Playing Stock VS Saving Stock

Playing Stock VS Saving Stock

Play Stocks

Stocks are securities that show the ownership portion of a company. Buying shares or investing in shares means that you have ownership rights to the company and are entitled to the company's profits in the form of dividends, at the end of the company's accounting period. Investing by buying shares is no different from a situation where you entrust money to your friends to be managed and developed.

For example, Putu has a coffee shop business. Putu wants to expand his business, but he faces capital problems. Therefore Putu offered a number of friends to invest in his cafe business and offered commensurate returns in the form of profit sharing.

Seeing such an attractive offer due to the very rapid growth of coffee shops in the millennial era, four of Putu's friends gave their capital to be managed in their business with the aim of getting profit in the form of profit sharing.

Here Putu benefited as well as four of his friends. They benefit if Putu's coffee shop makes a profit so they get the company's profit sharing.

In the story above, Putu acts as a company/issuer that is issuing/ selling new shares to get funds from investors.

So, what is the purpose of the companies listed on the Stock Exchange/Capital Market to issue shares and sell them to the public? Is it to get additional capital? It is absolutely right that companies listed on the Stock Exchange issue shares, sell new shares, to get fresh funds for the sake of business expansion until paid off the debt.

The party that buys shares from the company is called an investor, because we are investors or investors, the activity carried out is "investing in shares" rather than "playing shares".

I do not know where the term play stock appears, but clearly the term plays shares only in Indonesia abroad, the term used is "stocks investing" or "stock trading".

The term playing stock looks trivial, but the impact is extraordinary. Why is that? In every term that is used contains a mindset which then becomes the driving force for every action taken.

The word "play" contains meaning that is pleasant, undirected, and does not seem serious. From the term play, this stock comes behavior that makes an investor like a player or gambler.

The characteristic of a stock gambler is that it does not use planning and uses emotions in its actions. Often over-buy because of greed or not buy shares because of fear. Another feature is thinking rich in a day. This mindset results in people not going through the process and not wanting to learn. Another feature is addiction. People who are addicted to playing stocks can't stop. If you win you want to play again and again, whereas if you lose you want to get revenge to cover the loss.

So if the mindset is wrong, then the action will be wrong, and the results will be wrong. Don't be surprised, many people with the mindset of playing around will fail in stock investing. Jesse Livermore uses the term "game of speculation" but he is very disciplined in preparing everything and doesn't make decisions based on emotions alone. So are you going to use the terms "playing stocks" or "investing stocks"?.

Talking about stock investing, it's incomplete if you don't learn from world legendary stock investor Warren Edward Buffett. What is Warren Buffet's view of stock investment and what are the principles of stock investment that can be followed. First, buy a business instead of buying shares, second buy a business that is easy to understand, Do not be tempted by cheap stock prices, buy shares for the long term and always be patient. Never lost money, rule number 1 is never to lose money and rule number 2 is never forget rule number 1. Another view from Buffet does not stay silent on a leaky ship, don't diversify excessively choose a company with consistent performance, choose a company by assessing quality management that is rational, honest, and able to develop its business strategy

Saving Stocks

As the name suggests, in saving shares, investor money is used to buy a number of shares on a regular basis, while saving in a bank is to save a certain amount of money periodically in savings or deposits.

In implementing the stock saving strategy, investors buy shares regularly in a certain period by the same amount so that the average share price will change when they want to buy back shares. If the stock price rises the number of shares that can be less so that the average share owned will rise. If the share price goes down, the number of shares gained is higher, the average share price is lower. The advantage of investing using a stock saving strategy is in each period.