Unpredictable, most notably one that involves your finances, must be anticipated by preparing for yourself as soon as possible. Take an example of this pandemic situation starting from the beginning of 2020 which heavily affects the global economic state. In order for you to face the many possible financial challenges that may happen in the future, you can start by managing your finances as early as you can. By managing our finances now, we get to be more thorough in allocating funds, so those funds won’t only be used for short-term needs, but also for long-term ones. Not just with savings, another way that you can use to plan your finances is an investment, such as mutual funds investment. Let’s dive deeper into the world of mutual funds investment.
Investments Based on Time Horizon
Based on its time horizon, investments are classified into two categories, long-term investments and short-term investments. Long-term investments are managed in a longer period of time, ranging from years to decades. Although these investments generate higher returns, the investors will have to wait much longer to take home the profit, when compared to short-term investments. Unlike long-term investments, short-term investments are managed in a shorter period of time, from one to three years maximum. With short-term investments, we can get the profit much faster, but the returns are smaller. In this article, we will explain further about one specific example of short-term investments, the mutual funds investment.
What is a Mutual Fund?
Before we talk further about mutual funds, first we must know what a mutual fund is. A mutual fund is a type of investment done by accumulating your funds and managing them to several portfolio instruments or securities, such as stocks, obligations, and money markets or securities. In mutual funds investment, your invested funds will be managed by an investment manager or an experienced investment expert.
As the funds are managed by experienced investment managers, mutual funds investment becomes the perfect choice for beginners who don’t have enough knowledge and experience in investing. Furthermore, you are also not required to spend a lot of time to manage your invested funds as the investment manager is ready to do just that. Starting a mutual fund investment can also be done at an affordable cost. With a lower cost and minimum investment funds needed to be prepared, mutual funds investment is one solution worthy of your time and consideration, especially beneficial for your future financial planning.
Tips on Investing in Mutual Funds
If you are interested in starting a mutual fund investment, here are several tips that can help you:
Understand Your Risk Profile Before Starting Mutual Funds Investment
Apart from those six tips, you also need to know your profile risk before investing in mutual funds. Understanding your risk profile is one of the most important early stages to determine your preferred investment target. Risk profile, as well as investment goal, is separated to risk-averse, conservative, moderate aggressive, aggressive, and highly aggressive.
Risk-averse is a risk profile for customers whose investment goal is to gain protection and security of initial investment and generate profit from deposit interest that may not be bigger than the inflation rate. Customers with this risk profile are not willing to invest in products that possess risks to their investment principal.
Conservative is a risk profile for customers whose investment goal is to gain income and security of initial investment, so it won’t be reduced due to inflation. These customers are prepared to face medium-term investment risks.
Moderate is a risk profile for customers whose investment goal is to gain slightly higher income by calculating sufficient security level. These customers are ready to face moderate investment risks with medium to long-term investments.
Moderate aggressive is a profile risk for customers whose financial goal is to gain long-term income and growth in principal investment. These customers are ready to face high investment risks and fluctuate on long-term investments. The customers’ investment value may experience high fluctuation and be reduced greatly from its initial investment value.
Aggressive is a profile risk for customers whose financial goal is to gain significant growth in principal investment. They are willing to accept very high investment risks and fluctuate on long-term investments. The customers’ investment value may experience high fluctuation and be reduced greatly from its initial investment value.
Highly aggressive is a profile risk for customers whose financial goal is to gain an outstanding growth in principal investment. They are willing to accept extreme investment risks and fluctuate on long-term investments. The customers’ investment value may greatly decrease and there are possibilities for complete loss of total initial investment value.
With the numerous facilities and affordable minimum investment funds, mutual funds investment is the perfect choice for you to start investing and planning your finances. Therefore, you can be more prepared in facing any financial challenges that may come your way. If you are interested in starting a mutual fund investment, make sure that you’ve chosen a trustworthy mutual funds management company to oversee your investment. Just like PermataBank that has been trusted to manage various mutual fund investments. PermataBank also offers numerous mutual fund products, from equity funds, fixed income mutual funds, index funds, money market funds, to hybrid mutual funds. You can choose from these mutual funds products based on your risk profile, whether it’s risk-averse, conservative, moderate, moderate aggressive, or aggressive. Moreover, PermataBank provides comfort in monitoring your mutual funds digitally via PermataMobile X and PermataNet. Interested to start your mutual funds investment with PermataBank? You can learn more about the various mutual funds investment offers from PermataBank by clicking here.
As privacy is an important aspect for the visitors of PermataBank website, PermataBank is determined to protect the visitors’ privacy. You may browse most part of PermataBank’s website without submitting any personal information. However, you may be asked to disclose certain information for PermataBank to be able to provide the service you request for. The privacy statement in this website is prepared to help visitors understand the types of information provided in PermataBank’s website, and how PermataBank handles the information.
PermataBank is the sole owner of the entire information in this website. PermataBank will not sell, share, or rent the information in this website to other parties in the manner contradictary to the aspect presented in this statement.
PermataBank will make continuous efforts to maintain the security of your personal information and protect it from manipulation, forgery, and irresponsible access and disclosure. PermataBank will also endeavor to maintain information accuracy.
This website may accommodate links to other sites. Please be aware that PermataBank is not responsible for the privacy practices of other sites. PermataBank strongly recommends website visitors to read the privacy statement of all sites that collect personal information. The privacy statement in this website applies only to the information presented in this website.
PermataBank reserves the rights to change the statement in this website at anytime. PermataBank suggests the visitors of this website to recheck the privacy statement from time to time and learn a number of new privacy practices or modification of PermataBank policies.
The use and content of this website are provided for your convenience. The information presented in this website is provided for you, without any kind of guarantee, either written or implied, included but not limited to the guarantee on tradeworthy goods and/or services, the compatibility for any purpose, promotion for a product without violating any rule.
This website may contain technical guidance that is inaccurate and typographical errors. PermataBank reserves the right to correct and/or modify the information in this website at any time and by any methods, without prior notice.
PermataBank is not responsible or liable for any material and non-material loss, which may be suffered by anyone or any party, as directly or indirectly resulted from the use of the information contained in this website, either in part or in entirety.
For your convenience, PermataBank can also provide some links to other sites in the Internet, which are owned and/or operated by any party. Please note that those sites are not under PermataBank control, and therefore, PermataBank is not responsible for the content of such websites.