What is Money Investment
One of the things you can do to develop your assets is to invest money. Money investment is the activity of investing money as capital with the hope that it will grow and generate profits.
How to Invest Money Correctly
Every investment activity has its own risks. However, you can minimize this risk by applying the right strategies. Here are some strategies on how to invest money effectively.
Determine the Investment Period
First, you can apply the right way of investing money based on the achievement period. This will help you achieve the target according to the plan. Generally, the investment period is divided into three. Including the following.
Short term goal : < 3 years
Medium term goal: 3-5 years
Long term goal : > 5 years
Determine the Investment Instrument
Before choosing an investment instrument, consider your profile as an investor. Generally, there are three categories of risk profiles, including:
Conservative investors, namely investors who like stable investments.
Moderate investors are investors who can still accept stock fluctuations and are quite satisfied if their investments exceed the inflation rate.
Aggressive investors, namely investors who are ready to take the risk of losses with sharp fluctuations.
There are many ways of investing money that you can choose to start investing. For example in capital market instruments, such as stocks and mutual funds or investments in banks. Here is the full explanation.
One of the easiest ways to invest money for students is through mutual funds. Especially if you don’t have free time and skills in calculating the risks of investing, because there will be investment managers ready to help.
The opportunities provided by mutual funds are very wide open for potential investors. The reason is, there are various mutual funds that can be taken, such as the money market, and the stock investment market.
You only need a small amount of capital to start investing in mutual funds. No wonder mutual funds are one of the best ways to invest money for beginners with small capital.
Today, many young people are interested in learning about how to invest money through the stock market. Access to invest in stocks is even easier, it can even be run through an application on a cellphone.
The profit generated from this investment is obtained from the buying and selling activities of share ownership and dividends from the company. Minimum purchase and sale of shares is 1 lot or equal to 100 shares.
Invest in Bank
How to invest money in a bank that you can try is a time deposit. The risk of this investment tends to be very small, because it has been guaranteed by the Deposit Insurance Corporation.
Basically, the principle of bank deposits is the same as saving. You save money with some rules and it cannot be withdrawn at any time. Withdrawal of money can only be done within a predetermined period of time.
Open an Investment Account
Before starting to invest in the capital market, you must have an investment account. If you want to start investing online, you can make it through a securities company,
Generally, the documents that you have to prepare when you want to open an investment account are your ID card, Taxpayer Identification Number , account number, and filling out the initial investment form.
Diversification is a way of investing money by dividing your capital into several types of assets, such as stocks, mutual funds, gold, and deposits. This is so that you get the maximum profit.
In addition, diversification also helps you to reduce investment risk by preventing a total failure if one of the assets suffers a loss. Because, you still have other assets that are experiencing profits.
As a beginner, start investing with little capital. Choose the type of investment that is guaranteed and has a good history for the last five years. As a reference, you can attend seminars on tips on how to invest money for beginners on the internet.
Do it Consistently
When you start investing, you must have the right strategy in achieving the desired target. For example, the dollar cost averaging strategy, which is a way of investing money on a regular basis where every month you will monitor daily stock market movements.