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12 Best Stocks in Indonesia for Long-Term Investment: How to Choose Blue Chip Stocks Wisely

Discover the top 12 blue chip stocks in Indonesia, their secrets for long-term investing, and a proven method to minimize risks while growing your wealth through the stock market.

Are you a beginner looking to invest in Indonesian stocks but worried about choosing the wrong companies? Many people start their investment journey feeling lost, often making random choices that lead to big losses. But what if you could learn from real experience, avoid beginner mistakes, and confidently select only the best-performing stocks for your future?

Why Choosing the Right Stocks Matters for Beginners

Many investors jump into the stock market with little research, sometimes buying companies they’ve never even heard of. The result? Potentially devastating losses, as seen in cases where investments dropped by over 70% because the companies chosen were in the wrong sector at the wrong time. But it doesn’t have to be this way.

The Costly Lesson of Random Investing

Jumping into unknown stocks without understanding the business, products, or financial health can lead to losses. That’s why understanding stock types, especially “blue chip” stocks, is crucial for anyone starting out.

What Are Blue Chip Stocks and Why Do They Matter?

Blue chip stocks are large, well-established companies with products familiar to most Indonesians. They are stable, financially strong, and have stood the test of time—even surviving major economic crises. Their high market valuation and reliable performance make them safer bets for long-term investors.

Blue Chip Criteria: What Makes a Stock “The Best”?

• High Valuation: Companies with market caps typically above 20 trillion rupiah.
• Wide Recognition: Their products are well-known and widely used by the public.
• Financial Stability: They consistently perform well and avoid financial trouble.
• Proven Track Record: They have survived and thrived through economic downturns.

Fun Fact: The term “blue chip” comes from classic poker, where blue chips are the most valuable!

How to Find Blue Chip Stocks in Indonesia

With over 700 companies on the Indonesian Stock Exchange, manually screening each one isn’t practical. Here’s a shortcut: use the LQ45 Index, a curated list of 45 top-performing, high-liquidity companies with strong fundamentals—reviewed every six months.

Leveraging the LQ45 Index for Stock Screening

Rather than analyzing hundreds of companies, start by focusing on the LQ45 Index. For deeper insight, compare the current LQ45 list with historical lists—such as the 2010 vs. 2021 indices. Companies that remain on the list for a decade demonstrate resilience, solid fundamentals, and long-term value.

From 45 to 12: The Ultimate Blue Chip Screening Strategy

By comparing LQ45 indices from 2010 to 2021, 23 companies were found to appear on both lists. These have consistently ranked among Indonesia’s best. However, not all are suitable for long-term holding due to industry cycles.

Understanding Cyclical vs. Non-Cyclical Stocks

Cyclical stocks—such as those in mining or energy—are heavily influenced by economic cycles and commodity prices, leading to unpredictable performance. Non-cyclical companies, like leading banks or consumer goods firms, tend to grow steadily regardless of economic swings.

• Cyclical Example: Adaro, a mining company, can see extreme ups and downs depending on coal prices.
• Non-Cyclical Example: Bank BCA, whose stock price grows steadily over time, weathering economic crises.

The 12 Best Indonesian Stocks for Long-Term Investment

After excluding highly cyclical companies, only 12 blue chip stocks remain that meet strict criteria for long-term growth and stability. These include household names from banking, consumer goods, and retail sectors.

Sample List of Top Blue Chip Stocks:

• Bank Central Asia (BCA)
• Bank Rakyat Indonesia (BRI)
• Kalbe Farma
• Unilever Indonesia
• Ace Hardware
• Gudang Garam
• And others from the LQ45 intersection (full list available in original data)

Practical Steps to Select and Invest in Blue Chip Stocks

1. Start by exploring the LQ45 Index.
2. Compare with older LQ45 lists to find companies with a long-term presence.
3. Exclude cyclical industries (e.g., mining, energy) for more stable returns.
4. Avoid businesses you don’t understand to minimize surprises.
5. Focus on holding for the long term—don’t obsess over daily price changes.

Key Insight

Even stocks with modest growth often outperform savings or fixed deposits over the long term, especially when factoring in dividends.

“The secret to successful investing is not timing the market, but time in the market. Choose proven blue chip stocks and let compounding do the work for you.”

How to Buy Indonesian Blue Chip Stocks Easily

Thanks to online brokerage apps like Indo Premier (IPOT), opening a stock account is now 100% online with zero initial deposit. After funding your account, simply search for your chosen stock codes (e.g., UNVR for Unilever, ACES for Ace Hardware), and buy directly in just a few taps.

Pro Tips for Beginners:

• Don’t rush—screen carefully and understand the company before investing.
• Keep learning! Use built-in tools to review company financials and fundamentals.
• Focus on growth and diversification within strong, well-known sectors.

Comparing Investments: Stocks vs. Savings vs. Deposits

Data shows that investing 10 million rupiah in Bank BCA a decade ago could grow to over 74 million today, far surpassing the returns from savings or fixed deposits—even after including dividends. Meanwhile, even stocks with “lower” growth like Gudang Garam ultimately beat traditional deposit interest over the same period once dividends are counted.

Conclusion

Long-term investing in Indonesia’s best blue chip stocks offers stability, growth, and peace of mind—even for total beginners. Forget market noise, ignore daily price swings, and focus on steady, proven companies. As your investment grows, keep upgrading your knowledge and reinvest in your future. Ready to build wealth the smart way? Share your thoughts below, follow for more tips, or let us know your favorite blue chip stock!

Label: Finance

Reference:
Title: Ini Dia 12 Saham 'Terbaik' di Indonesia!
Channel: Saham dari Nol
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