5 Ways of Stock Investment Strategies to Get Big Profits

5 Ways of Stock Investment Strategies to Get Big Profits - Today's youth, who are just going through a new phase of youth work, of course, have begun to think about proper income management. In order for the income from your hard work to develop optimally, it is time to start investing for those who now have their own income. By investing, you have the opportunity to develop funds faster and achieve better results. One that you may want to consider is investing in stocks. So what is your stock investing strategy for profit? Read this article.

Investing in stocks allows the money you are investing to exceed inflation. In fact, in addition to the great opportunities for making a profit, investing in stocks also carries a high risk of loss. However, with the right strategy, investing in stocks will double your income in the long run. What stock investing strategies should you consider?

5 Ways of Stock Investment Strategies to Get Big Profits

Stock investing strategies to consider

1. Saving in stock

The stock of savings is usually invested in a certain amount of money in some kind of stock over an extended period of time. It is hoped that stocks that are bought regularly will rise in value in the future, so that when they are sold, they will provide capital gains.

In fact, savings stocks use a Average Dollar Value (DCA) investment strategy that can be applied to any type of investment. You buy the same share over and over again, ignoring the movement in the share price, in order to own as many shares as possible. Warren Buffett, one of the richest men in the world and known as a leading stock investor, is one of those who implemented this DCA strategy.

An example is if you regularly own ABCD shares for 3 years at an average purchase price of IDR 2,000 per share. During your tenure as a shareholder of ABCD, you have received several dividends. When you enter the fourth year, you want to sell all ABCD shares you own. ABCD's share price at that time was Rs 4,200 per share. You have a 110% chance of making a profit because the selling price of the stock has gone up significantly.

2. Trading stocks

Stock trading literally means stock trading in which the stock is traded for a short time. The goal is to exploit the short-term difference in the movement of stock prices, from 15 minutes a day to the maximum of the week.

The trader is more focused on paying attention to market sentiment and conditions, rather than the underlying condition of the stocks he wants to buy. The analysis used to buy stocks is technical analysis. One well-known investor who has adopted this stock trading strategy is George Soros.

If you are interested in implementing a stock investing strategy through stock trading, make sure you have mastered technical analysis of stocks and have sufficient time to track market movements and stock prices.

3. Investment value

The third strategy that you may want to consider if you are looking to invest in stocks is the value investing strategy. It is an investment strategy that focuses on buying securities or securities. This is the first time that an investor teacher, Ben Graham, introduced it in 1934. Target stocks are stocks that are still below their fair value (undervalued) and are believed to be overvalued in the long term. Thus, when the day is sold, the investor is more likely to make a profit.

According to Tejo Hedayat, a practitioner and author of Value Investing, there are three steps to an investment strategy that you must go through. First, you need to find inventory that is cheaper than it should be. Second, the selected stocks represent companies with good (baseline) financials and stable records. Third, make sure the shares are held by companies with sound management and good corporate governance.

4. Investment in income

This stock investing strategy focuses on buying stocks from companies that regularly offer dividend profit distributions. An income investing strategy is suitable for those of you who are expecting regular income from owning stock in a company.

Investors using this strategy usually hold stocks for a long time (buy and hold) because they focus more on dividend income than on pursuing capital gains. However, there are those who apply a buy and sell position, that is, they buy shares in a company that wants to distribute profits, and then sell them when the profit is made and when the price is higher.

5. Investment growth

A growth investing strategy seeks to find stocks that can generate profits and generate high income growth in the future. Unlike investing in value, which emphasizes the importance of valuing the value or fair price of a stock (valuation), investing in growth is not really about valuing the stock. Most importantly, stocks are considered to have significant upside potential.

Thus, investors using this strategy do not mind buying stocks that are already high if they believe that the signal that the stock is still going to rise is still strong in the future.

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