According to Kiyosaki’s theor of popular stock a leading financial expert, in his book entitled Rich Dad Poor Dad, he divides work into 4 parts, namely Employee, Self Employee, Business and Investor. The novel has inspired many people to reach the highest level of work is to become an investor.
But many also think that to become an investor, you must be successful, have a lot of money, and it seems like a justification for being an investor so you have to be rich first. Meanwhile the world’s leading investment experts report “invest and you will get rich, not the other way around.”
Investing in Popular Stocks
The meaning of shares is the fact of participation or ownership of a person in an industry or limited liability company. If you own shares, then you can also be called the owner or owner of the industry, depending on how large your share of ownership is.
The form of shares is a sheet of paper issued by the industry and reports that the owner of the paper whose name is listed in the message is the owner of the industry according to what percentage or how much investment is invested in the industry.
If the industry is healthy, then the stock will have a large selling value because it can generate large profits. This is where the attraction of investment in the form of shares, whether in small ownership shares or you are the founders and highest shareholders in the industry.
The following are the types of stocks which are divided into 3 based on the character of each.
a. Types of Shares in terms of Expertise in Claims or Claims
This type of stock has the characteristic of being able to claim ownership of all income and assets owned by the industry. However, this type of owner or shareholder only has limited liability. The advantage is that if the worst effect occurs, for example, the industry goes bankrupt, the maximum loss borne by the shareholders is the amount of the investment in the stock.
Preferred Stocks( Preferred Stocks)
This type of stock is designed as a combination of bonds and common stock. Some investors like the type of stock that can create permanent income (such as bond interest). Universally, the characteristics of preferred shares are the same as ordinary shares which can represent equity ownership and are issued without coincide with the maturity written on the share sheet, and pay dividends. These shareholders can also make claims on profits and assets in advance, the dividends are always valid throughout the validity period of the shares, and have redemption rights and can be exchanged (convertible) with ordinary shares. This is what makes these stocks similar to bonds, and attracts many investors.
b. Types of Stocks in terms of the Method of Transfer
Top Performing Stocks ( Bearer Stocks )
Physically, the name of the owner is not written on the shares. This matter aims to be easily transferred from one investor to another. Many investors own these shares with the intention of actually being traded. Investors do not need to be afraid because legally, who holds the shares, so that he is recognized as the owner and has the right to appear in the Universal Meeting of Shareholders (GMS).
Shares in the Name ( Registered Stocks )
In contrast to stock showing, the share in the name of the shareholder is clearly written on the share paper and the method of transfer is also required to go through certain procedures.
c. Types of Stocks in terms of Trading Performance
Blue Chip Stocks
This type of stock is much sought after by investors because it comes from an industry that has a great reputation, as a leader in its industry, and has a normal income and does not vary in paying dividends.
This type of stock also has an advantage in terms of expertise in paying dividends, which is greater than the average dividend paid in the previous year. The ability to generate greater income and regularly provide cash dividends is a special attraction for investors.
Similar to blue chip, this type of stock has a large revenue growth, as a leader in a similar industry and is known as an industry that has a great reputation.
Even though he is not an official in the industry, this type of stock always has the characteristics of a growth stock. Generally are stocks from regional industries and are less well known among issuers.
Investors with a high risk profile can try this type of stock. These stocks have the potential to generate huge profits in the future, but cannot be irreversibly generated from year to year.
Counter Cyclical Stocks
This type of stock is very normal when economic conditions are volatile because it is not carried away by macroeconomic conditions or the general business situation. The illustration is if there is an economic recession, so the stock price is always large, where the issuer can pay out large dividends. This can happen as a result of the issuer’s expertise in generating large revenues during a recession.
The number of industries that listed their shares on the IDX was 713 industries as of September 2020.
To make it easier for investors to choose stocks, the IDX produces several stock index indexes based on various characteristics.
The stock exchange explains that the stock index is a statistical dimension that reflects the totality of price movements for a selected set of stocks based on certain criteria and methodologies and evaluated regularly.
The purposes/efficacy of the stock index include:
- Used as passive investment products such as Index Mutual Funds and Index ETFs and derivative products,
- Benchmarks for active portfolio,
- Proxies in measuring and modeling investment returns (return), systematic risk, and risk-adjusted performance, and
- Proxy for legacy class on inheritance allocation.