Mutual Funds, Definition and How to Invest in Mutual Funds
Netgenz - Stock | Hello friends, on this occasion we will discuss Investment continuously about So Want, Investment - Indonesia's Popular Investment Type, namely about Mutual Funds, Definition and How to Invest in Mutual Funds. Investment is one of the prospective activities as an option to strengthen your financial situation. What's more for those of you who are still young, active, and productive. Therefore, it should be, investment needs to be started from the beginning. Currently, many investment products can be reached by anyone who wants to start investing, such as stocks, bonds, deposits, gold or precious metals, property, insurance, and mutual funds. Talking about mutual funds, this investment product is one of the most popular products, easy to understand, and suitable for novice investors. Going from the profits that are peddled, please know the next understanding of mutual funds.
Mutual funds are an investment product in the form of a group of funds that are regulated as investment capital to be converted into various types of products, such as stocks, bonds, and other financial and investment products. The collected funds are managed by an investment manager, management, or professional agency that works to manage your investment activities, including mutual funds. Understanding mutual funds are easy to understand, so the ability to invite the attention of young investors or beginners to start investing.
With a brief understanding of mutual funds for you, novice investor, you need to hand over money to the investment manager held by the bank faction and insurance provider to select and buy the desired mutual fund. Then you need to pay attention to the movement and changes of your investment while adding funds, such as saving. Therefore, mutual funds are suitable as investment products for beginners and those of you who do not have enough time to manage investments independently.
Mutual fund investment benefits
As with other types of investment, mutual funds offer competitive returns to strengthen your financial situation. Understanding mutual funds fundamentally can be one of your supplies in investing at a young age. The following is an understanding of mutual funds regarding the benefits provided for those of you who are just starting to invest.
1. Easy to learn
As previously explained, understanding mutual funds are not difficult. You need to visit an investment management operation such as a bank or insurance supplier to start buying mutual fund products. Together with the investment manager, you will get the more detailed information regarding the understanding of mutual funds and some of the products that you will invest in. After a successful purchase, you will receive a report regarding the monthly changes in mutual fund investments that have been made by your preferred investment manager.
2. Diverse offers
When you start to understand the meaning of mutual funds, you will be given knowledge about some of the mutual fund products that are available to you. These mutual fund offerings generally consist of two, there are conservative mutual funds and sharia mutual funds. As an investor, you will be given the flexibility to choose which type of mutual fund product you want. You will get information regarding what agencies provide mutual fund products that you can buy for investment.
3. The initial capital is relatively affordable and the risk is relatively low
In contrast to stocks that require you to buy in-unit lots with a fairly large accumulation of funds. By understanding the understanding of mutual funds in business transaction factors, you can buy mutual funds according to the numbers you have prepared or put aside, you should save. The percentage of profits that you get will be fairly given according to the investment capital you have. By spending money according to your needs and circumstances, the risk you get in this mutual fund investment tends to be small and can be calculated.
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4. Professionally and transparently managed
As your investment manager, the investment manager should have high knowledge and experience, and good professionalism. Before becoming an investment manager, these administrators are required to obtain a certificate to maintain credibility and understand the mutual fund as a whole to help the investments of various customers. The investment manager will always provide an open report on changes in your investment, so you can also feel comfortable and safe to always invest and understand mutual fund understanding further.
5. Access investment through online channels
In this digital era, it will be quite annoying if financial business transactions are not optimized online. To provide relief on your investment, business transactions and information related to your mutual funds can be carried out online. You can access it through mobile banking and internet banking programs, anytime and anywhere.
After understanding the understanding of mutual funds and their benefits, you also need to pay attention to the risk opportunities in investing in mutual funds. Because in essence, every investment does have a risk, even at another level. The risk that can be found in mutual fund investments is the shrinking of the value of the unit of involvement or the value of the mutual fund product that you have. This risk generally comes because there is a reduction in the impact value of stocks, bonds, or other securities that are calculated on the side of the mutual fund. In addition, another risk that often comes is liquidity problems. This risk is generally felt by the investment manager who will resell the same mutual fund units according to the investor's decision.
Types of mutual funds for just starting out
Information about the advantages and disadvantages of investing in mutual funds has been explored, then you need to understand what types of mutual funds are available for you to own.
1. Money Market Mutual Funds
Understanding money market mutual funds is an investment that has been made in the type of money market investment instrument with a period of less than a year. Investment instruments sold in money market investments are generally in the form of time deposits, certificates of deposit, Bank Indonesia Certificates (SBI) and Money Market Values (SBPU), and other money market investment instruments. Money market mutual funds have a lower risk profile because they aim to maintain liquidity and maintain investment capital.
2. Fixed Income Mutual Funds
Although they have a higher risk than money market mutual funds, regular income mutual funds are one of the most popular mutual funds in the eyes of investors. Understanding a regular income mutual fund is an investment mutual fund that invests its assets in the form of debt or bonds with a minimum percentage of 80%. The specific direction of regular income mutual funds to generate a constant rate of return.
3. Combination Mutual Funds
As the name implies, the definition of a combination mutual fund is a mutual fund investment that distributes investor funds in the form of a combination of stocks and bonds in their investment portfolio. Having a high rate of return on capital brings a high risk for this investment.
4. Stock Mutual Funds
Invest a minimum of 80% in the form of shares, as an understanding of stock mutual funds. Among all the existing types of mutual funds, stock mutual funds have the highest risk profile. Intending to maintain the development of stock prices in the long term, this mutual fund investment has the highest rate of return.