What is a growing investment ?

Mutual funds are an investment instrument that carries a risk of loss, as discussed in the previous chapter. Mutual funds do not have a fixed rate of return or interest. That's why it's not uncommon for mutual funds to be called interest in investing because mutual funds do not pay interest, but it is more appropriate to say that mutual funds are growing. Yes, it grows because the value used is based on the value of net assets, which is known as VNA. In addition to growing, of course, the VNA of mutual funds can also experience depreciation or decrease in value. The growth or decrease in VNA is the result of asset management carried out by investment managers (IM) who manage the funds we have. Therefore we need to remember once again that mutual funds have various types and the types that determine how fast or how slow we can gain or lose.

As we know, stocks have a fairly fast growth rate of return and have a fairly large risk as well. Interesting right? So, of course, mutual funds called stock mutual funds have attractive return opportunities and also have big risks.

The thing to remember is that the law, "High Risk, High Return" will always apply. As far as I know, no one can deny this law.

In the chapter we have discussed a questionnaire that is usually given to us to fill in which after we fill out the questionnaire we will get and find out which mutual fund product is more suitable and that will certainly make us calmer in buying a mutual fund product.

Many people are tempted to enter into a stock mutual fund investment instrument just because they are tempted by the benefits. Yes, of course, if I may tell you, in 2005 and 2006 there was one stock mutual fund product that was able to achieve a return of 100% per year. Yes, it is 100%. That USD 10,000,000 turned into USD 20,000,000 Without us doing anything, interesting isn't it? However, if I tell you about my other experience, in 2008 I also bought a stock mutual fund a few days before the stock market crash in 2008. Until 2012 the stock mutual fund I bought actually made me lose 8%. Yes, right! By buying the product for USD 10,000,000, when I cashed it out I only received USD 9,200,000. So that in buying stock mutual funds, even though they have large profit potential, we also cannot avoid potential losses.

After we know the criteria for mutual fund products that match our personality, it can make us feel comfortable in investing in mutual funds. However, the most important thing that we must realize is that by buying mutual funds, we no longer get the certainty of interest like when we deposit our money in a bank. And the size of our profits in mutual funds in my opinion will depend on several factors:

Investment Manager

Investment managers in mutual funds are no different from coaches or soccer coaches, why coachmen? And why also a football coach? The coachman controls the horse to make it run according to his expectations, and the mutual fund also needs to be controlled to make the product profitable, and that is the job of the investment manager. The soccer coach sets the strategy of the team being coached, in the context of an investment manager's mutual fund who manages the allocation of managed funds where the managed funds are, yes, our funds. So choosing a good investment manager and having a good track record is very important. In the next chapter, we will discuss the analysis of investment managers and mutual fund products, of course.

Mutual Fund Products

For each mutual fund product, for example, A stock mutual fund and B stock mutual fund. Even though they are both equity funds issued by the same company, they usually have different concentration of fund management. For example, stock mutual funds A concentrates more on stocks located in LQ45, while stock mutual funds B concentrates more on stocks that are on the J1130 index (LQ45 and JI130 are indexes or featured stocks that are grouped due to a specific nature. of the shares). Of course, stock mutual fund products A and B will have different returns and one of them may be better than the other. By buying mutual funds, of course, we don't need to be too confused by an overly complicated analysis of which product dominates the market. But knowing in general it can provide a more optimal return value on our investment, of course it will be more interesting, right?

Purchase Time

Even when buying mutual funds, it turns out that we have to buy at the right time. In 2008 there was a market crash that frustrated all market participants. It's different with me and my friends. At that time, I was more enthusiastic about buying mutual funds and stocks. We need to know that when all the bad news began to circulate, the bell that signaled the time to buy investment products began to ring loudly. So no more than a year since the market crash, my investment portfolio has turned positive and is heading towards an attractive 50-150% figure right?

How to Purchase

Although we know that there are only 2 transactions in mutual funds, namely buying and reselling, there are several ways or purchasing methods that can allow us to get optimal returns and minimize the risk of losses due to unfavorable economic conditions when we invest in mutual funds. Because we already know that there are several things that we need to pay attention to in buying mutual fund products, then in the next chapter we will discuss things related to the 4 criteria above.