5 simple ways to play stocks with small capital to make money big

If you are a novice investor, starting to play with small capital stocks can be a safe choice. Playing stocks is indeed a high-risk investment, but with high income, this investment can make you earn a lot in the future.

Stocks are classified as high risk because as an investor you can experience losses, aka capital loss. On the other hand, you can also reap profits of up to 20 percent or more in just one year.

With a profit of up to 20 percent, it seems like playing stocks is tempting too, doesn't it? Therefore, start trying by playing small capital stocks.

At least this can help you identify this high-risk investment field and put in place a more careful and safe stepwise strategy in your favour.

The first thing you need to do is avoid doubts. The first step, start learning how to invest wisely by knowing your risk profile.

Next, you can see the following safe tips and tricks.

1. Play stock? Get to know securities with small transaction fees

There are many securities companies or stock brokers that offer different transaction fees. In stock investment, investors must open a securities account (customer's fund account) and this is facilitated by this securities company.

After the account is created, you can add some funds to the account. The money in that account is what you can use to design an online portfolio.

Well, the transaction fees charged by this broker are the costs of buying and selling. This fee is also a source of income for the brokerage company.

The amount of transaction fees charged is between 0.15 percent to 0.30 percent for sales and 0.16 percent to 0.20 percent for purchases.

You will certainly benefit from a small transaction fee. So, choose a securities company wisely, while preparing the documents needed to open a securities account

2. Make the right count to start

You can start with a budget of Rp. 500 thousand, by targeting several stocks at a price of Rp. 50 / share.

In investing, you will know the lot unit, where one lot consists of 100 shares. If per share is sold for Rp. 50, then if you want to buy one lot, you only need around Rp. 5,000.

For starters, you can choose some safe stocks, usually in the blue chip category for investment.

If you really want to be serious, you can set aside 10 percent of your total income to a securities account and buy lots that you trust to work.

3. In addition to blue chips, there is also such a thing as the LQ45 Index or IDX30

If you update the daily newspaper, you will know the JCI. JCI or Composite Stock Price Index shows a graph of stock price movements with closing prices every day.

Meanwhile, there are many public companies listed on the Indonesia Stock Exchange. In April 2019, there were 22 indices that showed stock performance.

As a beginner, you can check stocks with good performance categorized in the LQ45 or IDX30 index. The list in this index is categorized as very high liquidity and good company fundamentals.

These stocks are known as blue chip stocks. Having several lots of shares in companies in this index certainly provides security for you with small capital.

There are four stocks in this index whose price is still below Rp700, including WSBP, SRIL, PWON, and ELSA.

4. When playing with small capital stocks, sector diversification is good, but you can focus on the banking sector or consumer goods

If you are familiar with stocks in the IDX30 or LQ45 index, you can try to focus on stocks in certain sectors to start playing with small capital stocks.

Two companies that are generally recommended are stocks from banks and consumer goods. These two sectors are okay because they are sectors with simple business.

In addition, the products of these two sectors are used by the public, automatically in a year there will be a significant change in the profit of this company

5. If you feel a little loss, try playing the average down strategy

The average down strategy is okay for those of you who are just starting out but feel down because your portfolio has plummeted.

If you see a 2 percent loss in your portfolio, try buying one that's falling in price. You can buy gradually when the price in the market is experiencing a decline.

This will prevent your investment value from falling freely when you play stocks and keep your portfolio updated with market conditions. When market conditions recover, you will certainly get an increased profit from this previous purchase.

In addition to these five tips, when starting out, you need to consider whether you intend to buy as a short-term or long-term investment.

Just imagine the benefits that you can get if you intend to buy in the long term.

When BCA became a public company and conducted an IPO in 2000, its share price was only Rp. 500, now the price has reached Rp. 32,500/share. Can you imagine what percentage of money you will get if you choose the right company for investment?

So, come on, look at your needs and what stock strategy is the most appropriate for you over time