In this uncertain era, investment is a reliable financial solution. Many are still hesitant to invest their funds because of the risks involved, including investment in types of Bonds. The fact is every investment instrument certainly has risks.
However, these risks can be minimized, and the most important thing is to understand the type of investment you are investing in. For novice investors, taking a selective stance is the right way to avoid risk. In order to know more about investment instruments, especially the types of Bonds available, see the information in the following article.
Bonds Are Potentially Profitable Investment
With the rising income in Indonesia, more and more people are interested to invest in Bonds. People want to dig deeper into Bonds to find the right type for them. For a novice investor, there may be doubts because they still don't understand the investment world.
In any investment, including Bonds, there are two things that must be understood by every investor, namely the level of risk and return. You need to know that there is no risk-free investment. However, when adjusted to investors’ needs, these risks can be minimized and even prevented.
Related to these risks, investors' attitudes are divided into several types, namely those who dare to take risks (risk takers), hesitant (risk moderate), and do not want to take risks (risk averse). Because every investment always has a risk, as a new investor, it’s important to know the risk profile of each investment before you choose.
The problem for investors is that they often fail to pay attention to the rate of return, so they miss the level of possible risk. This leads to fraud through fake investment. People are too focused on making big profits, so they forget to be vigilant.
Understand the Right Way to Invest in Bonds
Investing in any type of Bond is indeed a way to double your funds. However, you need to understand the ins and outs of the investment so that you can gain maximum profit. Check out the right way to invest in Bonds.
- Choose the Right Bond Type
Investing is like planting a tree. Don't delay investing, because in the future when you enter retirement age, you can reap the results and enjoy it. Set your intention and choose the right type of Bond according to your investment goals.
Expand information about the types of Bonds and other things around them that can broaden your horizons. The more knowledge you gain, the more you know, the more you understand how to avoid unexpected risks throughout the investment period.
You can check the company's portfolio and the performance of the Bonds owned by the Bond issuer. With this information, you can decide which type of Bond to choose.
If you are interested to invest in Bonds, choose long-term Bonds. The reason is that this will cover you when you enter retirement age. The various types of investments give you the opportunity to choose which one suits your top priorities. Determine the priority from various considerations to choose the Bond you really need.
- Don't Ignore Inflation
Never ignore the inflation rate when you’re in the investment world, especially if you decide to take long-term investments. Because one day, the value of your investment can decline and lead to losses.
Every investor's biggest fear is losing money. Therefore, keep up with the information regarding current inflation to take preventive steps and minimize the risk of investment failure.
- Instil the Right Mindset
Instil an investor mindset when you start investing. Always emphasize not being afraid to take risks and be optimistic about the choices you make regarding Bonds. Mindset is an important thing that greatly influences one's success. As with skills, experience, hard work, and networking, a good mindset must be applied in Bond investment.
Some people think that the mindset is a quick fix to get rich. Well, differences in one's mindset can lead to different results. Therefore, you need to have the right mindset when you start investing.
- Divide Your Capital
Make sure you divide the capital you have into several assets. A common example is dividing capital into other assets, such as gold, property, stocks, and others. This step is to prevent losses if one of the investment instruments goes on a decline.
Dividing assets into a diversification system can prevent major failures. That way, the burden of your loss is not too big and your financial condition is not really affected.
- Start With a Small Investment First
To grow self-confidence, especially for new investors, invest little by little. Choose investments that have performed well over the last 5-10 years. Find references and tips on how to maximize your Bond profits.
If you have any doubts and feel you don't understand the Bonds you’re interested in, consult an experienced financial adviser. Especially if the party allows investors to consult on various matters regarding Bonds and initial capital.
- Don't Overdo It
Avoid getting too excited at the initial momentum of Bond investment. Instead of getting too excited at the start, it's better to maintain stability in making investments. This is mostly experienced by new investors where they deposit a large amount of capital at the start. Deposit capital according to your ability and remain calm in dealing with current conditions and changes. This is a process of getting used to it as a new investor.
Overdoing it will affect the mentality and psychology of investors. For novice investors, avoid investing excessive capital. Stay on track with your investment goals and don't be lured by recommendations with lucrative results from other parties.
- Don't Monitor Too Often
There is a saying that investing makes you uneasy. To avoid this, make sure you choose a trusted and guaranteed type of Bond. You will not experience this because the issuer will provide you with information about the Bonds you invest in, including the coupons for the Bonds.
Avoid continuously monitoring the ups and downs of the Bonds. This will cause anxiety and make you afraid to make a decision. In fact, the main goal in investing is to build long-term wealth. So, daily investment performance will not automatically impact your profits in the future.
Therefore, monitor your Bond investment as necessary, preferably once a month. Loosen the tension in following the progress of your investment.
The Right Mindset for New Investors to be Successful in Investment
For those interested to invest in Bonds, there are several important things to consider when choosing the type of Bond. Consider the fluctuating market conditions, keep in mind that Bond prices are unstable and can change at any time. Besides that, there is a certain mindset that needs to be instilled in order for you to successfully invest in Bonds.
- Bonds Are Not a Way to Get Rich Quick
The first is to understand the mindset that investing in Bonds is not an instant way to increase wealth. However, by deciding to invest early and consistently over the long term, even better when you can analyse properly, you will gain the maximum profit potential.
Also, remember that any investment carries its own risks. So you should make Bond investments as passive income where you will gain regular profits. Passive income will add to your regular income from work, such as office work, business, and others.
- Think Like a Business Owner
Next, keep in mind if you decide to become an investor: "think like an investor". When you decide to jump into the world of Bond investment, consider the business prospects and the fundamental performance of the company you invest in.
Do a thorough analysis first, both on technical and fundamental matters. That’s how you can avoid worry if at any time the value of the Bonds fluctuates. You will understand that in terms of business prospects, this will always happen and is normal.
- With Good Fundamentals, Bond Price Correction is an Opportunity
What you must understand is that the journey of an investment will not always stay consistent. It will move up and down continuously. There are times when changes or corrections occur after the rising trend of Bond prices. So, this correction momentum is a good opportunity to buy declining Bonds.
- Limit Risk by Diversifying into Different Assets
When investing in Bonds, you need to manage your risk. For example, if you are saving eggs, don't just put them in one basket. Put the eggs you have in several different baskets. This is done to prevent all the eggs from breaking when the basket falls.
In the business world, this analogy is called an investment diversification system. You can apply this in taking Bond investments where you diversify your investments into different assets.
DBS Treasures as Bond Investment Partner
DBS Treasures has advantages that differentiate Bond investment from other companies and financial institutions. Following are some of the advantages of DBS Treasures priority banking so you can invest in Bonds confidently.
- Regular Coupons
Bonds at DBS Treasures provide regular income in the form of coupons which are paid regularly during the investment period by the Bond issuer.
- Potential Capital Gains
Several types of Bonds can be sold at any time before maturity and gain potential profits from rising Bond prices.
- Competitive Coupons
Provides a competitive coupon rate above the average Fixed Deposit interest
- No Additional Fees
Only the spread or the difference between the selling price and the buying price (bid and offer).
- 24/7 Transaction
There are a variety of Bond products that can be traded on the digibank by DBS Application. All transactions can be done 24 hours, anytime and anywhere.
Investing in Bonds with DBS Treasures will be easier, more practical, and guaranteed to be safe. You can find complete information here. Don't forget to choose Bonds as the recommended instrument to support your investment stability.
