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The Benefit of Stock Investment : Devidend & Capital Gain

There are two benefits at the same time that are the main feature of a stock investment, which is getting capital gains and receiving dividends.

DIVIDEND

Dividends are a kind of profit sharing given by a company to its shareholders. The amount of dividends varies depending on the size of the company's revenue. Dividends are distributed after the approval of shareholders at the GMS (General Meeting of Shareholders). Dividends are usually distributed annually, but this depends on the company.

There are companies that diligently divide dividends, some are not. Dividends are not a company's obligation. There are times when companies do not share dividends, because the losers or profits are used for company expansion. To be entitled to get a dividend, the investor must hold the shares for a certain period of time until the ownership of the shares is recognized as a shareholder and is entitled to receive a dividend.

Dividends given by companies can be in the form of cash dividends, that is cash or stock dividends where the shareholders get additional shares according to the portion of shares owned.

Nominally, cash dividends are usually not of great value. The range of dividends received by shareholders is between 1% -3% of the share price. Although not too large, the dividends received can be a regular income for investors, if you have shares that diligently divide dividends. For the record, dividends received by investors must still be deducted with income tax. Dividend tax since 2009 is 10% of the value of the dividends received.

CAPITAL GAIN

Capital gain is the difference between the purchase price and the selling price of the stock. As discussed earlier buying a stock is buying a business. Generally, if a company has a business that runs well, then many investors are interested in buying these shares. Thus there is a greater demand for these shares, resulting in a price increase. Then the owner of the company's shares will benefit from an increase in share prices.

Examples of capital gains are as follows: You buy ABCD shares at a price of USD 10 per share and sell at a price of USD 12 each share, it is meaning that you get a capital gain of USD 2 per share. This profit has not yet been deducted by the share transaction fee.

The biggest advantage of a shareholder usually lies in capital gains, because the increase in stock prices can multiply in the long run. It can even make shareholders rich. Even the level of profit in buying shares can be much higher than buying gold
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