Avoid These 5 Things When Playing Stocks
Avoid These 5 Things When Playing Stocks
Investment is one way for us to achieve our financial goals. Stocks, one of them, are often one of the instruments of choice. However, if we are not careful, playing stocks can actually make us lose, so that our financial goals become unattainable. This is because instruments such as stocks are instruments with high risk, high return characteristics.
That is, stocks do have a high risk, but well worth the results. The high risk of stocks mainly comes from price fluctuations that can go up or down in just a few hours. But in fact, if we stretch the stock investment time window, this instrument has exponential growth over time.
Especially the shares of large companies that have been listed on the Indonesia Stock Exchange, which are well established with stable finances. Therefore, stocks are always recommended to be used as long-term instruments.
So,stocks for beginners can make a loss. It could be because market conditions are experiencing negative sentiment, as when this article was written when the United States central bank raised its benchmark interest rate to 0.75%. It could also be that we lose because we make some mistakes in playing stocks. What kind of mistakes can make us lose when playing stocks? Let's see one by one.
5 This can make you lose in playing stocks
1#. Not doing fundamental analysis
To play stocksespecially when weighing the decision to buy shares, we should understand the fundamentals of the company concerned. This is important to do because we have to know the potential stocks we will choose; will it potentially deliver the results we expect within a given timeframe. It is also important to understand the fundamentals of the company, so that we can carry out risk management properly, to reduce the chance of experiencing a loss. Indeed, the trend is tempting. When the stock price goes up, we are triggered to buy too. In fact, when we started buying, the stock price was already at its peak. Because the company's fundamentals were not good, the next day the share price dropped due to the large number of sell-offs carried out by large investors.
2#. Not diversified
It would be very risky for an investor to only stick to one stock or one instrument. The risk of loss will increase. How did it happen? Because once the value of the only instrument falls, then all of our investment funds will also be affected. It's different if we diversify into various instruments, according to each need and level of risk. Even to play stocks, we should have several stocks from several sectors that have different characteristics. This is important, because later if one of the investment values has to go down, you still have other instruments that have the potential to provide positive growth. Thus, your portfolio is still saved.
3#. Tempted by short-term transactions
There is a way to play stocks known as short selling, which is short-term stock trading. Many people are proven to be able to gain profits by doing this activity. However, what is still not known is that in order to do short selling successfully, one must have strong analytical acumen. And, this is not just something that can be done. It took quite a long time to master this, and high flying hours. To get optimal profits, stocks can provide positive results if used for long-term investment instruments, more than 5 years. Short-term transactions, or short selling, will be very time-consuming. Unless we really have a main profession as a trader.
4#. Choosing stocks that have no potential
Sometimes, people choose stocks just by looking at the price. This is actually reasonable, because we will always tend to choose the cheap ones, including in the way of stock trading. Whether it's because of a small capital, or hoping for a cheap one, later you can make big profits.
This is actually normal, including when we play stocks. Indeed, we should buy cheap stocks, then sell them at high prices. But, unfortunately, playing stock online is not only a matter of expensive and cheap. The reason is, not all cheap stocks have the potential to increase in price in the future. There are even lots of cheap stocks, which are getting worse and worse over time.
5#. Just joining in Recently
people are getting to know about investing. Some instruments are eyed, because they are said to provide great benefits. Including stocks. Unfortunately then, many people join in playing stocks, but not accompanied by sufficient knowledge and understanding. They only seek stock recommendations from other people who are considered "experts", just because they have lots of followers. In fact, the matter of selecting instruments—including selecting stocks—should be adapted to the conditions and financial goals of each.
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