Profitable Stock Investment For Beginners

Although stock investment has the potential to generate profits many times over, the risks that tend to be high make many people hesitate to do so, especially beginners. Not infrequently many beginners prefer to start small investments first, such as gold or mutual funds, in order to avoid big risks. In fact, if we study it deeper, you can find out a myriad of tips or ways to invest in stocks that are profitable and low risk. If not, maybe your thoughts will soon change when you finish reading this one article. Because, on this occasion we will discuss tips and tricks on how to invest in profitable stocks for beginners along with complete guidelines.
Stock investment at a glance
In essence, stock investment is an investment activity or purchase of shares in a company. Surely we all already know that capital is the main key in running a business. Well, stock investment can be said to be similar to starting the business.
It’s just that, in this case we don’t start from scratch, but contribute to investing in companies that already exist or have been formed. How to invest? Namely by buying shares of the company we want. When you buy shares, you indirectly become the owner of the company and are entitled to a share of the profits that will be obtained by the company.
However, it should be noted that not all companies currently sell their shares to the public. But only companies that are already listed on the Indonesia Stock Exchange (IDX). Basically, the IDX has a function as a mall that provides a place for investors to transact buying and selling shares. Before we start with other discussions about how to invest in profitable stocks, it’s a good idea to know a few things about stock investing first.
What is the target of investing in stocks?
Before deciding to choose a stock as an investment instrument, you must first make sure your goal is to invest in the stock. Actually this does not only apply when you want to invest in stocks, but also for other investment instruments.
By knowing your investment goals, you will have the motivation to be more enthusiastic about investing and know what steps need to be taken next to meet these goals, as well as the target. In addition, goals and targets also need to be owned so that the investment you run is more focused and clear.
How long do you want to invest in stocks?
In stock investing, there are two types of investments that you can choose, namely short-term investments and long-term investments. For short-term investments, you need to pay attention to a fixed time to buy and sell the stock. Having a system that is not much different from investing in gold, one of the profitable stock investment tricks is when you buy when the price is not too expensive and sell it back when the price is soaring high. As for long-term investments, you can focus more on the shares to be bought and sold and at what price range the shares will be bought and resold. Well, if you want a profitable stock investment, it’s better if you choose a long term, because the results of that investment will be much more pronounced.
Adjust with capital
One of the laws of investment that everyone needs to know is that the higher the profit, the higher the risk that must be faced. Therefore, you must be good at measuring your abilities.
For beginners, it will feel safer if you start investing from small capital first. Do not make rash decisions and do it with careful planning and ready to face various risks that can occur.
Prepare capital
After having a careful plan by considering various possible risks, then the next step you have to do is prepare capital.
Surely some of you will ask, about how much capital is needed to produce a profitable stock investment? Not too big. The minimum capital you need to prepare is only IDR 100,000. However, don’t use this number as a reference because every company has its own requirements. In fact, there are securities companies that ask for an initial capital of IDR 5 million to IDR 10 million. Therefore, it is important for you to know or find out about which companies are incorporated in the IDX and the accompanying requirements.
Advantages of stock investment
While the advantages of investing in stocks include:
• Dividend
Dividends are profit sharing that will be given by the company to shareholders. Where the dividend itself comes from the profits obtained by a company in one year. Well, the dividend itself is divided into two types, namely cash and shares.
Cash dividends are profit sharing in the form of cash that will be given directly from the company to shareholders per one share they own. Meanwhile, stock dividends are companies that provide results in the form of shares so that the number of shares owned by investors increases. However, it should be noted that there are also companies that do not distribute dividends to investors even though they earn profits. Generally, these companies want to expand or develop their business, but this is usually done by companies that are still in the development stage.
• Capital gain (increase in share price)
Capital gain is the profit given by the company to shareholders or investors from the difference between the purchase price and the selling price. Preferably, the selling price should be higher than the purchase price.
Capital gains are generally formed due to stock exchange trading activities. It’s the same as a trader who buys bread for IDR 3000 and resells it for IDR 4000 in order to get a margin. Well, the number one thousand can be said as a capital gain.