Advantages of Stock Investing and Stock Investment Tips for Beginners

stock investment

Advantages of Stock Investing

Recently, stocks have become an increasingly popular investment instrument and are starting to be liked by the public. This is of course inseparable from the increasing awareness of the public that saving money in savings is not enough. Just try to deposit $ 100 per month into your savings account for 12 months. Not necessarily at the end of the year, the total will be more than $ 120. Usually, because administrative costs are cut, the money that was expected to grow is reduced.

No wonder the people who are getting smarter and more literate in investment are experiencing a shift in lifestyle. The people's lifestyle in terms of financial management has gradually changed from "Saving Society" to "Investing Society". The following is a review of the 3 advantages of investing in stocks that you can get.

1. Getting Potential Capital Gains

One of the benefits of investing in stocks that you can get is gain. As a company develops over time, it will usually be followed by an increase in the company's share price. You can use this increase in price to sell shares at a price that is certainly higher than the purchase price. This profit from the difference in buying and selling prices is what is known as a capital gain.

Just start with a small capital first, you can invest in stocks. Over time, you can get higher and higher returns by choosing the right stocks.

2. Get Stock Dividends

Another benefit that you will get when investing in stocks is receiving dividends. The dividend is a distribution of profit for shareholders by the number of shares owned. When you get dividends, you are indirectly recognized as the owner of the company and are entitled to participate in the General Meeting of Shareholders (GMS). 

Dividends will be distributed evenly according to the shares owned. So, the more shares you have, the more dividend value you will get if the company pays dividends. However, dividends will only be given if the company whose shares you own gets a profit and when the majority of the shareholders agree on dividend distribution.

3. Invest Flexibly

You don't need to waste time and energy in investing because you can do stock investment anytime and anywhere by using the Trade online trading application on your smartphone. Thus, you also don't have to neglect your main job. You also don't have to always pay attention to your stock investment chart. You can set a certain price, so the system will work automatically to buy certain stocks or sell stocks in your portfolio. Your time will not be wasted on placing buy or sell orders thanks to the sophisticated Trade system!

Stock Investment Tips for Beginners

Stock investment is increasingly recognized by various groups, including today's young people. Apart from the easier online transactions, it is undeniable that the potential for high returns is its main attraction. Investing in stocks can be said to be tricky. To become more skilled at investing in stocks, you can try the following 3 tips!

1. Do Not Put All Eggs In One Basket

Putting all the eggs you have in one basket can cause them to break if the basket is dropped. When you invest, don't put all of your capital in just one investment. Allocate your funds across multiple investments. Your diversification will protect you. Imagine if one investment is down, at least you still have another positive investment. When you need money, you can withdraw investments that give positive returns first.

By diversifying, you can optimize profits and minimize market risk. Diversification is very useful for maintaining the stability of your assets. You can choose three types of blue-chip stocks in different sectors, for example, banking, consumption, and energy. When interest rate sentiment affects the movement of banking stocks, you can still breathe a sigh of relief because the consumption stocks you own are still safe.

2. Cultivate Commitment in Yourself

Know that investing in stocks is not all about skill, but also about the importance of keeping your spirit consistent. Like planting seeds, you need to be diligent in watering regularly so that the seeds can grow into shoots, then become fruitful plants. The growth process also doesn't happen overnight, right? Everything has a process.

You have to be patient and consistent in studying the stocks that you can choose, then buy and monitor their movements. Determine the period of your investment first. If you are a beginner, you should invest long-term in big-cap stocks whose performance is quite stable. Usually, the "fruit" comes from the "seeds" you sow after a few years, from the dividends that were distributed to shareholders as well as the capital gains you earned when you sold your shares.

3. Don't Buy a Cat in a Sack

Investment is not speculation! Don't guess the mangosteen fruit. Like building a business, you must research whether the potential business you want to choose is good in the future. The performance of a company in the future is usually reflected in the movement of its shares. The more confident investors are in stock, the stock price usually tends to rise.

Don't buy stocks just because you're in a part. Learn about the company's activities and financial performance over the last few years. If the management of the company is good, the liquidity of the shares is also maintained, there is no need to hesitate to invest your hard work in these shares. It is better to buy shares in a healthy company with more equity value than debt value. You will also be more confident to invest and reap the rewards in the future.

Even though it is not always absolute, these three tips will certainly help you to become more adept at investing in stocks. As the saying goes, practice makes perfect!

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