Important Stock Investment Tips For Beginners – The stock investment trend is one of the most popular investments today among millennial, with the rapid development of stock investing, many beginners want to try these stock investments.
Millennials who are currently active on the stock exchange are commonly known as retail investors. For those of you beginners who are just about to enter the world of stocks, it is better to first learn how the capital market works, especially stocks.
In addition, understand five basic tips in stock investing to find out the risks you will face when you become a stock investor. Come on, take a peek at the tips as follows!
1. The stocks that you buy are in the blue chip category
There are three categories of stocks, namely first liner stocks or what are called blue chip stocks, second liner stocks and third liner stocks which are also known as fried stocks. When you want to buy stocks for the first time, try to buy blue chip stocks.
Companies that are included in the blue chip stock category are market leaders who have been in the capital market for a long time. Usually the company’s performance is good, the profit generated increases and is diligent in distributing dividends to shareholders.
2. Learn the fundamentals and technical basics before buying stocks
Continuing from the previous tips, the reason that makes blue chip stocks good is because they have good fundamentals. You must be able to analyze the basic fundamentals at least from the value of Debt to Equity Ratio, Price to Earning Ratio, Price to Book Value, Earning per Share and several other important aspects.
Like the slogan held by investors, namely ‘In fundamental we trust’. If you want to be even more proficient, you can start learning how to share technical analysis, which is no less important.
3.Avoid the FOMO (Fear of Missing Out) phenomenon
In investing in stocks, there is also the term FOMO or a fear when we miss something fun. This means that people may be feeling high when they have lots of lots in stock A that are actually profitable. Instantly you don’t want to be left behind and buy the stock.
Unfortunately, it’s not a profit, in fact, you experience a loss because you buy at the top price. The tip is not to try to catch a train that is already running, but wait for the next train that will depart. This is an analogy for avoiding losses like a train that has gone fast earlier.
4. Follow Warren Buffett’s adage in investing
Always remember the adage of veteran investor Warren Buffett “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”. That is, when people are afraid when the stock is down or red, it’s time for you to start adding ammunition by paying regular installments for shares because it means the stock price is being discounted.
The popular term is called dollar cost averaging (DAC), instead of selling stocks. Conversely, when the portfolio starts to return to normal and even gets high profits, then you can sell it.
5. Don’t easily trust stock recommendations or ‘stock pompoms’
One thing that must be understood is that you do not easily believe in share recommendations from other people. You must have your own fundamental analysis to buy stocks.
Often times, a share recommendation or the issue of a stock’s price going up is used by certain parties only to boost the share price. So, don’t be easily consumed by stock pompoms, huh.