The Right Types of Investments for Entrepreneurs

It's not only office workers who need to invest, but entrepreneurs must also do so. Mutual Funds are among the suitable investment options for all segments.

Investment is not only useful for personal financial goals but can also be utilized to manage business finances. Through investment, you can prepare emergency funds for the company without fear of experiencing inflation.

Types of Investments Suitable for Entrepreneurs

The decrease in the value of money due to inflation can be covered by the investment profits, thus keeping the value of the company's assets intact. If you plan to invest, consider the following types of investments.

Mutual Funds

This first type of investment is quite popular among the public because it offers many advantages. You don't need to hesitate to use this instrument because the funds accumulated by investors are managed and monitored directly by professional Investment Managers.

Investment Managers will strive to provide the best performance possible to generate maximum profits. So you don't need to make a strenuous effort to conduct in-depth market analysis to generate maximum profits.

This investment consists of several types that can be adjusted based on risk profiles and required timeframes. Here are some types of Mutual Funds that you need to understand:

Money Market

Most of the assets accumulated from investors will be managed by Investment Managers through money market instruments.

These funds will be allocated to investment products such as Fixed Deposits, SBI (Sertifikat Bank Indonesia), SBPU (Surat Berharga Pasar Uang), and similar investment instruments.

The advantage of this investment type lies in its relatively low level of risk, making it very safe for short-term and long-term investments.

Because the risk is very small, the profit potential is not as high as other investments but relatively higher compared to average Fixed Deposit interest rates.

Fixed Income

Its risk level is indeed higher than Money Market Mutual Funds, but its name is more popular among investors.

Just as its name suggests, this investment offers fixed returns, making it more attractive. Most of the assets accumulated from investors (at least 80 percent) will be managed by Investment Managers through Bond instruments or debt securities.

Hence, it can provide relatively stable profits or returns compared to other investment types.

Balanced

Conservative investors are not recommended to choose this investment because its risk level is higher than the previous types of investments.

Risk levels are directly proportional to the profit potential offered, so Balanced Mutual Funds offer significant profit potential. This type of investment is more recommended for moderate to aggressive investors.

Equity

The last type uses the majority of its assets (at least 80 percent) to be managed through stock instruments.

Its risk level is the highest among the others, so it is only recommended for aggressive investors. The profits from Equity Mutual Funds can be maximized if you choose long-term investments.

It's no wonder then that this investment is often chosen to accumulate retirement funds and other long-term financial goals.

Bonds

The next suitable investment type for entrepreneurs is Bonds, which are securities containing acknowledgment/debt statements issued by governments or companies.

The issuer is the debt holder who has an obligation to repay the principal loan and pay interest. Investors (bondholders) can trade them before the maturity date ends. Here are some types of Bonds based on their issuers:

Corporate

These debt securities are issued by companies (private or state-owned) and are divided into several coupon types (interest yields). These debt securities can offer variable coupons, fixed coupons, and sharia profit sharing.

Government

Debt securities issued by the government also offer several coupon types. One of the most popular types of Government Bonds among the public is ORI (Obligasi Ritel Indonesia).

Foreign Currency

If you want to diversify, investing in foreign currencies can be the right choice for entrepreneurs. Its operation involves the foreign exchange trading system of various countries in the world.

This investment requires an understanding of factors related to the economy and market analysis to determine the right steps. Without these things, you will have difficulty determining the right time to buy and sell foreign currencies.

Therefore, investing in foreign currencies should not be done arbitrarily. If you are inexperienced in analyzing the market, it's better to choose widely popular foreign currencies, such as:

- United States Dollar (USD)

- Euro (EUR)

- British Pound (GBP)

- Japanese Yen (JPY)

- Singapore Dollar (SGD)

- Hong Kong Dollar (HKD)

- Australian Dollar (AUD)

- Swiss Franc (CHF)

Investment Mistakes to Avoid

Making mistakes in investing is normal, especially for investors who are just starting out. To avoid these mistakes, you should avoid the following:

Being Too Aggressive

Aggressive investors generally want large profits in the shortest time possible. That means the risks they face will be very high. However, not all aggressive investors are ready to accept these risks with an open mind.

If you're not ready to face these risks, it's better to lower your ego and start investing slowly. Don't rush to make big profits if you're not ready to face high investment risks.

Easily Influenced by Emotions

In deciding investment steps, you must be good at controlling emotions. If not, the chances of making the wrong decisions will increase. For example, when the market is declining, many investors panic and immediately sell all their investments at a low price.

Not Conducting Research

Many entrepreneurs do not conduct in-depth research before investing because they are too busy managing their businesses. No matter how busy you are, make sure you research the investment instruments you will use first, to avoid mistakes or losses in the future.

Not Making Thorough Planning

Before making investments, you should make plans first. Why is planning so important in investing? Because thorough planning will help facilitate determining the right investment strategy to generate maximum profits.

Investing Without Diversification

One way to reduce the level of investment risk is by diversifying into several instruments. Investing without diversification will increase your chances of experiencing losses.

Investment not only brings positive impacts to personal finances but also helps plan business finances. Through DBS Treasures priority banking, you can invest in several instruments easily and safely.

This partner offers various facilities for you in investing. There are leading Investment Managers who continuously manage your investment choices, ensuring maximum product performance. In addition, a diversification strategy of fund allocation to various types of investment assets is implemented to minimize risk.

You will be supported by curated market analysis from a team of financial experts who will communicate it. Seize the latest opportunities that have been tailored to your risk profile and portfolio needs, driven by Artificial Intelligence/Machine Learning (AI-ML). This insight is equipped with curated solutions related to investment (Grow) and insurance (Protect), so you can quickly and confidently invest through your preferred media.

You can also conduct investment activities easily and conveniently, as the process of buying, selling, switching, and registering for SID (Single Investor Identification) can be done directly through the digibank by DBS Application.

Achieve your financial goals now by investing in Mutual Funds with DBS Treasures! For more information, click here.