Strategy and Risk of Investing in the Capital Market

Investing in the capital market, investors really realize that besides being able to get a profit but also likely to suffer losses.

This advantage or portion is highly influenced by the ability of investors to analyze the condition of stock prices and the possibility of price fluctuations in the Exchange.

Therefore, having intention in the capital market has no guarantee of obtaining capital gains, namely the difference in excess of the purchase price of shares and the selling price of shares.

Thus playing on the Exchange will also be very possible investors experience capital loss.

Collect several types of stocks in one portfolio.

Source: capitalmarketmalaysia.com

This strategy can minimize investment risk because the risk will be spread to various types of shares. On the one hand the opportunity to get a profit is quite large.

Investors, according to this strategy, first collect information and conduct analysis of various types of shares and then select several stocks in accordance with the ability of the fund, the selected shares and the shares are portfolios.

If among these shares there are those who experience deterioration in price, they can be released and then replaced with other better shares.

Then if the shares released earlier the price has reached the bottom, it can be considered to be bought back if the company shows good performance and prospects.

With this strategy the losses can be spread more.

Losses on one type of stock can be offset by profits on other types of shares.

Buy Sleep Shares.

Source: acumengroup.in

Stock sleeping is a stock that is rare or there has never been a transaction.

This share of sleep can be caused by the number of shares listed being too little or controlled by institutional investors and old shareholders (company founders).

Or it can also be caused because the performance of the company in question is not good or the business prospects are still not bright enough so that investors get less attention.

Such stocks usually tend to be undervalued.

Buying this stock of sleep requires investor patience towards investor patience towards the development of the company’s share price.

Strategy to move from one stock to another.

Investors who understand this strategy tend to be more speculative.

They will quickly release stocks which are estimated to have a deterioration in price or rush to buy shares which they think will experience a rate increase. This type of investor is not concerned with dividend distribution because of the nature of his short-term investment.

Investors like this must always follow movements or changes in stock prices at the Exchange.

Investment Risk

Source: moneyindia.com

The basic strategy of investors that will improve performance or value of investment portfolios to be better is to always follow this principle: “keep your alpha high and your beta low” This principle implicitly means

that how to measure risk (beta) so that you can compare the level of profit (alpha) you want to get.

Predicting risk in investment is a fairly complex thing and what is always a question for investors is how to measure an individual’s risk of a stock from the entire portfolio Investment risk in the capital market is principally related solely to the possibility of price volatility.

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