Keeping funds in a conventional savings account is often not enough to maintain the value of your wealth. Money may lose its value over time due to a dynamic economy and rising inflation. In situations like this, investing through Mutual Fund instruments can be a way to protect your wealth or implement wealth protection.
This instrument offers a balance between returns and risk. Beyond that, the portfolio is managed directly by a professional Investment Manager, so investors do not need to manage their funds themselves.
With professional investment management, Mutual Funds can be a strategy to protect wealth while supporting long-term financial growth. Learn more about the concept of wealth protection below.
What Is Wealth Protection?
Before going further, understanding the definition of wealth protection can be the first step to becoming familiar with this concept.
What is wealth protection? The concept refers to financial strategies aimed at protecting and maintaining the value of a person’s wealth.
Instead of increasing wealth, this strategy focuses on ensuring that assets remain protected from risks or economic conditions that may cause their value to decline. Factors that could reduce asset value include inflation, market fluctuations, and financial crises.
Wealth protection is often perceived as relevant only for those with large assets. In reality, however, this strategy is important for everyone to maintain financial stability in changing economic conditions.
Even so, wealth protection is not a strategy that delivers instant results. It aims to maintain asset stability over the long term.
Forms of Wealth Protection
After understanding the concept in general, here are several forms of wealth protection. As part of wealth management, wealth protection includes protecting asset value, managing financial risks, and carrying out long-term planning.
Based on this, the following are several forms of wealth protection:
Insurance
Purchasing insurance is one instrument you can consider to protect your assets. Types include life insurance, health insurance, property insurance, or coverage for specific assets.
By having these insurance products, you can transfer unexpected financial risks arising from accidents, illness, or asset loss. This is important because it helps shield your finances from potentially significant costs.
Investing According to Risk Profile
To protect and maintain asset value, you can start investing by choosing instruments that match your risk profile.
Rather than leaving funds idle in a savings account, allocate them to stable investment instruments. You can choose low-risk instruments that offer better returns compared to conventional savings.
Portfolio Diversification
Portfolio diversification can also be a strategy to protect wealth. Spreading assets across different instruments helps minimize the risk of loss if one asset experiences a decline in value.
Diversification helps maintain overall asset stability and ensure that values remain more consistent.
Why Mutual Funds Are Suitable for Wealth Protection
As mentioned earlier, investing in the right instrument can be a way to protect wealth.
If your goal is to maintain asset stability, Mutual Funds can be one of the best options. Several reasons why Mutual Funds support wealth protection include:
Managed by Investment Managers
One of the main advantages that makes Mutual Funds suitable for wealth protection is management by professional Investment Managers.
With experienced Investment Managers, market analysis is carried out thoroughly, ensuring each investment decision is based on careful consideration.
Diversification
Investing through Mutual Funds allows investors to apply diversification strategies. This helps reduce potential losses in order to maintain wealth stability.
Through diversification, if one asset decreases in value, it does not automatically cause other instruments to experience losses. In fact, other assets may remain stable or even generate gains.
High Return Potential
Compared to keeping funds in low-interest savings accounts, Mutual Funds generally offer higher potential returns.
By investing, your assets become more productive. Beyond that, your wealth becomes better protected against inflation.
Risk Profile Alignment
Another reason Mutual Funds are effective for protecting wealth is the availability of options based on risk profiles.
Since every investor has a different risk tolerance, Mutual Funds offer a variety of products tailored to these profiles from Equity Mutual Funds to Fixed Income Mutual Funds.
This flexibility allows investors to maintain asset balance, making Mutual Funds an effective tool for protecting (or even growing) wealth.
Need a Trusted Investment Partner? DBS Treasures Priority Banking Is the Solution!
The discussion above explains how Mutual Fund investments can be a tool to protect your wealth. However, aside from choosing the right instrument, selecting a trusted investment partner is also key to ensuring smooth investment activities.
One recommended option is DBS Treasures Priority Banking, a reliable and trusted investment partner. With DBS Treasures, your investments are managed by experienced Investment Managers who optimize product performance.
Another advantage is the availability of diversification strategies. As mentioned earlier, diversification minimizes risks by spreading assets across multiple instruments.
You can also gain insights from the financial expert team regarding market analysis, which is highly valuable for supporting your investment decisions.
DBS Treasures Priority Banking also provides the DBS digibank Application, offering convenience for conducting buy-sell transactions, switching, and SID (Single Investor Identification) registration.
You will also be supported by a team of financial experts who communicate curated market analysis and the latest opportunities tailored to your risk profile and portfolio needs, powered by Artificial Intelligence/Machine Learning (AI-ML). These insights are complemented by curated investment (Grow) and insurance (Protect) solutions, so you can invest quickly and confidently through your preferred channel.
If you want to protect the value of your wealth through Mutual Fund investment, partnering with DBS Treasures priority banking is the solution.
This publication has been curated by the internal team of PT Bank DBS Indonesia (DBSI) and distributed by DBSI.
DBSI is licensed and supervised by the Indonesian Financial Services Authority (OJK). This publication does not constitute, and should not be regarded as, an offer, recommendation, and solicitation for you to purchase or conduct any transaction as described herein. It is also not intended to invite or permit any public offering for the purchase of, or participation in, any transaction in exchange for cash or any other form of benefit, and it should not be interpreted as such.
