It is important for investors to know. risk profile that he has. This risk profile will later help the investor determine the right investment tool for him. However, considering that the investment The high and low risks that investors have to bear appropriate to the benefits that will be receivedhigh risk, high return).
The term often used to describe an investor’s level of risk is risk-averse. What is risk-averse and which investment tools are suitable for investors with this risk profile? Check out the following comments:
Understanding the risk averse
In the language, risk-averse means to avoid risk. in terms of investment A risk-averse is an investor who tries to reduce risk. Either by choosing a low-risk investment tool. or reluctance to spend large sums of money at once to buy instruments
In fact, the word risk-averse is also used in everyday life. A simple example is when you ride a motorcycle. Those with a risk-averse attitude tend to ride motorcycles at standard speeds (about 40 km-60 km per hour). Be sure to wear a helmet, bring your driver’s license and your license plate. The streets were really empty and there were no police on duty.
in the context of investment Risk-averse investors tend to avoid instruments with high drawdown values. There is a very minimum purchase level. Avoid careless buying of investment tools. and prioritize the safety of funds over profits.
Risk-tolerant investors consider a number of things before they start investing. Other terms that are widely used to describe investors with this level of risk include conservative investors. risk avoider and risk avoiders
The difference between a risk-averse and a risk-taker
The opposite of a risk-averse is a risk taker. A risk taker is someone who takes risks. in fact It is not uncommon for such investors to invest directly without careful consideration. but basically Risk-taking investors understand that in order to get a huge return on their investment, He had to sacrifice a huge risk as well.
in the context of everyday life A risk taker is someone who likes the thrill of riding a motorcycle at high enough speeds and without enough safety gear.
in the context of investment This type of investor often chooses investment instruments with high profit potential, such as stocks or high-risk stocks, such as trading forex or cryptocurrencies. Another term that is widely used to describe this type of investor is an aggressive risk investor.
Pros and Cons of Being a Risk-Averse
The main advantage of being a risk-avoiding investor is that you feel safe, comfortable and calm because you don’t have to face excessive losses. And don’t be afraid that your capital will be lost. Moreover, FOMO is not easy to get trapped. and greedy for fear of buying too high a tool and disciplined with plans.
The downside is that the potential profit is low. And it’s not uncommon for these types of investors to delay their initial investment. This can happen because they want to finalize their investment plans first. and overcome the fear of loss due to buying the wrong instrument
Risk-averse investment options
If you are an investor with this type of risk You don’t have to worry about starting investments. There are many low-risk investment tools available today. Among them:
1. Deposit investment
investment deposit It is an ideal tool for risk-averse investors because:
- This tool is managed by the bank. Investors do not have to have the hassle of choosing an issuer or debtor to fund this amount. The bank will select the issuer or debtor according to the criteria set by the bank. Investors just sit and make profits.
- Earn profits in the form of interest rates. A debtor who receives a loan from a bank will repay the loan and interest. Some of the interest goes to the bank’s treasury as service income. And part of it will go into the pockets of investors as interest income. The percentage of a depositor’s interest income is generally higher than the interest income a typical savings owner earns.
- It is guaranteed by the Deposit Guarantee Corporation (LPS) as the bank is an important institution for the country’s economy. Bank deposits are therefore guaranteed by the Deposit Insurance Corporation (LPS). You can apply to the institution.
2. Money Market Fund
Recommendations for investment tools suitable for risk-averse investors include: Money Market Fund (RDPU) RDPU is suitable for this type of investor because:
- Most investment allocations are money market instruments such as deposits or government bonds.
- Benefit. In general, the return on investment of money market mutual funds is greater than that of deposits. These gains come from deposit interest rates. Preferred bond coupons and stock dividends, as a minority of the RDPU will be allocated to invest in preferred shares.
- Investors do not need to worry about investment allocation as RDPU and other mutual fund products It is managed by an investment manager. It is a company with expertise and advanced investment tools to maximize your return on investment.
- Many RDPU products can be purchased for only Rs 10,000.
The only drawback of this tool compared to deposits is that money market funds are not guaranteed by LPS.
Besides the jewelry Gold is also an investment tool that many people look for. Especially if the economy of the country and the world is in trouble. The reason is that this precious metal is widely used for a variety of needs, such as for jewelry and various industries. Although the number of production is limited.
Gold is suitable for conservative investors because:
- Easy to grip, touch and see
- Gold prices tend to rise especially for medium and long term investments.
- buy now digital gold Starting at IDR 10,000 only
- Gold can be traded in a variety of ways, from pawnshops, banks, to the gold shop itself.
4. Fixed Income Fund
Fixed Income Fund It is a type of mutual fund where most allocations are used to invest in bonds or debt instruments.
Like money market mutual funds This tool is suitable for conservative investors. Because there is no need to manage funds independently. And investors will benefit from coupons. interest rate and dividends according to the allocation
5. Government bonds
The last instrument suitable for risk-averse investors is Government bonds or debt instruments issued by the federal government In addition to having the opportunity to earn higher profits compared to the previous instruments in general Investments in federal bonds will still be refunded when they are due.
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