As one of the instruments suitable for novice investors Mutual funds are investment tools that come in many different types and are managed by various investment managers. Therefore, it is not surprising that investors, especially beginners, are confused in choosing this tool.
To help you, here’s how to choose the right investbro.id mutual fund model:
1. Define a risk profile.
The first step you need to do is define. risk profileThis is important because each type of mutual fund carries different risks. making it suitable for different investment objectives
for example, Equity Fund (RDS) It is high-risk because there is market risk that it will replace every stock in the portfolio. Additionally, the disbursement process tends to take longer than the RDPU disbursement process, so this tool is often suitable for mid- to medium-term needs. long term such as pension funds, children’s schools, homes, etc.
Usually, applying for a mutual fund buy and sell agent will give you a small amount. assessment to help investors determine their risk profiles You can use the results assessment This is the right product selection for you.
2. Set investment goals
This investment objective is important to help determine the amount of return on investment you need to meet your investment goals over time. When knowing the benefits of this desired investment You will be able to determine the right investment tools to achieve your investment goals.
In determining the relationship between your investment objective and the desired amount of profit (return) there are several things you need to know, such as the target price for the investment objective. Possibility to increase the benchmark interest rate and initial investment value
To calculate this relationship, you can use compound interest calculatorsome formulas in Microsoft Excel, etc.
3. Determine the best investment manager
The next way to choose the right mutual fund is to choose the best investment manager. An investment manager is a company that is responsible for managing your investments in the future. Therefore, its role is very important in determining the quality of your investment.
To choose a company to manage this tool There are several factors you should consider:
- Legality of the Company. Make sure the company is registered with OJK because there is now a lot of fraud under the guise of investing.
- Track logs and profiles.
- all Net Asset Value (NAV) manageThe higher the NAV, the more trust the public has in the investment manager involved. net worth assets (NAV) or Assets under management (Aum). A list of companies with NAV can be found in the article. “The largest mutual fund manager in Indonesia”.
to provide the highest and diversified return on investment You can select products published by multiple companies at once, so don’t just choose one.
4. Choose the best mutual fund product
After knowing your risk profile, objectives and determining the best investment manager Now it’s your turn to choose the best mutual fund products managed by investment managers. in choosing this product There are several things you need to pay attention to:
- investment allocationMutual fund allocation plays an important role in determining future product trends and potential risks. You can find this allotment on each individual product page. (if in the application) or by reading Fund Information Sheet Mutual Fund Products
- profit potential. Every investor wants to make a profit. The benefit of this mutual fund is usually expressed as a compound annual growth rate (CAGR) or one-year price growth of the instrument. But there is also a high risk.
- Withdrawal valueIn addition to the CAGR, the risk of investing in this instrument is reflected in the value of drawdown Products The drawdown value is the difference between the mutual fund’s highest price and the fund’s lowest price. the bigger the difference Volatility and risk are higher.
- investment cost. The size of the cost of this tool is shown in the variable expense ratio. This variable shows the efficiency of the investment manager. Investment managers who need help expense ratio Large corporations require large expenditures. Because they tend to take their investment policies seriously.
- transfer fee. The advantage of buying mutual funds is profit. This investment is tax-free.And investment subscriptions do not charge any sales or purchase fees. All you need to pay attention to are bank custody fees and transfer fees. The custodian bank fee is usually IDR 3,500 per transaction.
A transfer fee will be charged if the custodian bank for the product is different from the bank you use on a daily basis. This means that there will be additional charges if you use a different bank to withdraw your investment.
to maximize profit from investment It is better for you not to choose a mutual fund product for your sole investment purpose. Choose from multiple products to diversify your risk. Many investment applications nowadays also come with expert advisor (EA) that can automatically select mutual fund products for you. However, the success or failure of choosing this product remains up to you as an investor.
5. Create your notes in Excel.
The final step in choosing the right mutual fund for you is to record a list of your target mutual funds in Microsoft Excel in this spreadsheet software. You can save the name of each product. which is an investment manager and custodian bank that manages as well as all the variables you need to pay attention to in point 4 above.
Why excel? because in this software You can sort data from lowest to highest value or vice versa. You can also use this software to evaluate the performance of your future investments.
In addition to excel, many investment applications today include the above data filtering feature. the difference is You cannot independently evaluate your investment as if you saved it back to excel.
Careful selection of investment tools will indirectly reduce your investment risk. On the other hand, choosing investment tools randomly increases your risk of loss. Because you don’t know what and who is behind this tool. So don’t choose mutual funds recklessly.