With the development of increasingly modern technology, of course almost everyone has heard of the term stock investment.
Before you try investing in shares, it's a good idea to know the risks. Invest in shares first. The risk in investing in shares is very high, but investing in shares can also provide high potential profits.
However, there are still many novice investors who only look at the profits without considering them carefully. losses that can be experienced.
Therefore, stock investment is often referred to as a high risk high return investment, which means it has large risks but can also provide large profits.
Some Stock Investment Risks
Investors really need to know about the risks of stock investment because this is a consideration in making decisions for investors, especially novice investors who may not have much experience in the field of stock investment.
Apart from that, if an investor makes an investment without knowing the risks first, perhaps later if they experience a loss it can cause disappointment and regret.
Therefore, it would be good for novice investors to know in advance the risks of investing in shares. Here are 3 risks of stock investment that novice investors must know:
Capital Loss
Capital loss is a condition where the selling price of a share is lower than the buying price. Meanwhile, the main principle in investing is to buy shares at a low price and then sell them at a higher price with the aim of making a profit.
So if you do the opposite, if you sell shares at a lower price. If the price is lower than the purchase price, the investor will experience a loss.
Therefore, apart from requiring proper analysis, investors are also required to use cold funds so that when prices fall, investors do not experience panic selling.
Because the stock market will always rise and fall, prices within a certain period of time do not always rise continuously or fall continuously.
Suspension
In short, suspension can be interpreted as stopping trading in a share due to certain factors. So investors cannot make transactions selling or buying shares during the suspension period.
Usually a share is suspended for a few days, but often this suspension can last for months.
To announce to investors if shares are suspended, the stock exchange will release an announcement on its official website.
Liquidation
Liquidation is one of the risks of stock investment that occurs if investors have shares in a company that has been declared bankrupt by the court, this can also happen to companies that are dissolved.
In conditions like this, investors who own shares in the company will be the last party in distributing their rights because the company must first fulfill other obligations such as paying off the company's debts.
So it can be said that investors or shareholders get their rights from the remaining assets owned by the company after completing all their obligations.
However, if there are no company assets left to be distributed to shareholders, then of course the shareholders will not get anything.
Therefore, it is also very important for investors to always monitor company developments to find out the problems or potential that a company has. So you can minimize the risk in stock investment.