NOT ABOUT NOMINAL, INVESTMENT IN CAPITAL MARKET NEEDS STRATEGY! CHECK THE FOLLOWING TIPS

Investing is not just about the number of funds invested. In order to provide maximum profit, you must understand the investment strategy. Of course, this strategy needs to be implemented according to your needs, funding capacity, and risk profile. To invest in the capital market, you can take advantage of stock and mutual fund products, then what is the strategy for investing in the capital market?

The first strategy you can use is Dollar Cost Averaging (DCA), which is investing every month or every week with the same amount of money. This strategy, also known as regular savings, can be done by using the auto-debit feature on the account. Through this strategy, you can build investment habits consistently and reduce the risk of consumptive habits when you have idle funds because the funds have been invested regularly. In addition, this strategy is suitable for investors with a fixed monthly salary or income and who want to invest in the long term. Investing with DCA doesn’t have to be in large amounts! The most important thing is that you invest regularly so that the accumulation of investment funds continues to increase and you can benefit from market conditions in each period . Often in investing we worry about market timing like you feel confused about finding the right time to buy or sell your investment instrument. Whereas market conditions in each period are also different and quite difficult to predict. Therefore, novice investors can take advantage of the DCA strategy. By investing regularly in different periods, you have diversified your investment risk.

While the second strategy is a lump sum  (LS), which is to deposit a large number of funds at the beginning of the investment and let the investment money move up and down following market developments, without making additional investments ( top-up ) until the investor decides to withdraw it. This strategy is suitable for investors who want to have a variable income or want to take advantage of large amounts of idle funds such as bonuses or inheritance to invest. With this strategy, you will get high returns if you invest at the right time The right thing to do is to buy when the NAV (Net Asset Value) prices are falling at the lowest position so that it allows investors to get more investment units at a lower price, and sell when the NAV price is at the highest position. But keep in mind, that market conditions are difficult to predict, this requires experience and expertise to conduct market analysis. In this case, the LS strategy has a relatively higher risk of loss than the DAC strategy when the price drops drastically.

What analysis needs to be done in investing in the capital market? To invest in the capital market, especially in stock and mutual fund instruments, there are two types of analysis that you can do, namely fundamental and technical. Fundamental analysis is an analysis that aims to study matters relating to the financial condition of a particular company. Things to consider in fundamental analysis:

  •  Global macroeconomic conditions, such as the economic and trade policies of other countries. You can learn this by reading international news;

Domestic macroeconomic conditions, such as BI’s interest rate policy, rupiah exchange rate, and even domestic social and political conditions. You can learn this by reading domestic news; Growth prospects per business sector such as industrial growth conditions. You can learn about this by reading specific news about the related industry; and company fundamentals such as the condition of the company’s financial flows and assets. You can learn this by reading the company’s officially published financial statements.

Next is technical analysis, which is studying the historical price conditions in the past to be able to get an overview of current and future price movements. This analysis requires special skills such as statistical formulas and algorithms to be able to read chart movements and stock prices.

Currently, there are many sites and digital applications that provide information related to fundamental and technical analysis to decide to invest in the capital market, especially stocks and mutual funds. So you can start using this information to learn to invest. It’s okay to start investing with a small nominal, the most important thing is to be consistent and early on!

Leave a Comment