Currently there are many investment instruments provided, one of them is stocks. In Indonesia, there were two reference exchanges, namely the Jakarta Stock Exchange and the Surabaya Stock Exchange, before being merged into the Indonesia Stock Exchange (IDX). Another name that is often used is the Composite Stock Price Index (IHSG) which refers to the daily value on the stock exchange.
What will be discussed here is not the mechanism of stock movements, because it will be very complicated. However, what will be discussed is how we, as ordinary people, can participate in stock transactions. Why do you need to invest in stocks market? There are many reasons:
- Dividends, companies that make profits will distribute dividends to their shareholders.
- As consumers of products sold in the market, we certainly do not want to forever be consumers in the distribution chain. We also have to be creative and buy shares of companies that we often use products for and assume it as the company’s “paid back fees” to us.
- Potential gains from rising share prices. At present, the market value of all members of the Indonesia Stock Exchange is more than IDR 4,000 trillion! Imagine that much money only revolving in the small scope of the stock exchange. Like fishing, it is thousands of fish gathered in a small pond. We just have to prepare the right hook and bait.
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And many other reasons, such as investing for the long term, preparing for old age and retirement. But unfortunately, according to the latest study, only 1% of Indonesia’s population knows and transacts in shares. This is still a huge potential, especially in terms of market liquidity and the number of investors.
Of course we think, “How can I do stock transactions, I’m just ordinary people and small income?” The answer is, you can. Investing in the stock market now is not as complex as in the past and must have a large capital. Only with IDR 100,000 you can invest in shares. Moreover, the IDX has reduced the value of 1 lot to 100 shares from 500 shares, making it more affordable for the public and retail investors.
Then, how to do it? The first thing to prepare is KTP and NPWP. We recommend using a personal NPWP and not a company, then follow the steps below:
- Go to the securities office. Securities is a company that facilitates customers to the stock market. These securities are divided into two, owned by banks or private companies. Bank-owned securities are usually located at the provincial bank’s headquarters.
- Ask the clerk to help open a securities account. Officers will usually ask for KTP and NPWP. If you go to bank securities, you should also include your savings book to record your account number.
- The security officer will ask you to fill out the registration form. Fill it correctly and don’t make it wrong.
- After all procedures are done, the securities will issue a new account, which is usually a current account as your intermediary account. For some banks, this checking account can be seen in the mobile banking or internet banking features together with the customer’s general account.
- Usually, a stock account is active immediately if you register before 13:00. But there are also those who wait a few days because the documents must be sent to the central office. At the same time, usually securities will provide portals for stock trading, both on computers and on mobile phones.
- After that, you will receive an e-mail notification for opening a stock account, you can start making stock investments. Steps: a) Determine the shares to be purchased and the amount. b) Make sure there are enough funds in the stock account. c) If there are insufficient funds, you should immediately transfer the shortfall to the checking account, the securities will later take the remaining shortages directly from the checking account. d) Transactions will be processed no later than two days from the date of the transaction, but don’t worry because the price used is the price at the time of the transaction.
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The tips for stock trading for beginners are:
- Do not be greedy, the stock market is not magic that can generate multiplied profits overnight.
- Read a lot and take part in training about stocks. The main reading is the company’s financial statements and also the analysis and performance of companies on the exchange.
- Choose stocks that are familiar and liquid, usually these shares are incorporated in the LQ45 index.
- Start with a small lot first, to familiarize yourself with the rhythm in the stock market.
- Once you feel that you are experienced enough, you can increase your equity participation and enjoy the benefits of dividends and increase the price of the shares you buy.
The more millennials who try to invest in the stock market, the more likely the stock price will go up. Why? Because the money that comes in will make the stock hunted, while the number of shares does not change (unless a company splits stock values) that makes the value of the stock continue to grow. Especially if the stock is a favorite stock and is busy trading, the speed of the rise can be exponential in just one year.
Common terms on the stock market include:
- Dividend, is the distribution of company profits to shareholders
- Capital gain, an increase in the value of stock prices
- Long, investors buy position on a stock
- Short, investors sell position on a stock
- Window Dressing, the issuer’s activities beautify the financial statements by carrying out various policies, so that it looks to get a profit or get a bigger profit
- Stock Split, the activity of stock exchange companies to split the value of their shares, either because they are considered to be too expensive or to add liquidity to the market.
And various other terms that may exist in the stock market. The slight difference between the stock market and the forex market is the benefits of the stock market can only be with an increase in stock prices. Meanwhile in the forex market, profits can be obtained either if a currency goes up in value or goes down in value. Short selling activities are mostly restricted or even banned on the stock market, because it can cause panic as happened in previous crisis.
Investments in the stock market should be done early and carried out routinely. The accumulation of shares that we have after a few years will show good results if we really choose stocks, be patient and persevere in investing in shares. For example, the movement of the shares of Bank Rakyat Indonesia (BBRI) in the period January 2019 – April 2019 has gone up 30%, of course this is higher than if we deposit money in the same bank in the same period. Amazing isn’t it?
Of course, the target in the stock market should be long-term and do not expect profit quickly. With the same case example, BRI shares have increased almost 10 times over the past 5 years, you can imagine how much profit from capital gains are obtained and not including the distribution of dividends made four times a year. In fact, some issuers have increased more dramatically, such as CPFA shares which have increased 100-fold in 10 years! Very extraordinary is not it? So, are you ready to invest in the stock market?