4 Secret Stock Investment Losses
4 Secret Stock Investment Losses | Stock investment is a buying and selling business activity in the financial market that is able to provide high profits. But investing is also known to have risks that are commensurate with the rewards. Therefore, investment requires separate knowledge that must be mastered so that you are not exposed to losses.
Investment risk or loss also needs to be recognized because it is useful to avoid these losses. What are the risks of losing stock investment? Here's an explanation.
Disadvantages of Stock Investment
1#. Capital Loss
Risks that often occur and are common risk of loss. The opposite of the term Capital Gain, which is the profit from the sale of high shares.
On the contrary, Capital Loss is a condition where investors experience losses because the shares purchased have decreased in price from the purchase price. In a Capital Loss position, investors sometimes go awry because if left unchecked, they may continue to lose money but if they are sold, the price will be cheaper than the purchase price.
The next share investment loss is liquidation or a term for losses caused by the company where the shares are stored. For example, the company experienced financial problems due to debt, failed to pay interest, and others.
Liquidation is always related to the company and can also be caused by the company being dissolved due to bankruptcy or violating certain regulations.
The next disadvantage is the condition in which investors buy shares but rarely trade them on the exchange or stock market.
This risk will be very detrimental if you want to sell shares but find it difficult to find a buyer because they are rarely traded on the stock exchange floor. If the normal price cannot be sold, then there is no other option to sell the shares at the cheapest price.
It is very important to choose a company that we will make stock storage. The company is very important to note, starting from the quality, identity, and news that is relevant to the company.
Suspension is a condition in which the company where you keep shares experiences termination on the stock market for various reasons. In essence, the company has not been able to comply with the rules imposed by the exchange and does not comply with the rules and regulations.
The losses above can be caused by various things, in essence you will get a financial loss that is enough to make your mind stressful. Hearing about these losses makes investing feel “horror” for many people. Even if you really learn about investing and prepare everything well, then these risks can be avoided, or at least the losses can be minimized. Mental preparation is also important because if a loss occurs and you experience mental pressure, it will be difficult to get back up to start investing again.