Tuesday 25 December 2018

Strategies and risks of investment in capital market

Investment capital market, investors really realize that besides the benefit but also will likely suffer losses. Profit or partially the scolded by the ability of investors analyze the State of the stock prices and a possible rise in the price down on the stock. Therefore, intend in the capital markets do not have a guarantee to get a capital gain that is more than the difference between the purchase price and the selling price of the stock. Thus playing on the stock will most probably also the investor experience a capital loss.

Some of the strategies that can be used in investing in the stock exchange in particular in the form of shares, among others, the following:

Collect certain kinds of stocks in one portfolio.

This strategy can minimize the investment risk because of the risk it will spread out to different types of stocks. On the one hand opportunities to profit. Investors, according to this strategy, the first to compile first- information and do an analysis of the different types of stock then chose some stocks in accordance with the capabilities of the selected stock fund is the portfolio. In between there are having the stock obedience price can be removed and then replaced with another stock.

Then when the shares were removed last price has reached the bottom, can be considered to be purchased again if the company in question showed a good performance and prospects. With this strategy the losses – losses can be more spread out. Loss on one type of stock could be covered by profits from other stock to type.

Buy in the primary market and sold so noted on the stock.

This strategy can be used when investors have confidence based on the analysis that the company concerned has prospects for growing rapidly enough that the next few years so that its shares are expected to be experienced increase large enough at the time.

Buy stocks (investment in capital market).

Stock which is rare stock or sleep is no transaction. This bed can stock because the stock recorded the number is too high little or controlled by institutional investors and owners of the old shares (founder of the company). Or may cause due to the performance of the company in question was less good or its business prospects are still less bright so less gets the attention of financiers. Stocks such as these usually tend to price is undervalued. Buy this bed stock investor patience is required against the patience of investors regarding the development of the share price of the company in question.

The strategy of switching from one Stock to another.

Investors who said this strategy tends to be more be more speculative. They will quickly take off the price will have deterioration of purchase shares according to the assumption that they will experience a rise in the exchange rate. This is not concerned with the Division of dividends due to short-term investments. Investors should always follow the stock exchange.

Concentration on certain industries.

This strategy better suited to investors who actually controlled the condition of a kind of industry, so find out the prospects of its development in the future. Therefore, investors can choose some good stocks of companies that have businesses in the industrial sector concerned.

Mutual fund

investing by purchasing units include a publish or stock by mutual funds. This strategy is suitable for investors who do not have enough time doing market analysis or no access to information. This type of investment can maximize profit at a certain level of risk. Novice investors usually light choose this type of investment.

The risk of Investment in capital market

Strategies that will increase the investor base of the performance or the value of the investment portfolio for the better is to always follow this principle: "keep your alpha high and your low beta "implicitly this principle means that how to measure risk (beta) so it can compare the rate of profit (alpha) who wish to obtain. Predict risk in investments is quite complex and that has always been the question for investors is how to measure the risk of individuals a share of the overall portfolio of investment risks in the capital market in principle solely with regard to the possibility of price fluctuations (price volatility).

Risks that may be face by those investors, among others, the following:

The risk of purchasing power

The nature of the investors in addressing risk factors in capital market consists of two investors. Who don't like the risk (risk) and investors thus love the challenge of risk (risk averse). For this first category of investors will seek or choose the type of investment. That will provide profits totaling at least equal to investments made before. Besides that, investors expect earn income or capital gains in the not for long. However, if the investment takes 10 years to achieve a 60% profit while inflation rates during.

That period had risen to exceed 100%, then the investor will obviously receive advantages. That far less purchasing power compare to the benefits that can be obtain. Because of that. This purchasing power risk relates to the possibility of inflation. That cause the real value of income will be smaller.

Business Risk (business risk).

Business Risk is the risk of a decrease in the ability of getting a return which in turn will reduce. The ability of the company anyway (issuers) pay interest or dividends.

Interest rate Risk (interest risk)

Rising interest rates usually depresses the price of different types of securities. That fix income including stock prices. Typically, the interest rate hike is not running in line with the prices of capital market instruments. With rising interest rates, will obviously lose capital market prices.

Market risk (market risk)

When the market is passionate  generally the prices of shares are almost in the stock exchange rising. Otherwise, once the market doldrums bearish \ shares will participate also decline. Change market psychology could cause securities prices.

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