13 Most Basic Stock Investment Terms That Must Be Understood First

Stock Investment

One of the most important things to do when starting to do an activity or acquaintance with something (or someone), is trying to understand it from the easiest or the most basic thing. Including when we want to start investing in stocks. Apart from getting to know some basic things about stocks as described in this article, it's also a good idea to get to know some stock investment terms that will often be found when we actually dive into the investment pool.

Why should?

Yes, so that you don't understand and understand what is being discussed. Can you imagine it, read on, there are the words issuers, capital loss, capital gains, and so on, then we wonder, "Ha? What is that?"

So, there are many stock investment terms that will only be encountered when we really persevere here. If everything was written down, it wouldn't be finished overnight. But at the very least, start from understanding some of the following stock investment terms, and then we can get acquainted with others as we go along.

13 Stock Investment Terms That Must Be Understood First

1. Emiten

Emiten is a business entity (government) that issues valuable paper for sale.

But, if you look again, now the term stock investment is not only to refer to a government business entity but can be used to describe all types of companies that trade their shares on the stock exchange.

2. Blue chip stocks

Blue-chip stocks are shares of companies that are well-established and have a solid business position. They have accountable financial reports, have good business development, and are believed to be the “rulers” in certain sectors according to their business concepts.

Blue-chip stocks usually have a price that tends to be more stable, which has a tendency for the graph to continue to increase. Blue-chip stocks are very suitable for collection by those of us who are just starting to invest in stocks, or those of us who want to invest to achieve certain financial goals.

3. Stock exchange

The stock exchange is a place for trading stocks.

If you want to monitor the movement of shares, you don't have to be tired of coming to the building right now. Just monitor it online on the site.

4. Capital gain

This one stock investment term is called when we get a profit from the difference between the selling price and the buying price of the shares that we do.

5. Capital loss

If there is gain, then usually there is also loss. There is capital gain, there is also capital loss. This next stock investment term - you can guess - means the opposite of capital gains. Yep, this means we suffer losses due to the difference between the selling price and the buying price of the shares that we do.

6. Cut loss

There is one principle in stock investing that must be understood: we haven't lost as long as we haven't sold our shares.

That is, sometimes investors persist in collecting certain stocks even though the share price has fallen. Hopefully, in the future, the price can go up again. But there are times when investors have to cut losses - sell the entire stock when the price drops to prevent even greater losses from occurring.

Usually, this happens when investors don't find any hope for their shares to go up in price again with a lot of analysis and consideration

7. IPO

It stands for Initial Public Offering.

IPO is the process for the first time a share sale and purchase occurs between the company and the public. For this reason, companies that first release shares to be purchased by the public or general investors are often called going public.

8. Custodian

Or a custodian bank. The term stock investment is used to refer to the banks appointed to assist the administration in investment activities, as custodians of our assets.

For example like this. We want to invest in stocks and are registered in a securities company. To be able to buy shares, we must first deposit it in a bank designated by the securities company, then our funds will be spent on shares according to our choice. Likewise when we want to sell shares. The money from the sale will be deposited in the custodian bank, then transferred to our personal account upon request.

9. Lot

Lot is a unit of share that is traded on the stock exchange. One lot consists of 100 shares. Usually, the minimum number of shares purchased is one lot. So, for example, a share price of $ 1 / share, then at least we have to buy 1 lot at a price of $ 100.

10. Securities companies

A securities company is a company that has obtained an official permit to become an intermediary in share transactions. Securities companies will arguably be our partners in investing, so it is important to be able to choose a trusted securities company.

11. Dividends

It seems that the eleventh stock investment term is quite familiar. According to the Big Indonesian Dictionary (again), dividend means:

A share of the company's profit or income, the amount of which is determined by the board of directors and approved by the shareholders meeting to be distributed to the shareholders.
An amount of money that comes from the profits paid to the shareholders of a company.
Isn't that clear? I don't need to explain much more, I think.

This dividend is usually distributed annually, the schedule depends on the respective company. Usually calculated in a number of rupiah per share. So just multiply it by how many lots we have shares in the company.

However, not every company distributes its dividends on a regular basis. It all depends on the shareholder meeting.

12. Fundamental analysis

The term stock investment is related to the analysis of potential investors towards issuers before investing.

It is an analytical method that studies things related to the basic conditions (fundamentals) of a company, both quantitatively (financially) and qualitatively (non-financial).

If you want a more detailed explanation, you can read articles on fundamental analysis that are also on this site.

13. Technical analysis

Technical analysis is a price analysis approach that studies market activity using historical price data including price charts that have occurred in the past to predict and anticipate future price movements.

How to do it? You can just read the linked article.

Well, it looks like the introductory event to stock investing is quite a bit, with acquaintances with some of the terms stock investment that will be encountered later.

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