What is Share ?

Share (stocks) is one of the financial market instruments of the most popular. The issuance of shares is an option the company when the company decided to fund. In addition, the shares represent an investment that has been chosen for investors because the shares may offer an attractive rate of return.

Actions can be defined as a capital investment is a person or party (entity) within a corporation or limited liability company. To include this capital, while the party has a claim on corporate profits, claims on company assets, and is entitled to attend the General meeting of shareholders.

There are two main advantages granted to the investor to buy or hold shares
1. Dividend
Dividends represent a distribution of profits by the company and the profits generated by the company. Dividends will be issued after the approval of shareholders in general meeting of shareholders. If an investor wants to get the dividend, investors must hold the shares for a period of time is relatively long, until the ownership of these shares is the period in which it is recognized that shareholders are entitled to a dividend .
dividends from the company could be a dividend in cash – which means that each partner is given in the form of cash dividends amounting to a certain amount for each share – or perhaps in the form of stock dividends, This means giving each shareholder dividends in the amount of securities so that the number of shares held by an investor will increase with the existence of a stock dividend.

2. Capital Gain
capital gain is the difference between purchase price and the selling price. Capital gains realized by the activity of trading shares on the secondary market. For example, investors buy shares at a price per share of $ 3, and then sell it for $ 3, $ 5 per share, which means that investors receive capital gains amounted to $ 1 per share sold.

As an investment, share risks, including:

1. The loss of capital
It is the opposite of capital gains, which is a condition in which investors sell shares is less than the purchase price. For example, the action of ABC Corp.. the purchase price of $ 2 per share, then the share price fell further to 1.4 per share.
Fearing that the stock price continue to fall, investors sell at a price of $ 1.4 is what he has suffered loss of $ 0.6 per share.

2. Settlement risk
Companies whose shares are held by the bankruptcy court and the company dissolved. In this case, the statement of shareholders’ rights have priority Finally, after all the debts of the company can be saved (by the sale of company assets). Although there are still outstanding from the sale of company assets, the remainder is distributed proportionately to all shareholders.
But if they are not assets of the company, shareholders will not receive the results of this evaluation. This condition is a risk that the most difficult of shareholders. For a partner is required to continuously monitor the development of the company.

On the secondary market or the activities of daily stock trading, stock prices have fluctuated up and down. The formation of stock prices due to supply and demand for shares. In other words, stock prices are formed by supply and demand for shares. Supply and demand is a problem because there are many factors at both the specificity of these shares (the performance of companies and sectors in which the company is moving), as well as macroeconomic factors such as rate interest, inflation, exchange rates and non-economic factors such as social conditions and political factors.