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6 Advantages of Investing in the Capital Market, Must Read for Beginners

Artikel diperbarui pada 26 Februari 2023.

Investment is a way to multiply your money. There are many tempting investment offers. Some are low risk, some are high risk. One of them is investing in the capital market. You need to find out what the benefits of investing are so you don’t regret it.

If you want to have money and fulfill your needs, work. The activity of working generates payment in the form of salary, wages in the form of money.

But if you want a lot of money, you need to learn to sell. Selling is one of the mandatory skills in business. Without sales a business cannot generate abundant cash.

Even though everything needs cash. Starting from operations, suppliers, employees all only want to receive cash. They don’t want to be paid using notes.

There is another way to multiply money without hard work. Of course with potential risks. This risk is directly proportional to the return (profit sharing) you will receive.

What is it? It’s an investment. Investment is a set of instruments that offer you ways to grow your money. Of course to get the most out of your investment requires time and strategy.

Before going deeper into investment and the opportunities it offers you need to learn about what are the benefits of investing in the capital market.

Come on, look at this article carefully until it is finished. Hopefully you get enlightened after reading it.

What is the Capital Market?

A market in general is a place where sellers and buyers meet. Whereas specifically, the capital market is a meeting place for capital owners and companies that need capital.

People who have capital are known as investors. Meanwhile, companies that receive capital are known as issuers.

On the one hand, companies need fresh funds in large quantities, billions to trillions. On the other hand, there are many people who have idle money and do not know what to do with it.

So the capital market bridges these two needs. They meet in a place of mutual need, mutual respect and reciprocity.

As a reciprocity and gratitude of the company to investors, the company provides dividends. Where dividends are usually distributed from the company’s net profit.

In return, the company obtains soft funding without having to spend fixed interest every month.

Dividends by the company are distributed to shareholders in accordance with the company’s net profit. So that dividends do not burden the company’s operations.

The key word for a company to get many quality investors is trust. The higher the trust of a company, the more people are interested in its shares and the shares will increase in price. The company’s valuation will automatically increase by itself.

Advantages of Investing in the Capital Market

Profit is an important factor that you need to consider before making an investment. Here are some of the benefits of investing in the capital market:

#1. High Dividends and Capital Gain

When you invest in the capital market you will get dividends. Dividends are returns (profit sharing) given by companies to investors who have invested their money there.

You can cash out the dividends or reinvest them. Not only that, you also have the opportunity to earn capital gains. Capital gain is an increase in the value of the shares you own in the capital market.

Capital gains appear when you sell the shares you own. When the stock price is low, you can sell it at a high price.

You will get a decent profit. The cool term is buy low sell high or buy high sell high.

#2. Passive Income

When you have a stock investment in the stock market, you have the opportunity to have a source of money flowing into your account without having to work hard. How fun is that?

When you decide to invest in the stock market, you own an asset that has the potential to increase in value over time without you having to work hard at it.

Not only that, but you also have the opportunity to earn income from the share of the company’s net profit that is shared with shareholders.

In essence, you will get the benefits of dividends and capital gains that I have explained above.

#3. Flexible Investment

You can withdraw your investment at any time when you feel unsure about investing in the stock market. Investing in the stock market is flexible unlike investing in land and property.

When you invest in the stock market, you can enter or exit according to your wishes.

So when you feel confident about the prospects of a particular instrument, then you can enter and invest there.

On the other hand, when you lose money or lose confidence, you can exit without any strings attached.

Long before you decide to enter an investment instrument, you need to learn more about what investment instruments have promising prospects in the long run. So that you will not experience disappointment and losses in the future.

#4. Investment is not Gambling

There are many people who think that investing in the stock market is a form of gambling. Many of us think that stocks sometimes fall.

Other times, they go up in price. This is another form of gambling, they say. Actually, this is an inaccurate understanding.

Investing in stock instruments is not a gray area. You need to study more deeply, how the prospects of the stock investment business that you will enter.

Many people are successful in investing. In fact, at the beginning they made many mistakes. They learn from the mistakes of failure and loss.

So that they already have a mature calculation, they can finally benefit from the investment they put in.

#5. Liquid Investment Type

Capital market investments include investments that have a high level of liquidity. This means that when you have an investment in the capital market, the shares you have are easy to cash out.

When you have an investment there, you only need to make a sales offer to get funds. In no time, someone buys the shares you’re selling.

In fact, many transactions happen in just a few minutes. The withdrawal process is done within 3 days.

This investment is certainly different from other investments that are difficult to liquidate before maturity such as deposits.

When you want to cash out a deposit, you need to wait according to the term of the Deposit you took the first time.

#6. There is State Supervision

The capital market is an official institution or institution that is supervised by the government. So when you decide to invest in the capital market, the risk you take is not too big.

Issuers that have been listed in the capital market are companies that already have high trust. Not only that, the state has also established securities institutions such as the Indonesia Stock Exchange (IDX) and OJK.

The main task of this institution is to carry out supervisory activities, stability of buying and selling stock transactions on the Stock Exchange. So as to minimize the embezzlement of investors’ funds and reduce long risks.

Ready to Profit from Investment?

Investing can be a coffer of wealth with even minimal capital. One of the keys is that you are observant of opportunities. You need to often find out what are the benefits of investing in the capital market.

By understanding the various benefits and advantages of investing, your mindset will be formed, you will always try to increase the value of your investment every day.

The more the value of your investment, the greater your chances of getting dividends and capital gains that will be a source of passive income for you in the long run.