Indonesia’s stock market is experiencing turbulence. Following a sharp decline, the Indonesia Composite Index has yet to show signs of steady recovery. Negative global sentiment, weakening commodity prices, and rising inflation have only added to the uncertainty.
According to Dr. I Wayan Nuka Lantara, Head of the Management Department at the UGM Faculty of Economics and Business (FEB UGM), the current situation can be an opportunity for beginner investors to learn.
However, he emphasized the importance of managing personal finances wisely.
“This could be a great time to get in since many stocks are discounted. But that doesn’t mean you should buy anything. Choose ones with strong fundamentals and promising futures,” Dr. Lantara said during an interview at UGM on Tuesday, Apr. 9, 2025.
Dr. Lantara advises the public to secure their daily needs and build an adequate emergency fund before investing.
He referred to the recent trend of “mantap” (makan tabungan/living off savings).
“If your savings are thin and you invest without calculation, it can backfire,” he warned.
He reminded the audience that investing is not about luck or chasing short-term trends.
In economic instability, emotional decisions driven by profit-seeking can increase risk.
“Don’t let the desire for big returns cause you to abandon basic principles. If your income is 10 million and you invest 9 million or even take out a loan, that’s highly inadvisable,” the lecturer stressed.
He highlighted recent market anomalies in investment products.
For example, gold prices spiked and dropped again amid global economic weakness.
He also mentioned the falling value of Bitcoin and U.S. tech stocks, which have turned portfolios red worldwide.
He says these trends show that old patterns can no longer be relied on as benchmarks.
Despite the uncertainty, he believes investing remains essential to protect purchasing power in the long term.
“If money is only used for consumption, inflation will eat away its value. The only way to build a lifeboat for the future is through investment,” he said.
As investment is a long-term endeavor, typically spanning years, Dr. Lantara gave his market outlook for the next three months.
Based on his observations, he doesn’t see any strong signals of recovery and leans more toward pessimism.
“There are no clear incentives suggesting optimism. If this sentiment continues, the situation could become dangerous,” Dr. Lantara warned.
He urged the government to reassess the fundamentals and remap Indonesia’s export sectors, which rely heavily on commodities like coal and nickel.
“We need to quickly find new opportunities amid global pressures,” he concluded.
Author: Bolivia Rahmawati
Editor: Gusti Grehenson
Post-editor: Lintang Andwyna
Image: Freepik