Nowadays, investing in stock is getting popular. With the vast development of information transition, many investors encourage others to start investing. Besides, some people have also realized that saving is not profitable anymore. Their money will not develop in a huge amount. That is why investing in stock can be profitable. However, to start investing, you also need to know how to analyze the market. The following article will give you an insight about analyzing a stock, recommendations, and how to invest for a beginner.
How to analyze your stock
Fundamental analysis is an analysis based on the condition of a company, economic conditions, and related industries. Fundamental analysis generally uses company indicators listed in the company’s financial statements, such as Price to Earning Ratio (P/E), ROE (Return to Equity), and others. The world’s leading investor, Warren Buffet, believes in fundamental analysis in investing. Fundamental analysis is often used by long-term investors such as Warren Buffet to filter stocks that fall into the good category. Meanwhile, technical analysis is an analysis based on data regarding historical prices that occurred in the stock market. In the application of technical analysis, predictions to buy or sell shares are made by looking at historical charts of stock movements. Users of technical analysis are generally referred to as traders who make short-term investments such as daily investments. One of the most famous users of technical analysis is George Soros.
Then if you ask which analysis is better to use, the answer is it depends. Each analysis has its own advantages and risks. Investors have their method of determining which shares to buy. Technical analysis is a good method to analyze current market conditions and invest in a short period. Meanwhile, on average, the voters of fundamental analysis are investors who have high confidence in the company’s business and will determine the company’s price so that they are not affected by stock price fluctuations in the short term and tend to invest in the long term. In addition, some investors choose to combine the two analyzes in making transactions. Ultimately, the best analysis to use in investing depends on the investor’s own investment style.
Investing stock for beginner
Becoming established and financially stable is certainly the dream of many people. Are you one of those people? In addition to working hard, one other way you can achieve that dream is by investing in stocks. Unfortunately, there are still many people who are afraid to try this method. In fact, by investing in stocks, you can get passive income which, of course, supports your finances. Well, for those of you who want to know an easy way to invest in stocks, here are some steps you can emulate!
- Buy Good Stocks When Prices Are Down
Today, many novice investors have the understanding to avoid falling stock prices. However, that understanding is not entirely correct, you know! You see, there are some cases where when buying shares, when the price drops, the price goes up again or even higher. By using this method, of course, you can get the maximum profit in the future. But still, pay attention to other aspects; yes, don’t buy stocks right away just because the price is going down.
- Choose Securities with Small Transaction Fees
How to invest in stocks can be easily done by anyone. The first step you need to do is open a securities account that a securities company facilitates. You can start investing in stocks after you open a securities account by top-up funds to a securities account. Every time you transact to buy shares, the securities company will charge a transaction fee. The transaction fees charged can be different for each securities company. Usually, the transaction fee charged is 0.19% for purchases and 0.29% for sales. But some securities companies only charge 0.15% for purchases and 0.20% for sales. So that the profits you get are getting bigger, of course, you have to pay attention to the number of transaction fees of the securities company you choose. By choosing a securities company with low transaction fees, you can maximize profits. But keep in mind; usually, the transaction fee is determined by the security company’s quality of service and application. So choose a securities company with transaction fees that best suit your finances.
- Choose Long-Term Investment
The next way to invest in stocks is by choosing long-term investments. Usually, long-term stock investments are safer and more profitable. In addition, this way of investing in long-term stocks has a lower risk if you choose the right company.
- Choose Banking Stocks or Consumer Goods
The next way to invest in stocks is to choose stocks that come from companies engaged in banking or consumer goods. Why? Both of these companies can be said to be companies with simple businesses and are considered to be able to make significant profits every year. So, stock prices will usually go up and tend to be stable. However, some people are more interested in purchasing stock that is mining or real estate sector. One example is IPOB stock. IPOB stock is actually owned by Social Capital Hedosophia Holdings II, a blank check company. The news said that IPOB would like a merger with Opendoor, a real estate company. As the need for real estate is always needed, then it can be your choice.
Is IPOB stock is a good stock?
If you want to have a real estate stock and expect it to grow in 2021, you can choose IPOB stock. The company is merged with Opendoor, a real estate company. In the long-term investment, that is a year investment, IPOB has good growth. If you want to have a longer period of investment, a five-year investment can give you profit. If you invest $100 this year, in the next five years, your stock will reach up to $790.59. Even it seems promising, and you still have to do some research to avoid the loss. Besides, the political and economic situation can also affect the market.