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Understanding Mutual Fund Investment Opportunities and Risks for Millennials




Investment is no longer a taboo subject, the opportunities and risks of mutual fund investment have at least been heard a little by the productive age to adulthood. But some people underestimate the importance of investing at a young age, even think it's better to enjoy life while young. There's nothing wrong with enjoying life at a young age, but think again about being able to enjoy life to an old age.

1. Knowing the Opportunities and Risks of Mutual Fund Investment so you don't make the wrong investment

Broadly speaking, Mutual Funds are a forum for investors to collect their funds which will then be invested in the Securities portfolio by the Investment Manager. In the field, the Investment Manager will be assisted by experts in investment management, namely the Management Team and the Investment Committee, one of which is the OJK (Financial Services Authority). You don't need large funds to invest in Mutual Funds, enough with cold money or unused money for whatever interests you have.

2. Understand the Types of Mutual Funds

In fact, Mutual Funds have various types depending on the level of risk, understand it well so you don't make the wrong investment. Adjust it to your financial capabilities and the role of your personal emotions so that you can invest safely and comfortably. Here are some types of mutual funds that you must know:

Stock Mutual Funds

This mutual fund has the highest risk profile among other types because the returns provided are also very high, reaching 18 percent in a year. It should be emphasized that Equity Mutual Funds are a type of long-term investment, so don't be surprised if there is a decline in value due to fluctuations in the capital market in those years. The right duration to invest in stocks should be more than 5 to 20 years, use stock-type mutual funds for retirement and children's education needs.

Mixed Mutual Funds

As the name suggests, a Mixed Mutual Fund is a type of investment mix between stocks and bonds. The risk level is medium or smaller than Equity Mutual Funds, as well as the returns given will not be as high as stocks. You can use this type of investment for purposes over 3 years, such as buying a house or personal transportation needs.

Bond Mutual Funds

Bond Mutual Funds ranks third with a medium-small risk level with a return or return equivalent to that level, yup...the value will be under Mixed Mutual Funds. This investment contains corporate and state debt securities and you can use this type of mutual fund for purposes under 3 years, such as making a dream wedding reception.

Money Market Mutual Funds

This mutual fund is a type that is very calm and much in demand by novice investors, the risk it has is very small compared to other types of mutual funds. Contains cash funds or bonds that will mature so that the returns given will be smaller but slightly above deposits. Money Market Mutual Funds are very suitable for short-term investments, which are less than one year, the goal is to keep your savings liquidity stable and even get returns, although small but very meaningful.

3. Not Grandiose, Only IDR 10,000!

Ease for convenience is always provided to make it easier for young people to start trying to invest. With only ten thousand rupiah, you can try investing in any type of mutual fund. Keep in mind that the prices listed for each type of mutual fund will be different, please choose the type of investment that best understands and matches your source of income.

4. Steps to Start Investing

Now more and more applications or platforms are developing to make it easier for you to invest, such as Bareksa, Bibit, to Magic which can be a reference for choosing the right investment management. It should be understood that the price determinant of Mutual Funds is the success and strategy of each investment manager in managing the finances of their investors. Recognize the advantages and disadvantages of investment management that suits you.

After determining the platform and understanding the types of mutual funds, the other most important thing is to determine the investment period. Determine your goals in advance, the most desired needs in the future, invest in a wedding fund or retirement fund. Then setting the time, for example 3 years or 10 years. And finally, adjust it to the type of Mutual Fund that you have understood earlier, it reduces unwanted risks. Other things to note you can see on the following page .

5. There's an Opportunity, There's a Risk!

In investing there is always a risk because the investment will not always be in good condition. Knowing earlier about the risks will be much better not to cause excessive worries. Here are some risks that mutual fund investors must know:
  • There is no guarantee from the government, if the mutual fund suffers a loss, it will be borne by each investor.
  • There is no life protection because it is purely an investment and cannot be replaced or continued by any party.
  • Self-discipline, desire and knowledge of the capital market are very much needed because if they are negligent, investors will lose momentum.
  • Mutual funds can also be dissolved at any time or temporarily suspended, make sure to choose mutual funds that have good performance.
  • Disbursement of funds will have to wait.
An understanding of investment really needs to be applied at a productive age, the number of young investors in Indonesia has skyrocketed since the pandemic. The conditions of increasingly limited employment opportunities, termination of employment contracts, business losses due to regional restrictions are carried out by the government to break the chain of distribution. By understanding the opportunities and risks of mutual fund investment, it is hoped that the Indonesian people will have a good and stable economic situation in the midst of the pandemic.

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