CAREER + MONEY

INVESTING 101: 'SAFE' OPTIONS FOR BEGINNERS

The rise of fraudulent investments in Indonesia has raised doubts in investors' minds and scared off investors-to-be. So how should one new to investing start their investment journey?

30.07.2022
BY WILHEMINA BOWEN
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Doni Salmanan and Indra Kenz have dominated the local news in the past month, particularly after they were named suspects in the Quotex and Binomo fraudulent investment cases.

Long before these binary option platform affiliates were arrested, the Financial Services Authority or OJK has alerted the public about the rise of fraudulent investment schemes through its Investment Alert Task Force.

From 2019 to 2022, the Investment Alert Task Force has blocked 908 illegal investment platforms. A total of 442 of them were barred in 2019, 347 in 2020, 98 in 2021, and 21 in 2022.

Tongam L. Tobing, the Investment Alert Task Force Chairman, has also alerted the public concerning the new methods employed by illegal investment schemes to attract patrons. These include but are not limited to binary options, trading robots, and profiteering from official entities through social media.

"These illegal investments can tarnish investors' confidence to invest in the capital market. We need to eradicate these crimes together," said Tongam.

The rising number of fraudulent investment cases has raised doubts in many individuals who are about to begin their investment journey, particularly Indonesian youths.

This news came at an awkward time, as previously in 2020, Indonesian Central Securities Depository recorded that 49.40 percent of 3,53 million Indonesians who invested in the capital market were below 30 years old, indicating younger generations were beginning to gain confidence in investing.

Safer options

So, one might ask: How do one begin their investment journey without exposing themselves to risks that they might not be prepared to deal with? Well, there are several types of "safer" investments for beginners. Here are just three of them:

Photo by Towfiqu barbhuiya on Unsplash

 

Deposits
Investing in deposits is one of the conventional ways with an excellent security rate for investors and those just about to begin their investing journey. As a short-term investment, the tenure for time deposits usually ranges from one to 24 months with a two to five percent interest rate, depending on the Bank Indonesia's reference rate. All bank deposits are guaranteed up to Rp 2 billion.

Those who are averse to interests for religious reasons might also consider other available options, such as shari'a-compliant deposits.

Photo by Austin Distel on Unsplash

 

Mutual Funds
A mutual fund is a sort of investment product that consists of a collection of funds that are managed as investment capital and may be converted into other forms of financial and investment goods, such as stocks, bonds, and other financial and investment products. 

An investment manager, management, or professional entity in charge of managing your investment activities will then operate the cash gathered. 

Photo by Markus Winkler on Unsplash

 

Bonds
Bonds are government or corporate debt statements. On the other hand, individual companies can also issue this financial instrument. Generally, there is a declaration in the bonds issued that each purchase contains interest that will rise over time and bring advantages to the owner. 

Bond maturities typically range from one to ten years. Ownership certificates in coupons or interest will be distributed to bond investors.

#Investment #Tips

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