Investing for Beginners What is the Risk Difference Between Stocks, Forex, Bitcoin, Gold and Mutual Funds

    Hello everyone. Introducing Luna. Welcome to the Talking about Money channel. As the name suggests, we created this channel specifically to talk about all things money related.For those interested in the world of finance, economics and investing. Subscribe to this channel to get the best content from us.Now, in this article, I would like to talk about the Indonesian investment community in general. For those just starting out in the investment world, this article is a great guide for making investment decisions. For those of you who have just stepped into the world of investing. you may wonder. where should i invest? Remember that there are many investment vehicles.

Investing for Beginners What is the Risk Difference Between Stocks, Forex, Bitcoin, Gold and Mutual Funds

    Deposits, bonds, mutual funds, stocks, gold, forex, peer-to-peer lending, bitcoin and more. Each investment vehicle has its advantages and disadvantages. There are very safe investment products. The risks are very low, but the returns and profits are not that great. And your primary investment capital has been locked for a long time. On the other hand, there are investment products that can generate large profits in a relatively short period of time even if the risk is high.

    This is a classic law in the investment world, commonly known as high risk high return, low risk low return. This means that the greater the investment risk, the greater the potential reward. As well as potential benefits. Therefore, before deciding which investment vehicle to choose, you should first understand the attributes of the investment. I will explain this in two dimensions.

    The first dimension is the classification of investments by risk and reward levels. Here, we draw on the vertical axis. The top one is high risk high return. The bottom represents low risk and low reward. The second dimension is the investment classification based on the investment period. what to draw on the horizontal axis The left is a short-term investment. Right is long term.

    Thus, we have an investment mapping consisting of four areas. Area 1 is a high-risk, high-return investment vehicle with a short investment period. The second is a long-term, high-risk, high-return investment vehicle. Then there is area 3, low risk, low return, short term investment vehicles. Finally, there is area 4 of investment products with low risk, low return and long investment horizons.

    Now let's dive into the details of mapping this investment space. Start with Area 1. Area 1 is a short-term investment vehicle with high profit potential but also high loss potential. Examples of investments in this area are typically commercial. You can also look for limited edition items for stock trading, forex trading, bitcoin trading, or short-term sales. Traditionally, investment vehicles in this area require special attention and specific analytical skills. Suitable individuals to play in Area 1 are those who have the courage to take risks and bear the potential for large investment risks.

    Ample time for attention and analysis of each investment product. Proceed to Area 2, a long-term investment vehicle with high profit potential but also high loss potential. Examples of investment vehicles in this area include investing in blue chip stocks, investing in mutual funds, especially mixed funds and equity funds. Real estate investment, foreign currency investment, long-term cryptocurrency investment, low-rated corporate bonds. , or it could be a survey of antiques and rarities that may continue to rise in value.

    Those who choose to invest in this area 2. These tend to be those who have long-term confidence in the product or asset being invested in and the courage not to take the small amount of potential risk associated with it. I have. Proceed to area 3, short-term investment vehicles with low profit and loss potential. Examples include money market funds for individual investors, fixed rate government bonds and ORIs. Other options include peer-to-peer lending with insurance guarantees. Investing in Area 3 tends to suit those who want to invest safely but have limited capital and need flexibility in disbursing funds.

    The final area, Area 4, is for long-term investment vehicles with relatively low profit potential, but can be said to be very safe and have a small or very small loss potential. Examples of investments in this area include deposits, gold, SBR bonds, etc. This area of ​​investment is perfect for those looking to preserve the value of their assets to offset inflation in the long run. Area 4 investment vehicles are typically popular with individuals who have limited time to maintain their investment assets.

    It extends to older people who are retired and no longer productive but still want to keep the value of their wealth. It is not uncommon for investment products in this area to be used as future savings deposits. For example, from saving for children's education to retirement savings. Now you know how to map your investments. We hope that the above discussion will guide you in deciding which investment vehicle is best for you. In fact, most investors often combine investment tools in multiple areas simultaneously.

    Some even invest their wealth in the four worlds. Of course, the distribution of assets will be proportional, depending on each investor's risk profile. So now you may be wondering. If you combine investments in four areas, what percentage of your assets should be allocated to each area? In fact, it depends on your risk profile. Everyone has their own risk profile.

    In that sense, each person has different needs and lifestyles. For example, some young entrepreneurs are unmarried and have no relatives. Of course, you have to take a different investment approach than the head of a family of three. So, take a look at his risk profile and get some tips on how to prepare for his four investment areas above. Ask yourself some of these questions before deciding on an investment vehicle. First, what is your investment goal and what is your investment objective? Is your goal to accelerate your wealth growth in the short term or do you want to grow your wealth slowly over the long term? Second, are you willing to lock up your fixed assets for the long term, or do you want an investment vehicle that is flexible enough to allow you to withdraw money whenever you need it? Third, do you have free time to monitor and monitor fixed asset growth?

    The problem is that some investment vehicles, especially high-risk ones, require special oversight to mitigate risk. Fourth, how much budget do you allocate to investments? Calculate your investment budget first to avoid confusing it with cash flow, monthly expenses, bill payment obligations, and daily necessities. , when pondering these four questions, I hope you can be more careful when choosing investment vehicles and allocating funds according to your investment objectives and risk profile. OK, that's all I have to say. We hope that this article will be helpful for those who are unsure about where to invest.

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