Some Things Beginner Investors Need To Learn Before Starting – Many people want to live prosperously in the future. If you are one of them, of course investment can be the answer. But, how, yes, how to start investing? What are the things to pay attention to? Come on, take a look at 10 tips that can help you, the novice investor, start investing!
Start as early as possible
The time factor plays an important role in investing. The younger you are when you start investing, the easier it is to prepare for your needs and achieve your goals in the future. Adjust the length of the investment period, the risk profile you have, the initial capital, and the monthly investment commitment you plan. With this feature, hopefully the investment plan will be more focused.
Define specific investment goals
Every investment should have a defined purpose. Some common investment goals include preparing education funds, retirement plans, buying houses/apartments, buying vehicles, property renovations, tourism, accelerating mortgage/KPA repayments, or preparing retirement funds. If you have the services of a financial planner or advisor, you can consult these plans to discuss the timing and investment instruments. If you don’t have a financial advisor, that’s okay too, just choose one dream or goal that you think is important and makes you excited to start investing.
Allocate funds for investment consistently
Ideally, you can allocate 10% to 30% of your monthly income for investment. Make sure the money used to invest does not interfere with daily needs, debt repayments, or emergency funds. Always remember that investing not only offers benefits, but also carries risks. Don’t let the risk occur, your survival will be disrupted.
For novice investors, start with the percent of fund allocation that makes you comfortable, then keep it consistent. Make investing activities a fun habit. In line with increasing income, knowledge, and confidence in investing, you can increase your investment allocation on an ongoing basis.
Determine the timeframe and target of the funds needed
Determining the investment period will affect the nominal investment and the type of instrument selected to achieve the required funds. The shorter the investment period, the nominal that must be allocated is usually relatively larger, the choice of instruments will also fall on the safer/stable or low volatility. Example: friend, 25 years old, determines the investment goal to go for Umrah, in the amount of 30 million Rupiah. If wants to achieve this goal in 5 years, for example through a Money Market Mutual Fund, can start with a capital of less than IDR 500,000 to set aside every month. However, if you want to perform Umrah faster, for example 3 years, then must be willing to allocate more than IDR 500,000 using the same instrument.
Again, time is an important factor, yes! Determine your specific timeframe and target funds before starting to invest.
Start investing by way of indirect investment for novice investors
The capital market is synonymous with stock products. However, did you know that there are two choices of other capital market products, namely Bonds and Mutual Funds?
For novice investors who are still not confident in trading stocks, the solution to starting capital market investment can be indirectly, namely by buying Mutual Fund products. Through the Investment Manager, investors have a variety of choices ranging from Money Market, Fixed Income, Mixed Mutual Funds, to the more risky Equity Mutual Funds.
After you understand and have more confidence in Mutual Funds, you can move on to direct investment, securities (Retail Bonds and Stocks). Furthermore, you can even start your own real business and start joining a business partner that suits you.
Study carefully the various investment alternatives and their aspects
Before deciding to invest in one instrument, you need to look at investment aspects such as the level of risk and return. For example, if the risk profile in your investment is quite low, then make sure the volatility of the issuer or instrument you will choose is in the conservative category. If you plan to achieve your investment goals with a projected return of 7%, then learn whether this instrument will be able to meet your expectations.
Don’t forget the projections of experts about future economic and business developments combined with your investment goals. Is there a lot to learn? Relax! Remember, investing should be fun. For beginners, the key is to start immediately, just start on conservative instruments or with a small nominal.
Choose a financial asset investment that is supervised by the OJK.
With the increasing public interest in investing, many financial institutions have also emerged in Indonesia. How to choose the right partner in investing? For the capital market industry, all financial institutions must be registered and supervised by the government, in this case the OJK. Make sure you choose a company that has official permission from the Financial Services Authority (OJK) and is registered and supervised by the OJK. You can always get the latest list of legal securities companies on the official OJK website, here. In addition to the legal aspect, understand also his track record, leadership, and experience in running the capital market business in Indonesia. Choose a trusted one!
Don’t put all your eggs in one basket.
For novice investors, choosing just one instrument takes a lot of understanding, doesn’t it, let alone studying many instruments for diversification? Calm. Everything doesn’t have to be done at the same time. All can be done gradually, one by one.
For example, a friend who has a conservative risk profile chooses to start investing with Money Market Mutual Funds. After 3 months of routine investing every payday, I started to understand how the investment works and moves. Then he began to be confident, taking another step towards diversifying his first instrument, namely State Bonds (SBN). choose SBN because the principal and yield are guaranteed by the government, so it is classified as safe, this is still in accordance with its low risk profile.
After being routinely in Mutual Funds and SBN instruments, now he is more daring to step into investing in shares. began to diversify the two, by studying the LQ45 index on the official website of the Indonesia Stock Exchange. After learning how to analyze the fundamental ratios of several companies, he began to choose BBRI and ICBP as his first blue chip stocks. This is the process buddy! Not short, but in accordance with a consistent risk profile and willingness to learn in investing in the capital market.
Potential Profit must be in line with Potential Risk.
When you start investing, you definitely want to get big profits in a fast time, right? Eits, but don’t be easily tempted by a form of investment that provides high returns, pal! Investment offerings with high returns are usually accompanied by high risks. As a simple example, stock instruments have a higher profit potential than Money Market Mutual Funds. However, the risk of fluctuations in stock prices is much greater than the potential fluctuations in Money Market Mutual Funds, which tend to be very small. The potential profit should be in line with the potential risk of an investment product. So, if you get a lucrative investment offer with minimal risk, be alert right away!
Perform periodic supervision to monitor investment performance.
If you have chosen an investment product, you must remember to evaluate the performance of the product from time to time. For stock investments, you can do this by comparing the current stock price with the price when you bought it. Is it increasing or decreasing? You can also compare these shares with the market reference price or the Jakarta Composite Index (JCI).