Invest in gold or mutual funds? This question is often asked by novice investors. It is understood that both gold and mutual funds are two. low risk tool This is usually recommended for those who are new to the world of investing.
To determine which investment tool is right for you You should know in advance what investing in gold and mutual funds is. And the advantages and risks of each instrument are as follows:
general gold investment
Gold is one of the most famous minerals since prehistoric times. This precious metal is known for its beauty and versatility. In fact, gold was once a reference for world currencies. and is currently a tradable asset around the world.
Therefore, it is not surprising that the demand for this metal has hardly decreased. due to constant demand and limited supply (Gold is a non-renewable resource), the price of this metal tends to rise and is suitable as an investment tool.
Now, gold investments are not just in the form of gold bars or jewelry. But it can also be in the form of gold savings or by purchasing the securities of this metal mining company.
Today, gold savings are prevalent in Pegadaian and many banking companies in Indonesia. While the shares of mining companies To date, Antam remains the only gold mining company listed on the Indonesian stock exchange.
The advantage of investing in gold in bullion and savings lies in the difference between the price when the investor buys the gold and the price when he resells it. (profit from investment) for shares of mining companies The profit from this investment is obtained from the capital increase and dividends that the company distributes to investors.
Investing in General Mutual Funds
Mutual funds are investment instruments provided by global equity markets. In English, these instruments are known as mutual funds. With the development of technology as it is today Anyone can access this tool. including new investors with limited capital
It is said that mutual funds are the right tool for this type of investor. As this tool can be purchased with minimum capital (starting at Rp 10,000/unit) and investors do not need to worry about managing their invested funds. This is because funds are managed by a team of experts in investment management companies.
opposite of gold By purchasing 1 unit of this instrument, you are investing indirectly in the capital market and other financial instruments. several at the same time including investment in gold mining company Antam and many banks that provide gold saving products
The benefits of investing in this instrument can be obtained from: capital gain (the difference between the selling price and the purchase price), dividends (for equity funds), and coupons (for fixed income funds) distributed by the issuer.
Difference Between Gold Investments and Mutual Funds
1. Gold can be enjoyed physically.
The first difference between gold investing and mutual funds is that Gold can be enjoyed either as jewelry or gold bars. While mutual funds cannot Even the use of jewelry made of metal is said to increase one’s social status. This precious metal body can be easily inherited as long as you have purchase documents.
What about saving gold? Some savings providers allow customers to exchange their savings for gold bullion.
in doing this Usually the minimum value of your savings is equal to 1 gram of gold. So, if the initial metal price is IDR 927,000 per gram, then to convert your savings to physical form The investor’s savings balance must be at least IDR 927,000 at the time of trading.
2. Profit source
As mentioned in the paragraph above. The monetary profit from investing in gold comes only from the capital increase. While the source of profit from investing in mutual funds can also come from stock dividends and bond coupons. But regardless of the source Capital gains from these two tools are not taxed.
so if you Saving gold at the pawnshopProfits are only obtained from higher future gold prices.
Investing in gold and mutual funds involves several risks, namely:
- market risk. The difference is The risk of the gold market lies in the fluctuations in the price of this precious metal in the world market or the gold exchange rate against the USD (XAU/USDMarket risk for mutual funds lies in the changes in the prices of these instruments due to national and international economic movements.
- Risk of default or defaultThe authors say the risk of default in mutual funds is greater than gold. This is because card issuers’ business failures can directly affect the instruments they issue. For gold, it is safer from this risk. Because almost everyone in the world owns this precious metal. And many central banks around the world create this precious metal as reserves to stabilize currency exchange rates.
- The risk of human error. If you invest in gold in the form of jewelry or gold bars One of the risks you face is the risk of loss. Therefore, tangible gold must be kept well, whether in a safe or a safe.
On the other hand, the process of buying and selling and storing mutual fund information has been completed online. Your investments will not be held by the Investment Manager, but will be held by the Custodian Bank.
Both the investment manager and custodian must be a company with certain capabilities and be licensed by OJK to operate this business. In addition, mutual fund buying and selling applications generally include two-factor authentication ( 2FA) to secure investor information.
4. Price Calculation
in gold investment There are two prices you should pay attention to: the sell price and the buyback price. The selling price is the price set by the gold company when you buy gold. Whereas the buyback price is the price that gold companies set when they buy back gold from you.
For example, you use IDR 1,000,000 to buy gold saved when the selling price of this metal is IDR927,000 per gram. This means that you will get 1.07 grams of this precious metal. The next day you sell it. At that time the repurchase price is up to Rp. 900,000, which means that for 1.07 grams of gold you can get around IDR 971,000.
So if you want to profit from this investment You have to make sure that the total buyback price is greater than the gold sell price when you buy it.
On the other hand, the price of a mutual fund depends on the change in the price of the instruments that make up its portfolio. That is, if A’s share price goes up, there is a possibility that the instrument has A’s stock in the portfolio. Investment will also increase. unless there are other shares where the falling price is lower than A’s rising share price.
5. Liquidity Level
At present, the mutual fund can actually be sold. All you have to do is click on your phone and wait 2 days to 7 business days the process will be complete. mutual fund purchase app Provides a quick and easy process for users.
However, you can say that the gold smelting process can be faster due to:
- This precious metal can be sold to shops, banks or pawn shops.
- can pledge
- If such a company closes Real gold can be sold to a roadside goldsmith. (There is a discount, of course) or sell it to a relative who is willing and able to afford it.
Considerations when choosing to invest in gold or mutual funds
1. Economic conditions
understand that the price Gold tends to rise following recession. Economy. On the other hand, the prices of equity market instruments such as equity funds It tends to increase when the economy is good.
The logic is that when there is a recession Investors are looking for safe haven investment tools, so the demand for gold is rising and the demand for stocks is falling. If the economy improves Investors will look for more risky instruments, such as stocks.
2. Need a factor
Gold is not just an investment tool. Gold is, of course, a better tool for expressing one’s social status and wealth in front of others than mutual funds. This precious metal is also easier to use as a dowry or wedding gift than a mutual fund certificate.
3. Liquidity Factor
Money market funds are liquid, however, this tool can only be resold to the capital market. And it takes at least 2 business days to sell. On the other hand, (physical) gold can be sold to shops, pawnshops, banks, to roadside gold sellers. Therefore, it can be said that this instrument is more liquid than mutual funds.
That’s the conversation about investing in gold or mutual funds. So what instrument did you choose?