Stocks are called a high risk investment because investors can experience losses in the form of capital loss. However, investors can also make a profit up to 20 percent or more for less than one year. Thus, you need to know stock investment tips to get a big profits.
Check out these several stock investment tips for beginner:
Start with small capital
If you are not familiar with the stock market, it is recommended to start with minimal capital first. The goal is if you make a wrong move, the losses suffered are not too large. Another goal is for the learning process. You need to get used to the software for buying and selling shares, learning stock analysis and so on.
Buy stocks that have good fundamentals
Usually, stocks that have good fundamentals are blue-chip stocks. The characteristics of this company are known to the public, have a clear business, its products sell in the market, not much debt, transparent management and so on.
Why choose blue-chip stocks? When the stock market is corrected, blue-chip stocks are also corrected, but after the stock market recovers, blue-chip stocks also move up earlier and faster than others.
Diversify
Buy several types of shares to divide the risk. Owning a lot of shares has a smaller risk of loss than buying just one type of stock. If one stock performs down, chances are other shares can go up. Don’t put all your eggs in one basket.
Learn to do analysis
You need to know how to analyze stocks to make stock buying or selling decisions. There are two common methods of analysis, namely Technical Analysis and Technical Analysis. You can read the Technical Analysis for Maximum Profit and Stock Fundamental Analysis book to learn more about each of these analyzes.
According to CNBC, there are many unfamiliar term in stock investments. You’ve heard how risky the stock market is. Thus, you have to learn a lot of things before start your stock investments.
Focus on the long term
The stock market is very risky in the short term due to fluctuations. But it will be safer in the long run. The longer the investment, the greater the rate of profit. Based on the history of the stock market, it is proven that if we invest in the form of shares in the long run, then the opportunity to achieve a return of 12.9% is in plain sight. Note: This figure is obtained from the calculation of JCI yields in the long run. An explanation of how to calculate it can be found in the Stock Fundamental Analysis book page 130
Do portfolio analysis and review it regularly
You can do the analysis and review every 3 months, 6 months, or once a year. If there are stocks that are not performing well, for example, the product fails in the market, losers, and so on, it can be replaced with other better stocks.
By doing the steps above, you are more likely to achieve profits in the stock market. Congratulations on investing in the stock market.
