There are many all kinds of investments what you can do. Investment itself is an alternative that can be done to achieve various goals, such as: buying a house or car, paying for children's education or achieving financial freedom.
In this article, we explain to you the meaning of investment and the types of investments you can make. Come on, just read the article below carefully!
What is investment?
Investment is an activity of placing capital in the form of money or other valuable assets in an object, institution or party with the hope that the investor will receive a profit after a certain period of time. Investment itself can also be referred to as investment because of the hope of getting profits in the future.
Generally, funds or assets invested by an investor or investor are developed by the institution or party that manages them. The profits from the development are then distributed to investors as compensation in accordance with the agreement between the two parties.
Investment is divided into two, namely short-term investment and long-term investment. The following describes the various types of investment
1. Short Term Investment
For some people who are looking for additional funds for urgent needs, such as: increasing the budget to buy a house, preparing for a wedding, paying for hospital care, and various other needs, short-term investment is the right choice.
If you pay attention to the capital, short-term investments can be started with small capital, not even a little with only hundreds of thousands of rupiah. However, even though you can start with small capital, short-term investments are also risky. Therefore, investors must take the time to monitor stock movements.
Short-term investments are investments that are intended for a shorter period of time compared to long-term investments, usually in less than one year. Common types of short-term investments in Indonesia include deposits, blue chip stocks, bonds, fixed income mutual funds and government bonds. The goal of short-term investing is to generate income while also protecting funds from potential losses.
2. Type of long-term investment
Long-term investments aim to get fresh funds in the future to meet needs, both planned and emergency, such as Hajj or Umrah expenses, health care costs, buying a house, marriage, children's education, and so on. …
Another goal of long-term investing is to get regular passive income such as interest, in dividends, or interest on rent. To get maximum results, long-term investors usually start investing with quite large capital. But actually this type of investment can be done even with small capital, it's just that the profits are not optimal.
Examples of long term investments are:
- Shares in companies that are expected to grow and generate long-term profits.
- Real estate or property, such as buying a house or land to sell or rent at a later date at a higher price.
- Investments in infrastructure, such as buying shares in companies engaged in energy or transportation.
- Investing in a business, such as buying stock in a company or investing in a venture that is expected to grow and generate long-term returns.
- Gold, silver or other precious metals, it is expected that the price will increase in the long term.
- Equity Mutual Funds are expected to grow in the long term by following the performance of the companies in their portfolio.
All kinds of investments
There are various types of investments you can make. Here are some types of investments that are currently popular:
Deposits or investments are one type of investment that is of great interest because it is very simple and easy. If you save a certain amount over time, you will earn interest back.
The advantage of deposits is a fixed rate of return, and the promised interest rate is guaranteed. Unfortunately, you cannot withdraw money until you reach a pre-agreed time frame.
Apart from deposits, stocks are also one of the most attractive types of investment. Technically, you'd buy stock on an exchange, then you'd get a percentage of ownership of the company whose stock you're buying. The greater percentage of shares you own, the stronger your power in the company.
The benefits of investing in stocks are in two forms, namely the benefits of capital gains and dividends. Capital gains can be monitored every minute, hour and day. That is, the stock price of a company can change at any time.
While dividends are profits received based on the distribution of company profits. The profit sharing will be adjusted according to the percentage of your share ownership.
Different from deposit whose profits are fixed, the profits of stock investment are not fixed and uncertain. However, you will benefit more if the company you invest in grows.
Bond is a type of investment that is almost similar to stocks. The difference is that the profits you get are more dynamic and the amount of money you get tends to be more guaranteed.
For example, you buy a bond worth IDR 5,000,000 with a tenor of 10 years with an interest of 10%. However, before the period ends, you can withdraw money with an adjusted interest amount.
For starters, you can buy government-issued bonds. This is because the government has a lower default risk than corporate or corporate bonds.
4. Mutual Funds
Mutual funds are investments where the funds raised by different investors are combined into one and then invested in different capital markets.
Mutual fund investment is a form of investment that collects funds from several investors to be invested in various types of assets, such as stocks, bonds, deposits, or property. Mutual funds are managed by an investment management firm that is responsible for managing and investing the funds raised.
Mutual funds allow investors to diversify their investments by spreading risk across different types of assets, making it safer than investing in only one type of asset. Investors can buy mutual fund units with relatively small capital and benefit from the performance of the mutual fund portfolio.
There are two types of mutual funds that are commonly known, namely equity funds and fixed income mutual funds. Equity mutual funds have a dominant portfolio composition of company stocks, while fixed income mutual funds have a dominant portfolio composition of fixed income instruments, such as bonds.
Mutual funds can be divided into 5 types, namely: money market mutual funds, stock mutual funds, fixed income mutual funds, mixed mutual funds, and index mutual funds.
If you are interested in making one of the investments described above ie deposit, you can do it in OK! bank. Enjoy savings in the form of a time deposit that functions to provide a trusted, safe and profitable fund deposit service.
We hope that the explanation of various types of investments that are popular among Indonesians in this article can help you.