financialtreat – will you explain about What Are Stock Mutual Funds? Come on, see the explanation you will get in the following article. let’s look at this article carefully!
Mutual funds are places to collect money or investment funds from the people that will eventually be invested by investment managers in various investment instruments. Investment managers manage and invest funds professionally within mutual funds. Investment managers are supported by other experts consisting of investment committees and investment managers. Therefore, let’s look at the explanation of this article about mutual fund investment plans for 5 years.
In addition, the Investment Committee is in charge of directing and supervising the investment management team in carrying out investment tactics. The Investment Committee will hold a meeting with the team once a month to conduct an assessment. Investment Manager is a team in charge of managing mutual fund investments in accordance with the established investment policies and tactics. With the mutual fund investment plan for 5 years, a briefing will be carried out.
What Are Stock Mutual Funds? Come on, see the explanation
Mutual Fund Risk
- Risk of Fluctuations in Investment Value cause by an increase or decrease in the performance of Mutual Funds. The decrease can be cause by changes in the price of investment instruments, fees that are charge every time an investor makes a purchase or sale.
- Liquidity Risk. Resale to liquidity from the portfolio or the ability of the Investment Manager to repurchase using cash. Liquidity risk can arise if it is at the same time. The investor resold the Mutual Fund and the Investment Manager faile to provide the necessary funds.
- Risk of Mutual Fund Asset or Wealth Coverage. The bank insures all mutual fund assets from unwante things. It’s like a natural disaster, a riot. All of that can affect the value of the investment.
- Risk of Default. This risk can occur if the Investment Manager’s business partner fails to meet the obligations. It is not limite to, issuers, realtors, Custodian Banks or Mutual Fund Impact Selling Agents only.
- Risks of Changing Economic and Political Situations at Home and Abroad.The open economic platform applie by Indonesia is vulnerable to changes in the international economy. Changes in the economy and decisions, especially in the field of money markets and capital markets, are factors that can change the performance of banks. This includes companies liste on the Indonesian and foreign impact exchanges.
Stock Mutual Funds
In the world of investment, equity mutual funds are one type of investment that is quite much in demand by the people because of the recognize promising returns. Although investment is known as the principle of high risk high return, the risk of equity mutual funds is fairly high but with a higher potential for good lead.
The risk of equity mutual funds is higher when compare to other types of mutual funds such as mixe mutual funds, fixe income mutual funds and money market mutual funds. But for those of you who are use to the risks of stock mutual funds, of course, it has its own way to avoid losses.
Stock mutual funds turne out to be very different from playing stocks in general. Investors of equity mutual funds do not have to jump in directly to observe stock price fluctuations. All of that will be run by the investment manager, but before you decide to enter into stock mutual fund investment, you should understand the basics and principles of stock mutual funds.
What Are Stock Mutual Funds?
The definition of stock mutual funds is not much different from stocks, both of them have portfolios in the form of stocks. This portfolio is then manage by the investment manager by selling and buying stocks when the stock price is too possible for transactions. The result obtaine from investing in equity mutual funds is the difference in the increase or decrease in the buying and selling price of shares
What distinguishes stock mutual funds from other stocks is that stock mutual funds can only be done on the shares of companies that have legal entities liste on the Indonesian or foreign influence exchanges.
Therefore, not all companies can be bought shares with stock mutual funds. The main purpose is to protect financiers, the company registration mechanism is also not easy because all are directly supervise by the Financial Services Authority or OJK. There are many stock mutual fund products that are trade conducively, of course, under the supervision of the Ojk. This supervision regulates the conduite of equity mutual fund investment actors including:
Investors are not allowe to buy shares on foreign influence exchanges whose information cannot be accesse from Indonesia. Investment is only limite to a maximum of 10 percent of the value of mutual fund assets, investors are not allowe to control the company’s capital more than 5 percent of all total capital.
Get to know the Return and Risk of Stock Mutual Funds
Return and risk or commonly calle profit and loss are elements that are mutually relate in stock mutual funds. Understanding returns and risks is very important to get maximum results in investing in equity mutual funds. As an investor you can’t just look at one side, you have to take it into account everything and mature between profit and loss.
It is undeniable that equity mutual funds do offer high returns but behind that there is high risk also considering fluctuations that cannot be predicte easily. Both the profit figures of equity mutual funds and their losses can rise and fall at any time sharply. But that does not mean that these risks are a barrier in investing in equity mutual funds. With good financial planning, these risks can be minimize or moreover reverse into multiple profits.
Tips for Stock Mutual Funds to Be Profitable
Always remember that no investment is profitable forever or losing constantly. So that you can get maximum results in carrying out stock mutual fund investments, here are some tips that you can check out.
Determining the Right Financial Planning Goals
If so far the purpose of investing in equity mutual funds is to track large profits in a short time then you must abandon this principle. The most important thing in carrying out investments is long-term financial goals.
Always remember that equity mutual funds are not right for those of you who have an investment profit target of under 15 years, this is because of the high fluctuations in market prices that are always changing. Investment in equity mutual funds is only recommende for those of you who have a long-term financial plan of more than 15 years. If it is done within that time frame then there is a possibility that you will get a very high return.
Review the Proper Performance of Stock Mutual Funds
The best way to understand the performance of stock mutual funds is to conduct a performance review. Not infrequently investors see reports publishe by the mass media with tempting results. But if an assessment is carrie out base on the performance of equity mutual funds in the short term of approximately 1 year, it is useless. This is because equity mutual funds can only show real returns after the long term.
In order not to be foole by this, you need data that shows consistency of performance over a long period of time. However, due to the restriction of news access, usually investment managers will only add reviews for the last 5 years at the latest. This is much better compare to short term reviews for 1 year.
One of the banks that is suitable for you to start investing in stock mutual funds is CIMB Niaga. For more news relate to CIMB Niaga Mutual Funds, you can browse it here.
Getting to Know the Types of Mutual Funds
Stock Mutual Funds
Equity Mutual Funds have the highest potential returns among other types of mutual funds. In the last 10 years, on an industry average basis, equity mutual funds deliver an 18 percent return in a year. Fund managers place investors’ funds on several stocks.
Given that the stock price fluctuates so that it is high risk, the duration of investing in equity mutual funds should be done for more than five years. The preparation of another 20 years of pension funds, the tuition of children of the next 15 years, can be place on stock mutual funds.
On the other hand, for the purpose of paying a down payment on residence for the next 6 months, do not place it in stock mutual funds. When there was a financial crisis in 1998 and 2008, stock mutual funds took roughly two years to return.
Read more wealth management:
Mixe Mutual Funds
As the name implies, it is a mutual fund that contains a portfolio of combinations of stocks and bonds. The portion varies from one product to another. This mutual fund can be use to meet medium-term financial needs. The risk is below that of stock mutual funds, as are yields. Mixe mutual funds can be use to meet medium-term needs, more than 3 years.
Bond Mutual Funds
Contains debt securities of both corporations and the state. The risk is lower than stock mutual funds and mixed mutual funds. For financial needs and planning under 3 years, bond mutual funds are the most suitable instrument.
Those are some important reviews that discuss mutual fund investment plans for 5 years, hopefully with the discussion above, hopefully it will be useful and thank you.