two days of the transaction, the securities will transfer the money to RDN. If the money is already in RDN, it can be withdrawn to a personal account.

Steps in Stock Investment

After understanding the benefits of investing in stocks to how to invest in stocks, the next step is investing. Well, the investment has stages too, you know. Not just analysis, buy the stock, and then wait for the price to rise.

1. Decide on your investment goals

The first is to determine the purpose of this stock investment. What are the benefits for, whether to save a pension fund, for education, or to buy a house, even to host a wedding or something else. When the goal is known, your investment period will be automatically seen.

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Whether the investment is for the long term (10 to 20 years), short term (one to three years, or medium term (three to five years), this is the right way how to invest in stock, which is to decide on your investment.goals.

2. Stock performance analysis

After knowing the goal, do an analysis of the stocks you have previously targeted. Perform fundamental analysis, also using the market value method by comparing the stock with its competitors in the same industry.

Although technical analysis is closely related to traders, it does not mean that investors do not need to do this analysis. Sure, investors can use technical analysis to get stocks with the best prices. Do not be lazy to do this analysis.

3. Form a stock portfolio

The next way how to invest in stock is to manage your stock investment portfolio. For example, 50 percent of capital is invested in the consumer goods sector, 30 percent in banking, and 20 percent in commodities. Try to diversify based on the company’s industry.

But also make sure you don’t collect too many or too few publishers. Five publishers is big enough. When it is not enough, the investment risk is great. But if it is too much then the benefits you get will not be maximized.

4. Evaluate portfolio performance

Conduct regular appraisals of the stocks in your portfolio. Read the news diligently, so you can be more up-to-date in responding to the latest trends in the related industry. When the performance of some of the stocks you collect weakens, do an analysis. If possible, replace the shares with shares in other sectors.

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