In the world of finance, investors are individuals or institutions both domestic, or non domestic who make an investment, and these investments can be in the long term or short term.
As an investor and prospective investor, recognizing risk is the most important thing that must be known before investing.
Why is that...?, because this risk will determine the most suitable investment product to choose, based on the expected level of yield with how much tolerance the level of risk that can be borne.
Commensurate with the principle of investment, the level of risk that is dared to be taken will certainly be directly proportional to the expected potential return, or the term generally "high risk, high return".
And the term will be meaningful if the higher the risk that can be borne, the greater the expected profit. Furthermore, risks must also be considered when choosing investment products such as mutual funds.
Mutual funds are a forum for raising funds from investors. Funds collected will later be managed by investment managers into several investment instruments such as deposits, stocks, or bonds.
Then, mutual funds are also interpreted as an investment alternative for investors, especially small investors and investors who do not have much time or expertise to calculate the risk of their investments.
For mutual funds, it consists of various types of assets in its portfolio. Said assets have different characteristics from the side of the benefits and risks.
Therefore, the type of mutual fund is very dependent on the contents of its assets. Furthermore, investor risk must also be adjusted to the type of mutual fund for convenience in investing.
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Generally, the risks that describe the character of investors in investing are divided into 3 types, namely Aggressive, Conservative, and Moderate. Then the three of them are as follows :
Investors who have an aggressive risk, are very ready to be rich and are also ready to fall into poverty. Someone with an aggressive risk is ready to lose a large portion, or even the entire investment fund for a large income. This aggressive risk owner is ready to invest in all financial instruments such as stock mutual funds and also includes trading in stocks, forex, indexes and commodities. The aggressive type referred to, also usually has the courage to go directly to the world of property and business.
Conservative investors have a low risk, and tend to avoid risk. In investing, these investors prefer safe investment instruments, and are afraid that the principal investment will decrease. Then, this type also feels comfortable with investment instruments that are moving steadily even though the earnings result is not too large.
But to maximize investment returns, it is better for conservative investors to invest in long-term goals. Because, the time needed to achieve the investment value will not be available in the short term.
The investment instruments that are suitable for investors such as savings, deposits and money market mutual funds. Other instruments such as mutual funds, fixed income or government bonds can also be alternative options for risky investors like that. This is because, these two assets have the potential to generate higher income in the medium to long term with a relatively low risk.
Moderate risk investors, possess characteristics that are ready to accept short term fluctuations, with potential profits expected to be higher than deposit rates and inflation. In this case, mutual fund investment knowledge can move up or down already understood by investors.
While the type of mutual fund suitable for this type of moderate investor is mixed mutual funds whose risks are still relatively lower, compared to stock instruments or stock mutual funds. however, mixed mutual funds also have no less profit potential than similar mutual funds.
Such is the type of investor based on the risk in investing is informed. In addition to risk, the period must also be adjusted to the goals or needs to be invested. And it must be remembered, risk or period of time, especially investment mutual funds is the key to success in investing. May goddess fortuna always side with you... good luck investing...
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