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Understanding of investment

Investment is placing a certain amount of money, capital or funds in the hope of obtaining additional or benefits from developing the value of the money. In Investing applies the law that the higher the return offered, the higher the risk that must be borne by the investor.

Investor

In the financial world, investors are representatives to mention individuals or institutions (both domestic or non-domestic) that make an investment or form of investment in accordance with the type of investment they choose, either in the short or long term.
So simply we can conclude if the investor is a term for people or institutions that make investments.
Return and Investment Risks
The thing that needs to be noted is “Investment always has two sides, namely return and risk”.
Returns or profits are:
When the investments we make experience an increase in value, profits then the money we invest will also increase.
While the risks are:
When the investment that we do experiences anxiety, then the risk of failure is also borne by the investor (investor).

Benefits of investing

1. Long-term income potential
2. Pasive income (blocking income that continues to increase by itself)
3. Investment money is designed to move, develop and increase in value
4. The value of money can always adjust to its value on the market (does not decrease)
Risk of investing
1. Possible to experience a decrease in number
2. likely to experience losses
3. It takes a long time to be able to make a profit
4. The less amount of money invested the lower the profit gained

Various types of investments

1. precious metal
Precious metals such as Gold are the most accepted valuables in the world after foreign currency. The price of gold will follow the increase in the currency values ​​of the G-7 countries (namely America, Japan, Germany, England, Italy, Canada and France). The higher the increase in the value of foreign currency, the higher the price of gold. Besides that, the price of gold is usually also proportional to inflation. The higher the inflation, the higher the price of gold will usually be. Often the increase in gold prices exceeds the increase in inflation itself.

2. Property
Investment in property means investment in the form of land or house. The benefits that can be gained from the property are, renting out the property to another party so that they get rent or sell the property at a higher price.
Examples in daily life:
Company A wants to open a housing business, then you invest your money (investing) about 10 percent of the capital needed for the cost of making the housing company, that means you have the rights / shares of about 10 percent of the company. When the business experiences an increase after the housing, then you will benefit from the 10 percent of capital that you have invested. Your money will increase automatically, which is called return.
Likewise vice versa if the housing turns out to … Read More

The following is a review of 4 examples of investment in accordance with the level of risk borne, but comparable to the profit (profit) that will be obtained.

Type of investment in cash
In the form of cash funds it can be understood that this promising investment is not much different or similar to ordinary savings, deposits, and mutual funds.
With a very small level of risk, the profit opportunity that can be obtained is only in the range of 6% per year from the amount of funds invested.
As a simulation, we take the example if an investor saves money of 100 million, then within a year will only get a profit of 6 million or about 500 thousand for each month.
Find out more about how to calculate, and how much the interest value will be obtained from the deposit and savings investment model

Fixed income investment
Understanding this type of investment, investors are usually offered in the form of bonds or bonds and fixed income funds.
The advantage of this type of investment is that it can provide fixed income for investors, it can be per month or it can also be annually.
The profits that investors will later get will not be greater than the type of cash investment. But this second choice has an advantage in the minimum level of risk if there is a global economic turmoil, especially the money market, then the value of investments that have entered will not be at risk of being lost or reduced.
Benefits that can be obtained when investing in Fixed Income Mutual Funds are:
• Investment diversification. Investment will be spread in a variety of instruments, securities, time deposits and medium and long term bonds so as to provide more optimal results.
• Liquidity. Investors can sell Mutual Fund products at any time when they need cash.
• Professional Research Team. Investor funds will be handled by a professional investment manager research team who can provide bond investment portfolios with optimal results.

Stock investment (capital market)
The stock or capital market business is not new to the middle class or even ordinary people. Shares can be interpreted as a proof of ownership of a particular company.
The type of stock itself is divided into two groups, namely the open company shares and closed company shares.
Like the form of a franchise business or for example a type of home-based business where you are contributing to the capital, this is included or can be referred to as a closed company stock.
Whereas the category of publicly listed companies is usually those that have a large market capitalization value.
Although including investments that have a high risk, but this option includes the type of investment that is very profitable and so tempting because it has a better chance of achieving a high enough profit.
How to Invest in the Capital Market
At least after we understand a little about the basic rules of investing and opening a customer … Read More