When it comes to equity investment, what comes to your mind? Is it the potential for 12-14% profit? Or a much bigger profit potential?
Equity investment is undeniably popular among investors. Experienced investors usually already have a strategy for equity investment. Many people are already investment-literate in general, but there are also many of them who do not fully understand how to invest in stocks. So, when they try to invest in stocks, they get little or no profit and often end up with losses. When doing equity investment, one shouldn’t just buy or sell certain stocks without considering the risks involved.
Know the Risks of Equity Investment
Many people are familiar with the term “High Risk, High Return” in equity investment, but do not really understand the risks at hand. Some of the common risks faced by investors include:
1. The selling price is lower than the stock purchase price. The decline in stock prices is one of the most common risks faced by investors. Not only beginners, but even professional investors also still face this kind of risk.
2. Suspended stocks. Suspension means the trading of certain shares is stopped by the stock exchange. During suspension, investors cannot conduct transactions for that stock. This causes losses for holders of the stocks.
3. Stocks of potentially bankrupt companies. This risk is common when buying stocks without regular monitoring. The easiest way to avoid this risk is to buy stocks of a fundamentally strong company and monitor the performance of the stock.
In addition to the 3 things above, there are still many other risks that are commonly encountered by inventors, but the key to successful investment is minimising the risk in investing. Recognising investment risks is not something one can learn in a day or two, but experience and deep understanding can reduce the risk of greater losses.
Tips for Minimising Equity Investment Risk
Some tips to minimise risk in equity investment include:
a. Use unused funds to invest Before investing in stocks, it is better to manage your finances first. For example, setting aside funds for emergency needs, education funds, and funds for daily needs. Meanwhile, investment in the stock market itself should be made using funds that are not planned to be used in the near future. This is because the stock market is an investment sector that has a relatively high risk, so investors need to be careful in managing their portfolios.
b. Learn and gather information on the stocks Before investing, it is better to study the fundamental condition of this company, including by reviewing the company's Annual Report. From the analysis of the Annual Report, there are several things you can learn such as company management, company finance, sales analysis, and so on. These things are very important to learn before buying their stocks.
It would be better if you buy the stocks of companies whose products are well known. If the buyer's power increases, the company's turnover also increases.
c. Buy stocks based on analysis instead of just speculations/rumours Equity investment poses a higher risk if there are speculations or rumours. For example, an issue with a particular stock can usually cause the stock price to rise or fall significantly in a short period of time. An investor is advised not to follow the circulating speculations and should always re-confirm the truth of the information.
d. Don't just rely on one stock Often investors hear the idiom “Don't put your eggs in one basket.” In equity investment, it is better to buy stocks in different sectors to avoid losses in one sector. This can reduce the risk profile in each sector of the stocks purchased. Imagine if your entire capital is invested in a single stock, then the selling price fall drastically. In this position, you can only choose between Hold or Sell (Cut Loss).
e. Consistency and commitment in managing investment funds Keep in mind that investing needs more than the ability to analyse, but also requires commitment, discipline, and the perseverance to achieve your investment goals. Like school, not all subjects can be mastered, but it is necessary to ensure there is a purpose so that you know what lessons need to be studied deeper. Thus, success can be achieved in this field. Naturally, there are many processes to achieve a goal, so it takes time, commitment, and patience. Remember that sooner or later, the efforts will bear fruit.
The same is true in the stock market, you need to maintain commitment and patience. Continue to study the stocks that are your target. After fully understanding and finding the right momentum, then you can buy the stock and look forward for the time to enjoy optimum profit.
Easy Equity Fund Investment with DBS Treasures
For investors who target the potential profit of equities but want to avoid the risk of buying stocks, try to invest in stocks through equity funds investment. The wealth of equity fund investment options can be a way to start investing in equities with much less risk. In this case, DBS Treasures offers a range of investment conveniences, including:
a. Investment management by professionals DBS Treasures equity fund investment products are managed by experienced and professional Investment Managers for optimum performance.
b. Sharp insights as investment guide DBS Treasures' proactive team of financial experts will analyse and communicates the market development as an investment guide, and design an intuitive wealth management strategy based on the latest market data and your risk profile.
c. Diversification to reduce risk With comprehensive investment product range on the table, you can gain many options to reduce the level of risk in your investment portfolio.
How to Profit from Equity Fund Investment with DBS Treasures
Join DBS Treasures priority banking by placing a minimum of IDR 500 million and enjoy the benefits of equity fund investment. You can also gain an intuitive wealth management strategy. DBS Treasures offers a seamless investment process, including in equity funds, with the following benefits:
a. Increase diversification Managed funds are allocated to several different instruments to reduce investment risk.
b. Daily liquidation Mutual funds can be sold based on the net asset value price on the same day.
c. Professional Investment Manager Your equity fund investments will be managed by experienced and professional Investment Managers partnered with DBS Treasures.
d. Government surveillance The equity fund investment from DBS Treasures has been registered by the government and supervised by the Financial Services Authority (OJK).
e. Transparent and comparable performance There is no difference in the information provided regarding mutual funds to investors, so investors can easily make comparisons between one mutual fund and another.
Mari Diskusi bersama kami sekarang untuk mulai berinvestasi obligasi ritel.
