Beginner’s Way of Investing in Stocks – As a result of higher real inflation in the Dollar, as well as the imposition of taxes on interest on savings and time deposits, as well as monthly bank administration fees and lower bank interest rates, which are even lower than the real inflation rate, banking products become unattractive. In fact, it can be said that it becomes detrimental because it becomes minus the growth in value. For those of you who are new, consider the following beginner stock investment methods.
People then try to find other investment alternatives or at least other ways to maintain the value of assets from time to time. One of them is by starting to shift investment to stocks.
Things You Need to Know About Investing in Stocks
Investing in stocks does have a high rate of return, but the risks are also high. The profit from the stock investment can be in the form of capital gains, or an increase in stock prices and dividends, if the company distributes its stock dividends.
Investing in stocks also requires some basic knowledge to choose good quality and potential stocks. Here are some things to consider when choosing stocks.
First look at the company’s fundamentals which can be seen from the financial statements, profit and loss, turnover, capital structure, total debt, and cashflow, the financial data of the company whose shares you are going to buy.
An easy indicator for beginners is that if there is no increase in turnover, there is quite a lot of debt, and profits continue to decline, then you should not buy it. Choose other stocks that are more prospective and perform better.
Technical Analysis Investing in Stocks
Next you also need to know and perform a stock technical analysis (graph) of the company. If the up and down movement of the stock is not too extreme, then you can buy the company’s shares, because these shares are stable stocks and are not prone to market speculation.
Consider the Advice of a Broker or Stockbroker As a Beginner
You should also not ignore the advice of a broker or broker to find out whether a stock has good prospects or not. In general, the broker will explain the fundamentals and technical analysis of the company whose shares you will buy.
The broker will also provide input regarding future potential, estimates of the development of the stock price in the future. You should consider these inputs before deciding whether to buy the stock or not.
Don’t forget to choose a credible stock brokerage company, which has been officially registered on the Indonesia Stock Exchange and supervised by the Financial Services Authority (OJK). In addition, it has a good reputation and has had many customers and received good reviews.
How to Investing in Stocks
For beginners For beginners, here are tips on how to invest in stocks.
Types of Stock Investors
First identify yourself first. Are you a risk taker type of stock investor, who is brave, aggressive and ambitious? This type can take stocks that have a high risk profile with the prospect of maximum gain or high return.
Or, you are the type of stock investor who prefers to play it safe with a small level of risk. This type should take bluechip stocks that are stable and liquid, such as state-owned companies and stocks with low risk.
Are you the type of investor who is moderate so you can mix, take high-risk stocks that can bring high profits in order to maximize investment. However, it also invests some of its investment value in safer bluechip stocks.
After knowing your risk profile, the next step is to determine the purpose of investing in the stock. Namely whether to be invested for the long term, medium term, or short term only.
Usually, stock investments have medium to long-term investment goals. This is because there is a broker fee so that if you are short-term, daily trading, you will tend to lose.
This is because the funds will run out to pay broker fees and will take up the time that will be needed to observe the movement of stocks every day and also to carry out transactions every day.
Understand the Cycle for the Right Time to Buy and Sell Stocks
It’s important to know when to buy and sell stocks. Also, if you experience a loss, at which point should you cut loss and if you experience a gain, the stock will increase, at which point should you take a gain.
Buying shares is attempted as early as possible when the price is still cheap. In addition, usually the right time to sell shares is in May while buying is in September or October.
Why is that? Because in May many people sell their shares due to the holiday season. So that many people tend to release their shares for vacation purposes so that it will make the stock price go down. So, if you want to sell a stock, then do it before that time comes so the price won’t drop too much.
Meanwhile, in September or October, stock prices will generally tend to rise, before reaching the end of the year in December. Therefore, you can buy the stock before that time or when the stock price is still low.
Total Investment Value and Diversification
As a beginner, don’t be in a hurry to immediately invest all your investments in stocks. Investments in stocks can also be done with a small capital. With a capital of between two million Dollar and even five hundred thousand Dollar, now it is also possible to invest in shares.
As a layman and a beginner, you should set aside between 1% to 25% of the total value of your first funds to start investing in stocks.
Don’t risk all your funds and don’t forget to diversify, that is, don’t invest in just one type of stock.
That’s how to invest in stocks for beginners that you need to know.