Want to be rich? Investing is one way. You can choose stock investments that can give you big profits.
Currently, there is a lot of stock pompom phenomenon from public figures. Beware, if you are tempted by this action, you may make the wrong move. Not lucky, even stumped.
In stock investment, you should do an analysis. For beginners, you can do fundamental analysis, such as reading company financial reports, and others.
So don’t buy shares of companies you don’t recognize. Because as Lo Kheng Hong said, the stock market is merciless.
If you want to invest in stocks, here’s how to choose the right and right stocks to avoid big losses.
Watch the stock price movement
The stock price of a company is always fluctuating. Move at any time, even in seconds.
The more demand, the more stock prices can soar. However, you need to be careful if the price increase is quite drastic and fantastic.
For example, in today’s stock opening, A’s share price is Rp 200 per share. But at the close of session I, it jumped to Rp 500 per share. Then at the close of session II, it rose again to Rp 1,000 per share.
Stock movements like this are no longer reasonable. You better avoid it. Usually, stocks that are subject to Upper Auto Reject (ARA) or Upper Auto Reject (ARB) by the Indonesia Stock Exchange (IDX) change very quickly.
For beginners, you should avoid auto-reject stocks. Moreover, it has entered the list of UMA (Unusual Market Activity) or stocks that move outside the norm.
Including if the shares are illiquid. The characteristics are a few bid and offer queues. You can check on the IDX official website to find out which stocks are included in the UMA list.
Observe the change in trading volume
Stocks whose prices increase drastically will be accompanied by significant changes in trading volume as well.
The thing to watch out for is when the stock is suddenly popular in the last few days. Many are hunted for shares, for example due to stock pumping or other sentiments.
If the indications are like this, there is a possibility that the stock is being toyed with by big investors. The city can too. From a previously high price, then suddenly dropped.
For that, be careful when buying shares. Do not be easily tempted because the price is cheap, but pay attention to the credibility of the stock as well.
Profits made by the company
The rise and fall of the trading volume of a stock will usually affect the profit or profit of a company. Unfortunately, this did not happen.
Conditions like this indicate that the company does not have good fundamentals. Especially seen from the financial statements.
Tips for Choosing the Right and Right Stocks
Get to know the company and its performance
Do not buy shares because of incitement, persuasion, seduction, or because of following other people. It’s like buying a cat in a sack.
But buy shares because you already know the company and the reputation of the owner. All of this is done by means of analysis.
In check, who owns it, does the financial report make sense or not. In the financial statements, it is dissected again, for example, the debt is reasonable or not, the valuation is cheap or expensive, the return on equity (ROE) or investment rate of return is at least 15% or less, and others.
That way, buying stocks uses your brain, not lust. So that the results are clear and maximal. Not just 5% or 10%, but hundreds to thousands of percent.
Buy stocks that enter a certain index
IDX released several stock list indexes according to their characteristics. The goal is to make it easier for investors to choose stocks.
For example the LQ45 Index. Contains a list of 45 preferred or featured stocks. In addition, there are other indices such as IDXQ30, Kompas100, Pefindo 25, and others.
Stocks that are included in the stock list index are usually more reliable and have proven to be profitable.
Before buying a stock, you can do two analyzes. First technical analysis, second fundamental analysis.
Fundamental analysis refers to the approach of political conditions, economics, and business trends. You can see it through the company’s or issuer’s financial statements
Technical analysis uses the movement of the stock approach over a certain period of time, including prices and fluctuations, as well as information on the highs and lows of stocks.
Monitor stock price trends
In a matter of minutes, even seconds, stock prices can change. There are many factors, both external and internal. So, be diligent in observing the movement and trend of stock prices so that you know where it is going.
Take time to read or watch news about the capital market, so you can always get the latest information on stock prices and trends, and maximize profits from playing stocks.
Understand First, Then Invest
Before investing in stocks, you must first understand the risks. Investing in stocks is indeed capable of providing great returns, but it is worth the risk.
Starting from the risk of loss due to price declines to the risk of liquidation if the company goes bankrupt. If you understand and are ready to take any risks, then make sure to invest.
No need for big capital. Start with small capital, buy one or two lots of shares. Once you know the strategy, you just beat a lot to become a billionaire.