How to Invest in Stocks that are Suitable for Beginner Investors
Of the many investment products, a stock investment can be said to be a type of investment that can provide the highest return or return compared to other types of investment. However, on the back of the high yield returns, the risk image that follows investing in stocks is also quite high.
So, it is highly recommended that you understand very well what stock investing is, how to invest in stocks that are suitable for novice investors, and how to minimize the risks in order to maximize their profits.
How to Invest in Stocks
1. Choose Securities with Low Transaction Fees
A suitable way of investing in stocks for first-time investors is to choose securities with small transaction fees.
What are securities and their transaction fees?
In stock investing, investors are required to open a securities account that is facilitated by a securities company. After the account has been created, the investor must then top-up a number of funds to the securities account.
Money in a securities account will later function like e-money. This money is what investors use to buy the desired stocks online. So, the transaction fee in question is the cost of buying and selling shares. This fee will be the profit of the brokerage company in question.
Usually, the cost of security is set to be 0.19% for purchases and 0.29% for sales. But there are also only 0.15% for purchases and 0.20% for sales.
So, that the profits are even greater, of course, the choice is to have a company with the cheapest securities costs. But that doesn't mean the higher-cost securities aren't worth choosing. Usually, the cost of a security is determined by the quality of its service and application.
2. Buying Shares from Banking or Consumer Goods
Buying shares from banks and large companies engaged in consumer goods as the first stock is a suitable way of investing in stocks for novice investors. Why?
Because these companies are companies with simple businesses, produce goods that are used by the community and are guaranteed to make significant profits every year. That means stock prices will often rise if they are unstable, safe, and profitable, right?
Even if the stock price suddenly drops, it usually doesn't take long for this type of company to return to normal and be profitable. It's safe anyway!
3. Buy when the Price is Down
Many beginner investors believe that when the stock price has fallen, that's when it should be avoided to buy stocks. Actually, such an understanding is not completely wrong, but it is not completely true either.
Because there are many cases of buying when the stock price drops and then the price returns to normal or high. With this method, of course, you can get the maximum benefit.
But, don't just apply this method to every falling stock price. There are several other aspects that you should consider. So be careful and always be wise.
4. Buy Stocks with Good and Stable Financial Fundamentals
Before buying, it's a good idea to read the portfolios of each company whose shares you are looking for. Perform careful screening and filtering and choose the best financial fundamentals.
By choosing a company with good financial fundamentals, you can reduce the possible losses as much as possible so that you can get more and more profits.
5. Choose Long-Term Investments
Long-term stock investing is a suitable way of investing in stocks for novice investors. In addition, as previously mentioned, the stock investment will be more profitable if it is treated like saving with more profits. With this concept, at least the dream of living comfortably with stable finances in 10-15 years later can be realized or other things that you want to achieve.
In addition, long-term investment also has a lower risk and by choosing the right company, the benefits that can be obtained can reach not only 100% but also many times.