Investments Strategy for Earning and Minimizing the Risk of Loss

Queenews.com- Young rich, retired prosperous, died go to heaven” can be said to be almost everyone’s dream and hope. However, to realize these ideal aspirations, one is not only required to work hard in order to have adequate resources. Careful financial management and the right investment strategy are also needed

The Importance of Preparing for Retirement

Investing is one way to meet financial goals. Therefore, determine in advance: what is your investment goal? In addition, investment choices are important for us to be able to fight inflation or long-term price increases. That way, current income can be optimized to help prepare for meeting future needs.

Long-term inflation can undermine our financial capabilities in the future if there is no anticipation in advance. Saving alone is not enough when the returns provided are only below the inflation trend. You need to consider starting investing in investment products, so that the risk of inflation which causes a decrease in the value of money in the long term can be fought.

The problem is, although many people may already be aware of the importance of investing, not a few are hesitant to start choosing investment products for fear of losing money. It should be noted, the choice of investment is different from saving. If someone saves or places funds in a savings/savings product at a bank, he is entitled to a guarantee from the Deposit Insurance Agency (LPS) as long as he meets the guarantee requirements.

Conversely, in investment products, there is no guarantee. There is a risk of loss of impairment in the value of investment product assets up to the risk of loss of investment capital. However, the risk is outweighed by the opportunity for a profitable investment.

However, you need to remember, the risk will actually be greater if someone continues to delay starting investment choices. Needs in the future could be at risk of not being met if there is no anticipation of preparation of funds in advance.

So, the recommended path is to start investing as soon as possible with the right strategy so that a prosperous future can be better prepared.

Investment Strategy for Earnings

Investment does have a risk of loss that is proportional to the chance of profit. Profitable investment is not impossible, if you can minimize the risk of loss with the right strategy. Investing can be done so that you can earn with some of the main tricks as follows.

First, know your risk profile. Everyone has a different appetite for investment risk (risk appetite). In general, the risk profile of investors is divided into three categories, namely conservative investors who prioritize stable yields, even though they are low, and are uncomfortable with sharp market fluctuations, and are reluctant to bear losses, let alone lose their investment capital.
Then, there are moderate investors who can tolerate market volatility and are willing to take the risk of loss at a certain level and want to earn higher profits. Lastly is an aggressive investor who wants to get maximum profit and is willing to take the risk of big losses, he doesn’t mind sharp volatility. You can find out your risk profile as an investor through a questionnaire that must be filled out as a requirement before making an investment.
Second, adjust the investment time horizon and financial goals. If the intended use of the funds is still long, for example, more than 10 years, it means that your investment time horizon is long term. That way, you can weigh investing in instruments that have the potential to provide maximum profit in the long term. Likewise, if the target is to use the funds in the short term or in the near future, the investment strategy is to choose investment options in instruments that are more liquid and have low risk.
Third, choose an investment product according to your financial goals. For example, if it is intended to prepare for retirement needs that are still a long way off, 20 years from now, for example, the recommended strategy is to invest in instruments that have historically grown high in the long term. For example, stocks or stock mutual funds.

Implementing an investment strategy is important so that you can achieve a prosperous life. In order for this effort to run smoothly, it’s a good idea to first ensure that your personal finances have enough cushion, through adequate emergency funds, and meeting insurance protection needs.

Investing for future spending should be done using cold money (disposable income) where when a loss occurs, your personal finances are not disturbed. So, make sure you have met basic protection needs such as life insurance and health insurance, as well as an emergency fund to help you when a sudden need arises and when income is stagnant. Prepare at least three times the amount of monthly routine expenses as an emergency fund.

Minimize Risk By Having Protection
Recognizing that every investment has risks, good risk management is very important in an investment strategy. In addition to investment risk, we also need to consider the risk factor of life.

For example, if a critical illness arises that costs a lot of money or eliminates income, then the investment we have will be disrupted, even threatened to stop.

Therefore, insurance protection is absolutely necessary, to help you manage all financial and life risks.

By implementing the right investment strategy, you can be one step closer to creating a prosperous and profitable life.

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