Understand Mutual Funds Before Investment

We need to understand mutual funds before investment. Among the various investment choices, mutual funds actually offer easy analysis and funding. Therefore, many capital owners like this type of investment. Mutual funds are one of the most popular financial investment instruments. If you have prepared funds for investment, then you can start choosing various profitable investment instruments.

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Recognize Risk Preferences for Investors

You need to understand the topic of recognize risk preferences for investors. This is because it has a connection with yourself as an investor or potential investor. If you recognize risk preferences for investors, then you will recognize your character in dealing with risks to your portfolio.

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Detect Ponzi Scheme on Investment Fraud

We need to detect Ponzi scheme on investment fraud in order to avoid losing our investment capital. You as investors or potential investors need to detect Ponzi scheme because this investment fraud can be a form that varies from time to time. We really want to get high returns later, but we also really need to prevent mistakes that cause loss of capital.

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Get to know the Ponzi Scheme in Investment

When we discuss investment, we also need to get to know the ponzi scheme in investment. In the previous article (Research Before Starting Investment: Your First Investment), we also mentioned the Ponzi Scheme in Investment.

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Research Before Starting Investment: Your First Investment

We already know the word investment. Maybe many of us have studied the investment theory. But starting investing, it’s often difficult to get started. Therefore we need to discuss research before starting investment.

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Pay Attention to the Use of Loans to be More Useful

You often see many people applying for loans for various reasons of interest. Maybe you already have a debt to financial institutions. The ease of borrowing money from financial institutions makes many people make debt easily. Even only through internet media, you can apply for loans to financial institutions. This is where you have to realize the importance of paying attention to the use of loans to be more useful.

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Savings Before You Invest

We should start investing as early as possible. Investing early will make our plan for a better financial future. So early on, we must understand investment theory and collect a number of funds for investment purposes. Most of the easy workers feel difficulties with the availability of funds for this investment. To overcome this problem, savings before you invest.

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Basics of Investment Decisions in Portfolios

Prospective investors need to know the basics of investment decisions in shaping their portfolio. This knowledge has the intention that prospective investors understand the relevance of investment to the level of risk and Expected return. By understanding the basics of investment decisions in a portfolio, prospective investors will also understand their ability to bear the risk.

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Steps in Stock Investment to Make Decisions

Investors must determine the investment to be chosen according to their analysis. Likewise, stock investors must determine the shares of their choice. This is because there are very many types and numbers of shares. Therefore investors need to go through the steps in stock investment to make their investment decisions. The steps in stock investment are important so that investors get higher certainty, are not speculative, and are not wrong in making decisions.

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Get to Know Investment for Beginners

Knowing investment for beginners is very important to learn as early as possible. Students or young workers need to know the investment for beginners so that there is an idea to manage finances in the future. You must know that managing the future including finance must be prepared from the start.

People do not always know investment because of the influence of the lifestyle environment. Generally, workers and students who have an orientation to be employees do not have a preference for investment. This is because they get income from work activities. They generally pursue job openings that provide a large income. Therefore they need to know investment for beginners.

Definition of Investment.

We find many meanings for this investment term. As an illustration, we quote freely some of their meanings such as below.

Investment is the activity of utilizing cash at this time, with the aim of getting results in the future. Because the future benefits are not known with certainty, the investment proposal required involves risk. As a result, they must be evaluated with respect to expected returns and risks. (James C).

Investment is an activity related to the effort to withdraw various sources of funds used to procure goods capital at the present time. These capital goods are then expected to produce a stream of new products in the future, (Fitz G).

We can conclude from the definition that investment includes several things, among others, funds for capital in the present, various kinds of assets or portfolios, risks, and profit expectations. To get to know the investment for beginners, young workers need to know the things above.

Investment Destinations for Beginners.

Investment has a very broad goal. This is because every person, community or company can invest in their interests. Therefore everyone will have a different investment goal than others, for example, someone may have an investment goal, among others, to get a more decent life in the future, reduce inflation pressure, push to save taxes, etc.

Other people or other companies may have different investment objectives, for example, as explained below.

Earn Fixed Income.

You can invest in a company, for example, then you have the right to get company profits on a regular basis. You can run this on the company going public, and you get dividends. Or you invest in bonds that will receive interest periodically.

Enlarge Business.

You can invest in purchasing capital goods or land for example. This will increase your business capacity in the future.

Business Guarantee.

If you invest in suppliers, there will be a guarantee that your business will not lack raw materials. Thus you also get a market to sell products because of the guarantee of continuity of production.

According to Gitman, there are several reasons why someone makes an investment, among others, is the accumulation of pension funds, increasing current income dividends or interest income, saving for large expenses (home, education, vacation trips, and capital to start a business), protecting income from taxes.

Investment Forms.

To get to know investment for beginners need to know the forms of investment. In terms of its business scope, the investment can be divided into two, namely:

Investment in real assets (or real investment).

Someone makes this investment if it is visible or physically visible. for example for the establishment of factories, the establishment of hotels, restaurants, plantations, property, land, precious metals, and others.

Investment in financial assets (or financial investment).

You can invest in this type if you are oriented towards securities. , for example, investment in stocks and bonds.

Types of Investment

We are familiar with several types of investments that are common in the business world. And we need to introduce investment for beginners.

Deposit

Investments in the form of deposits of money, generally to financial institutions. Deposits generally have a time period determined by the guarantee that the investor will receive interest in the agreed period of time.

Stock

You can invest in closed companies or companies go public. Companies going public certainly have greater liquidity and security. This is because go public companies have a market for stock trading and are guaranteed by the government. We will discuss the stock later.

Bond

Companies or countries can issue bonds. This letter is debt. If you have bonds, then you have the right to get debt interest payments in accordance with the agreed conditions.

Mutual Funds

Mutual funds are a place to collect public funds collectively by investment managers. Investment managers use these funds to invest in stocks, debt securities, and others. You can buy mutual fund units in an investment management company.

Property Investment

Urban people like this type of investment. This is because people understand the scarcity of property and demand. This type of investment is in the form of buildings such as houses, buildings or apartments. This form of investment is profitable because the selling price of property often rises.

Investment in precious metals or gold

You can also invest in precious metals and gold. Gold tends to be more profitable because of rising prices and liquidity.