A stock is one of the most favorite types of investments because investing in stocks is believed to provide favorable returns. According to Husnan (1998) "stock exchange is a company whose main services are securities trading activities in the secondary market". Meanwhile, according to Darmadji and Fakhrudin (2011) stocks are defined as a sign of the participation or ownership of a company or limited liability company.
Based on the definitions, when an investor buys stock of a company, it means he/she has owned the company. So, this essay will explain several reasons why stocks become a favorite investment for investors and how to make an investment in stock.
There are several reasons why stocks become a favorite investment for investors, (Wira, 2015, P.78). First, stocks are very easy to transact. If we compare with some other investments, investors need to bring certificates and real objects for sale, and some even need a letter of agreement by hiring a notary, for example, land investment. Second, shares are liquid and transparent. Liquid means easy to sell. So, if the investor needs money, this stock is easy to sell.
Transparent means investors can see clearly how the price of demand and supply and how many lots are offered or demanded. Third, capital investment is relatively small. There is a growing assumption in the community that investing in shares is just for a rich person because to invest requires a large capital. This assumption is incorrect, the fact is that stock investment is the type of investment with the most affordable capital.
Fourth, investment in stock is safe. Investing in stock is one of the safe alternatives because the government provides some protection to investors. Protection here means protection of investor funds and protection of shares owned. From the several explanations above is expected can encourage investors to invest in stocks.
After knowing some of the reasons why stock can be a favorite investment, there are a few steps for investors to invest in stocks (Tim Wesfix, 2015, P.152). First, recognize the benefits of stock investment. Before investing, we must first recognize the profits we can get when we have invested in the stock. Second, we should have knowledge before investing.
Before investing, investors are obliged to learn the ins and outs of stock investment by looking at the official web at www.idx.co.id for example. Third, preparing the capital. Before we invest in stock we also have to prepare capital for buying shares on the stock exchange. Fourth, choose a broker and open a securities account.
In order to transact on the stock exchange, of course, investors should choose a broker that is the member of the stock exchange that connects investors with the stock exchange or investors with other investors. In addition to choosing brokers, investors must also have an account first. Fifth, investors should see stocks based on their market capitalization.
Market capitalization shows the price of a company that can be calculated from the share price multiplied by the number of shares. And the last investor can make a stock investment by doing the calculations of fundamental analysis of its shares with some financial ratios to assess the shares are worth buying or not. The explanation of the investment step is expected to be a guide when investors will start investing in shares.
So it can be concluded that before investing in stock we must pay attention to the reasons why stock investments can be very beneficial. After that, an investor needs to know and learn the steps how to invest in the stock. Of course, to start the first step, either in any case will be more difficult, but bravely trying the steps will lead to the goal.
Darmadji, dan Fakhrudin. 2011. Pasar Modal di Indonesia. Edisi Ketiga. Jakarta: Salemba Empat.
Husnan, Suad. 1998. Struktur Modal Pada Perusahaan Manufaktur di Bursa Efek. Jakarta: Erlangga.
Wira, Desmond. 2015. Memulai Investasi Saham. Jakarta: Exceed.
Tim Wesfix. 2015. Investasiitu "dipraktekin". Jakarta: PT Gramedia.