How to choose a stock market investment for beginners | A stock market investment is one of the more profitable investments. However, you need to know the right way to invest in stocks in order not to lose money.
Investing in stocks has become more popular recently as stock investing gives you quite a high return if you know how to invest in stocks correctly.
Before you go into the discussion of the right way to invest in stocks, you need to know what taking stocks is for. Typically, investing in stocks is aimed at making a long-term investment or earning income in the future. The advantage of using stock investments is that it is flexible. You can do it anytime, anywhere as the process is online.
The right way to invest in stocks is also not arbitrary. You need to understand everything about stocks first.
How to choose a stock market investment for beginners
As Forbes reports, there are three ways to invest in stocks that you can choose: single stock investing, stock market investing, and investing in mutual fund shares.
1. Purchase individual stocks
When investing in stocks, you can either invest in company stocks or individual stocks. The advantage of choosing how to invest in individual stocks is that when certain stocks of a company are priced high, fractional stocks can be purchased.
Individual stocks are also suitable for those of you who have limited capital and are just starting to invest in stocks.
2. Make an investment in the stock market.
By investing in the stock market, you can buy the stocks of a wider range of companies in the same sector. The difference between investing in the stock market is that it provides more diversification than owning individual stocks.
3. Invest in publicly traded investment funds
Investing in mutual fund shares has little to do with investing in the stock market. The point is, when you buy stocks from a trust fund, the profits you get come from dividends, interest income, and capital gains.
6 ways to invest in stocks for beginners
After selecting your investment, you can immediately enter the stock investment method. This method of investing in stocks is also broken down into five steps.
1. Choose securities with low transaction fees
The first way to invest in stocks is to open a securities account, and then you need to top up your stocks first. To purchase stocks, you must go through a security application, which has different transaction fees.
So you have to look for low-fee security applications so that the returns you get are also greater.
2. Buying bank shares
For those of you who are using stock market investments for the first time, you should use the latter method of investing in stocks, namely buying bank stocks or stocks issued by banking companies, as typically banking companies make a profit every year. Therefore, the share price will often rise.
3. Stock exchange listing
The stock market, or stock exchange, is the site that will organize the system and means of buying and selling investments, including stocks. So, before you buy stocks, you need to make sure the stocks you want are listed on the stock exchange.
To view stocks traded by IDX, you can visit the official IDX website for details of the stocks you will invest in.
4. Investing in stocks that have dropped in value is
Not all falling or low prices are bad, and vice versa. Because stock investments tend to go up and down. There may be times when you buy a stock that goes down in price and the price goes up shortly thereafter. However, of course you have to look at the company and the details of the stock that has dropped in price.
5. Long-term financial investment
Indeed, investments in stocks are usually long-term investments, but many people are often tempted by short-term investments in stocks. However, for those of you who want to be safe and still get a profit, choose a long-term investment as the risk is minimal if the company is stable.
6. Always keep an eye on the company’s progress.
Another way to invest in stocks is that you always need to be up-to-date or watch your business grow based on the stock you own. So you can find out if it is safe to invest in stocks in your company, and this also applies to those of you who want to make long-term investments.
Well, that was a way to invest in stocks that you should do, especially if this is your first time in the stock market. From now on, you can invest in stocks with progressive capital.