Buying and selling stocks has become increasingly popular among the general public in recent years. This is because this instrument is considered to be one of the ways to achieve financial freedom through passive income.
Stocks have become one of the most attractive investment instruments due to their relatively high return potential compared to just keeping money in savings. Although it looks promising, activities in the stock market cannot be done carelessly.
You must not forget the principle of high risk, high return that needs to be understood before actually jumping into the world of buying and selling stocks. When investing, you need to realize that this instrument has a high risk but also a high return if done well.
Lack of knowledge and lack of skills is one of the main causes of investor failure in the capital market. Many stock traders in Indonesia experience losses or do not obtain optimal results due to limited understanding and ability to invest. Therefore, it is important to understand investment methods and instruments thoroughly before starting.
Share Buying and Selling Methods
Buying and selling shares is a tricky transaction that requires a thorough understanding so that potential investors do not lose money. Knowing the methods and instruments of stock investment is an important foundation for every investor in making smarter decisions, managing risks effectively, and achieving optimal investment returns in the capital market.
Here are the methods you need to know before you start investing in stocks.
Defining Securities Companies
Securities companies act as intermediaries between investors and the stock market. They facilitate the safe and regulated buying and selling of shares.
It is important to choose a securities company that is trusted and registered with the Financial Services Authority (OJK). Careful selection can also help investors make better decisions through market research services, investment advice, and portfolio management so that buying and selling shares can run smoothly for investors.
Opening a Customer Fund Account (RDN)
After choosing a securities company, the next step is to open a Customer Fund Account (RDN) through the company. Through this RDN, investors can store funds that will later be used in the stock transaction process. This account also separates the investor’s funds from the securities company’s funds so that transactions become safer and more transparent.
Deposit or Top Up to RDN
When the RDN is successfully created and active, the next step is to fill the balance into the account. Deposits can be made via bank transfer to the RDN account number provided by the securities. Make sure the deposit amount is in accordance with the minimum provisions that apply in each securities. Once the funds have been deposited, the balance will be immediately visible in the trading application.
Buy Shares
As a first step in buying shares, it is important to research and understand the company’s performance before buying its shares. For beginners, it is best to start investing gradually with small capital. Choose stocks that have strong fundamentals, good reputation, and are included in the leading stock index.
Consider buying when the stock price drops reasonably due to a market correction, not because of a decline in the company’s performance. If the financial report is stable and shows good growth potential, it can be an indication that the stock is worth buying.
Selling Shares
Investors can sell shares at any time, especially when the share price rises and has the potential to provide profits (capital gains). Conversely, selling is also done to minimize losses if the stock price continues to decline (cut loss).
In addition, it is important for investors to understand the analysis that has been done from the beginning when monitoring their stock portfolio.
Successful Investment with the Proper Understanding
Investing is now quite easy. The reason is, developing technology provides convenience through the presence of applications. This is one of the reasons more and more people are literate in investing.
This ease of investing needs to be addressed wisely, especially for novice investors. You must understand the risks and recognize the characteristics of each investment instrument, such as stocks.
The right first step will help you avoid impulsive decisions that could be detrimental in the future. With the right strategy and continued research on the companies we invest in, investors can make wiser decisions.
Investment is not only a means to gain profit, but also a strategic step in building financial strength in the future.
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