What is the stock market? What is traded in it? Whether the stock market is legal and regulated in the legislation? This time Businessoldnet independent financial Planners will introduce capital market, a market that is trading in investment instruments.
Identify First What That Stock Market
If we hear the word capital market, surely we imagine the existence of the majestic building, which was busy with trading activities of securities, where the broker mutual trade in a precious letter.
Discussion about the capital market itself is a prestigious and discussion is a status symbol for people involved in it. In addition to picturing the activities of buying and selling brokers, we certainly envisage the existence of a large screen featuring many stock prices that are traded in real time.
So what is a stock market? In General, the capital markets (capital market) have a sense as the market that brings together the parties advantages/features of the Fund (the lenders) and the parties that require the/need of funds (the borrower’s). In short, the stock market is also similar to other markets i.e. where there are buyers and sellers.
Stock Market and instruments that are sold.
As for other capital markets which differentiate it from other types of markets is another commodity/instruments are traded.
The capital market is the scene of the long-term capital transactions, where the request is represented by the publishing company securities and supply represented by investors.
So it can be concluded the capital market is a market for various long-term financial instruments, either in the form of debt or private equity, both published by the Government or private companies.
Financial instruments that are traded in capital markets such as stocks, bonds, warrants, bonds, stocks, right, and a variety of derived products (derivatives) such as option (call or put).
Instruments are offered or traded in the capital market is an instrument in the form of securities or securities/capital markets, then the effect can be referred to with the stock exchange. Understanding the Stock Exchange itself is a marketplace where sellers and buyers meet securities/securities.
Securities investment funds, on the basic principle, is the participation of investors in the investment in the capital market which is managed by an investment manager.
5 In Stock Market Investment Restrictions, now know
Did you know that there is 5 abstinence in stock investment, either for investment or trading? What are the restrictions that meant?
The allusion you bring a vehicle then breaking traffic. This would result in things that are not good for yourself.
Refer to the discussion of stock investment in abstinence 5 in this section!
Abstinence 1: do not use the Margin
Do you know that actually, you have Your securities of margin facilities? What the hell is that margin facilities?
Suppose you have the funds for a transaction $1000, you usually have a “backup” to Transact outside of $1000 last given by Your securities.
So, the allusion You Transact, but his money is loaned by first by securities. Magnitude varies. There’s the 1/2 time ($500) to 4 times ($4000).
Have a $1000 Fund, but could use more $4000 money transactions of securities? Isn’t tempting it? But, see the first condition!
- First, you need to know that there are securities lending from the flowers, so you need to pay.
- Second, if the stock you buy using this margin rather than instead ride down, losses you have experienced even greater than it should be.
Abstinence 2: do not use the funds from the loan or Debt
Unlike the previous points. Don’t owe here that is, do not invest uses debt or loan funds of third parties.
For example, you use the loan funds from banks, debt to a debt to a friend, relative or a debt to the family. Why?
The reason is the same as the previous points, if the market is bearish (down) and your stock follow-up goes down, your losses will be greater than the supposed PLUS your relationships with friends, relatives, or your family become awful.
Invest using a debt or loan funds will also make you uncomfortable because after all, it’s not your own money.
Psychologically, because your load to restore the money, thus making you usually do the adverse decisions on your own.
One more thing, do not invest in the use of an emergency fund you. Don’t touch Your Emergency Fund. Because we never know any time we need those funds for emergencies.
So, we recommend using cold to invest money (money that does “unemployed” and can be invested).
3 abstinence: don’t buy Stock Market based on Valuations over the Projection of future Performance will come
You certainly never read reviews about the prospect of a stake in a particular newspaper. Usually there, in addition to listing the history of the company’s performance, noted also the projection of the company’s performance to come.
In an ordinary year, figures there is the letter f (future), example: 2017F, 2018F, etc. And typically, PER and PBV are also calculated based on performance. This is not true.
How might the current stock price be valuations are calculated based on performance in the future?
Who the hell is indeed valid projection name fine, meaning we are optimistic that the company through this year with good, then it is believed next year will be better. However, anything can happen.
Many of the risk factors that are usually forgotten taken into account when making projections. For example economic factors, political and social, technology, competitors, until the weather was affecting the company’s performance.
I myself prefer to use projection as consideration only, not to look at the valuation of the company.
Abstinence 4: Don’t Buy the stock market that fit into the category of Shares Fritter
What is a stock Pan? Shares of fried foods are the stock controlled by the specific airport’s movement is a wild and difficult to predict.
It is sometimes a kind of shares can rise significantly in a day, but the next day suddenly plummeted for no apparent reason. The movement is not reasonable because there are operatives in tow.
Many traders or investors who are still interested in sex, because it shares a great advantage to be gained. But on the other hand, the risk is also very large.
It is indeed tempting when you can get a profit of tens to hundreds of percent in a few weeks, but over time the price could fall back. Following the illustrations!
Have you heard from your friend shares Z up 10% from 60 to 66 today? Next, you buy shares Z last at price 66. Uh, apparently still up again so 72, you buy again at 72.
The next day is still rising well into the 80 ‘s because the last 2 x already buy and you always profit, then you’ll usually very confident. You think that this time with a buy at 80, definitely tomorrow will go up again.
You buy with all the power you have at the price of 80. Not him before the close of trading today, the price began to fall to 77.
You begin to panic. But you are still optimistic, maybe down briefly, tomorrow is also rising again. It turns out that tomorrow’s freefall to 66, back to the starting position of the first purchase, so your stocks now are in the down position.
What traits of stocks fritter?
Usually a wholly wild movement (you can see its history) without any clear pattern. Trading volume also darting suddenly at certain times (time again “fried”), but usually the stock of his small volume.
In addition, his Ascension is usually not coupled with a rise in fundamentals (financial reports is still ugly). “But it is right we can profit more quickly from stock Pack fried”.
Okay, you once or twice the profit of the stock pan, then you start an addiction and believe you will surely plunge one day.
Abstinence 5: don’t buy Stocks that are too often recommended in the Media or met by many rumors
Abstinence is actually related to the restrictions on buying shares of fried foods.
Stocks fritter last usually often preached or recommended in the media, making investors increasingly “itching” to buy the shares.
It could be, it is news or news of the order. Not all the news or information that we see in the media it is true it is.
If you buy a stock because of rumors, here you are not investing, but speculated, much less if you buy without checking the fundamentals of the stock in question.
Avoid actions that speculation could harm your investments!
Then, how can I verify if a news is true or not? You can contact the corporate secretary of the company in question, or you can check it out on the company’s website and IDX directly.