PORTALJABAR, BANDUNG CITY - Shares listed on the Indonesia Stock Exchange (BEI) vary from business sector and the number of shares is quite large. Until mid-2024 there are more than 920 shares that can be traded. Meanwhile, most investors only have around 20 stocks in their portfolio.

Head of the Indonesian Stock Exchange (BEI) West Java Representative Office, Achmad Dirgantara, said that before choosing shares, it is a good idea for an investor to know their respective risk profiles. There is a group of shares called blue chip shares. These shares are included in the list of LQ45 index shares. Stock indices are created to measure stock price movements.

"As the name suggests, there are 45 shares listed in this index, consisting of blue chip shares or those with large market capitalization, and are known as large companies," said Achmad, Friday (29/7/2024).

Other characteristics of blue chip shares are that the share price is relatively expensive and the increase in share prices is also stable, not too big, because the company is stable. Blue chip stocks are suitable for both conservative and moderate investors. The downside is that if capital is limited, investors may not be able to buy shares in large quantities because share prices are already expensive.

Another characteristic of companies that have blue chip shares is that they already have a strong and long-standing brand and financially the company is already established and stable. Generally, blue chip companies distribute dividends or company profits every year to investors. So, even though share price volatility is low, investors still have other potential profits in the form of dividends.

However, according to Achmad, aggressive investors certainly expect much higher profits from rising prices of blue chip shares. There is a group of shares that are categorized as second layer shares, namely shares from medium or large companies but which have not been around for too long.

"Stocks from companies that are growing are believed to have great potential for growth in the future," he said.

Second layer shares have the characteristics of a market capitalization of medium value. Market capitalization is the product of the share price and the number of shares listed on the IDX. Then, the share price is not as high as blue chip shares, and share volatility is faster. BEI has the IDX SMC Composite stock index which contains shares with market capitalization between IDR 1 trillion to IDR 50 trillion. Then a stock index was also created in the middle group that was liquid or actively traded, with the name IDX SMC Liquid.

"Investors who are interested in investing in second layer shares which have the potential for greater profits with the potential for higher risks, can choose the shares on the IDX SMC index list," said Achmad.

'Why is there potential loss at mid-sized companies? "Because companies that are growing may have projects or are developing products that are still in the tender or testing process," he added.