DIGIVESTASI - Stocks are one of the investment instruments that can provide great opportunities to increase wealth. However, without sufficient understanding, there is a risk of loss and even bankruptcy. The main benefits of investing in stocks include capital gains and dividends. Before starting out, it is important for potential investors to understand the risks involved as well as master the various analytical techniques available.

As a stock investor, there are many risks to face, more than just fluctuating market prices. For beginner investors, here are some mistakes to avoid:

1. Don't Invest All of Your Money

As an individual, you need funds for your daily needs and as a backup for emergencies. It's risky to allocate all your funds to stock investments in the hope of big returns. If you suddenly need emergency funds while your stock portfolio is losing money (**floating loss**), you may be forced to sell your stocks at a loss (**cut loss**), which will hurt your assets. Therefore, it is important to always have a reserve fund that is not invested, so that it can be used at any time.

2. Don't Follow Recommendations Without Consideration

Stock recommendations can be a source of information, but they should not be followed blindly. Investors should still conduct their own analysis before making a decision to buy a stock. For long-term investors, understanding **fundamental analysis** is very important. If you feel you have not mastered it, it is better to take investment training that is widely available online, or deepen your knowledge from various sources of literature relevant to stock investment.

3. Avoid entrusting money to individuals

Instead of leaving your money and investment account to someone who claims to be an expert, it is better to choose a safer investment instrument such as stock index funds or stock mutual funds. Mutual funds are managed by investment managers who are responsible for managing securities portfolios for their clients. Based on Financial Services Authority (OJK) Regulation Number 10/POJK.04/2018, investment managers are responsible for managing collective investment portfolios for the benefit of customers in a safe and professional manner.

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