In order to make the most money possible, you must have an
investment strategy. Purchasing numerous assets is pointless if you lack a
well-developed strategy. Bizhare has put together a guide below with advice on
making long- or short-term investments in the capital market. Many dollars are
promised, especially to inexperienced investors.
Investment Strategy Defined
An investment strategy is a set of activities and actions
that investors use to maximize profit and reduce risk.
Any investor, whether a novice or an experienced one, must
develop a strategy. This is due to the fact that investing cannot be done
carelessly. Someone could lose hundreds of millions of Rupiah if they make the
wrong choice. I know, it's awful, isn't it?
Furthermore, a lot of fraudulent investments are currently
dispersed on social media. People who are financially illiterate will be
susceptible to this shady scheme. The proper investment strategy must therefore
be combined with deep and sophisticated financial literacy.
However, it should be noted that you shouldn't expect to
make fantastic profits right away when you first start investing. Having
patience and being consistent are essential for investing success. The results
of your previous efforts will pay off handsomely with the correct plan in
place.
Different Investment Techniques
For both novices and seasoned investors, there are numerous and diverse sorts of investment techniques. Everything can be used to invest in any kind of asset, including mutual funds, bonds, and stocks.
DCA: Dollar Cost Averaging
It doesn't matter whether the profit chart is climbing or
declining when using the dollar cost averaging investment method; all you need
to do is make frequent investments of the same amount. The goal is to lessen
the hazards brought on by varying price reductions.
Regular investing not only saves you money but also helps you avoid larger losses when the market declines. This is due to the moderate average purchase price you maintain. This method is well-liked and appropriate for long-term investments like equities.
VCA, or value cost averaging
If you have enough time to track changes in asset price, you can apply this method. Knowing price variations will help you choose, whether you want to expand your portfolio of assets or not.
Totaling Up
If the investment value rises above the price of the initial
purchase at a later time, you will delay making acquisitions. In contrast, if
this occurs and the price drops, you will purchase the investment item for a
higher price.
In stock investing, the averaging up method is more well-known. To maximize gains, you will buy shares in this company gradually. You might have 100 lots of Telkom (TLKM) shares at a cost of IDR 2900, for instance.
The cost rose to IDR 3000 each lot a week later. You made
the decision to expand your TLKM share ownership by 20 slots at that point. The
shares of TLKM surged to IDR 3,500 a month later. You then sold every
share of TLKM stock you had.
Typical Down
When the stock price on the Indonesian Stock Exchange is
falling, you buy in stages using the average down strategy. This method can be
used to invest in mutual funds in addition to equities.
Your potential profit from using this trick may exceed that of the dollar cost averaging strategy. You must regularly monitor the asset's price swings, though, for this method to be effective.
Invest in weakness and sell strength
Typically, this investment strategy is used more for
short-term objectives. In addition, the Buy On Weakness, The Sell On Strength
method is used to try to profit from daily swings in stock prices.
In essence, if a stock's price decreases, you'll buy it, and
if it rises to your goal price, you'll sell it back as soon as you can. Traders
typically sell their shares if the increase target is not attained in order to
reduce losses (cut loss).
Lump Sum Approach
Generally speaking, the lump sum strategy's main idea is to
make all of your payments at once during a sale. With this approach, you can
make significant profits, particularly if the value of your assets increases.
Investors with significant cash who do not want the trouble
of frequently managing their investments typically employ this type of
technique. The risk is still significant since if the value of your entire
portfolio declines, so will the value of your investment. As a result, the
losses are also bigger.
Hunter's profit
It is more common to purchase equities using this investment
method. Investors will look for dividends, as the name suggests, which are
typically paid out at the end of the year.
The results will be utilized to purchase the same or different shares after dividends have been received. The dangers involved in investing in dividends will be substantially lower.
Benefits of an Investment Strategy
When you establish an investment strategy successfully, you can gain a lot of advantages. Here is the evaluation!
Prevent inflation
Avoiding inflation is one of the most notable advantages of an investment strategy. You are probably aware that money loses value over time. The value of your currency will rise as a result of investing.
Increase Your Income
Investments are a great way to boost supplementary income or passive revenue. This is critical, especially in light of the periodic price increases for products and commodities. Your balance sheet is at danger of becoming unstable if you just rely on basic income.
Promote wellbeing
You can increase your economic prosperity by investing. Think about what would happen if you had IDR 100 million to invest and chose a 4% annual return investment vehicle. You can already make IDR 4 million in one year without doing anything!
Retirement Planning
Have you ever estimated how much money you'll need for daily expenses when you retire? You are mistaken if you believe that retirement is still a ways off. Time can fly by extremely fast. Who would have imagined that retirement was close at hand!
Encourage the attainment of financial objectives
Everybody should establish their own financial goals, such
as saving money for future costs like weddings and children's education. You
can use the return value from your investment to meet a variety of personal
financial objectives.
The investment strategy for the capital market and other assets must be properly planned, as may be inferred from the description above. This is crucial to reducing risks and raising earnings. Therefore, Bizharian Friends, what are you waiting for? Have fun coming up with the best plan so you can make a lot of money
Comments
Post a Comment