What Is Investment?

    1. Understanding
    Literally, is the storage of money investing with the aim of obtaining the expectedreturn greater than the deposit rate to meet the objectives to be achieved with a predetermined time period and in accordance with the capability to capital. Or can be interpreted also as a sacrifice in the form of delays in now to make a profit(return) a better future.
    In other words the more simple / simple, investing is a way for someone to manage their money to buy property either, save or put into a venture with the aim to benefit after a period / periods are predetermined.
    1. Forms of investment
    In everyday life there are some forms of investment that we know, among which are:
      1. Investment property
    Investment property may be planting some money in the form of property, the most common practice is prevalent in the form of gold, houses or land.
      1. Equity investment
    This equity investment is generally associated with the purchase and storing of shares of stock in a stock market by individuals and funds in anticipation of income from dividends and capital gains as the stock value increases. It is also sometimes associated with the acquisition of shares (ownership) to participate in a private company (not listed in the stock) or a new company (a company being created or newly created). When investments are made in the new company, it is called as a venture capital investment and is generally understood to have a greater risk than investment in situations where the shares are listed on the stock performed.
    1. Investment Risks
    Usually, there are three risks that most feared men as they will to invest, namely:
      1. The decrease of Investment Value
    Risks most feared men when investing in general is "Is my money will be lost?"Most people might answer "no" when asked like that. Because no one would lose money. However, every investment there must be some risk. They differ only in size. There are a risky investment product is big enough, there are, there are small.
    Now if you invest, we should consider how much you are willing impairment liability if you suffer losses? 10 percent? 20 percent? 50 percent? Or 100 percent? No matter how big you are willing to bear losses, remember that it waspart of investing. Do not ever expect you will continue to profit. What is called the loss, we occasionally had to be natural. Due to the existence of losses, it is an experience which make us so much more to learn in an investment.
      1. Difficult it was for sale and Investment Products
    The second risk is the most feared men when investing is whether the investment product he bought it easier for the sale / non-refundable. Some people may be happy to invest in gold because gold is considered easy to resell. However, there are also people who invest in the currency into U.S. dollars, and dollars are quick inclusion to the bank. This is because when the dollar was kept in the closet, then the physical condition of paper money may be decreased, and it will sometimes be difficult when times were about to be sold back dollars.Understandably, some banks often do not want to receive or buy your foreign currency money when conditions are physically torn, damaged or crumpled.
    Another example of an investment product that is not always easy to resell are collectible items. Collectible items are generally not easily resold because buyers market of these goods is very specific. Painting for instance. Since the specific market, namely those of the hobby will be painting as well, not always easy to sell the paintings. But, once sold, could have a very high price and provide a decent profit to those who sell them.
    So, before you decide to invest, you should first know how easy the product can be sold back your investment. Do not let you invest but can not sell it, because things are difficult sale.
      1. Investment Results Provided No amount of Goods and Services Price Increase
    Imagine if you invest in time deposits that provide 10 percent interest a year, whereas in the year the price of goods and services actually increased by 15 percent? This often happens, not because of too high price increases for goods and services, but due to selected product itself is not necessarily appropriate .
    Maybe some of you want a product that is safe and conservative investments. However, the consequence is that the investment results obtained might not be able to match the rising prices of goods and services. If it continues you experienced from year to year, then you will go bankrupt.
    What should you do to face this risk? Do not close yourself to the information.Learn other investment products that you may not know, and then try to go in there to weigh all the consequences. Over time, you can surely overcome the high prices of goods and services by investing in products that it has the potential to provide higher yields than the increase in prices of goods.
    1. How to Reduce Investment Risk
    To reduce the risk, the easiest way is to invest in various investment vehicles.This method is called by making a portfolio investment. The purpose of this method is to reduce the investment losses that might arise from an investment vehicle with a closed using the profits obtained from other investment vehicle. For example investing in mutual funds and on savings. If they do not benefit the investor will suffer losses. But how about if one of them at a disadvantage, for example the value of mutual funds down or liquidated banks? Given this portfolio one of the expected loss of investment could be reduced by gains from other investments. If both lose, meaning the trial if the investor uses an Islamic investment and perhaps a warning or punishment even if Islamic investments are not appropriate.
    So the core reduces the risk of portfolio investment is: "do not lay many eggs in one basket" because if you fall, then the egg will be more broken than if placed in some other basket when the basket did not fall.
    1. Investment Products
    In general, investment products based on the results grouped into two groups, namely:
    • Products Fixed Income Investments (fixed-income investment), which is an investment product that is certain to give the income (usually called interest), and the money you invested will not diminish in value. Example: Deposit and Savings Bank.
    • Products Investment Growth (growth of investment income), are investment products that do not provide the results would be of interest, but only returns when resold at a higher value. Examples: stocks, gold, houses, goods collection, foreign currency. Risk product like this is money you can invest less nilanya if the investment products sold at a price lower than the price when you buy it.
    1. Investment Decision Process
    Investment Decision Process is a continuous decision (on going process) with the following stages:
    Determination · invest Destination
    In determining the purpose of investing there are some things you should note that investment period (short / long), how the target return that would be achieved.
    · Determination of Investment Policy
    Investors should understand the risk characteristics (risk profile) whether an individual is willing to take risks or avoid risk, how much funding will be invested, investors flexibility in time to monitor investments, knowledge of capital markets.
    · Portfolio strategy and asset selection
    Once you know the things on point 1 and 2 above, so we can build a portfolio that is expected to efficiently and optimally.
    Measuring and evaluating portfolio performance
    Measuring portfolio performance has been established, whether already in accordance with the objectives. Tools to measure the performance of existing portfolio of three fairly popular Sharpe's measures, Treynor's measures and Jensen measures.
    1. Commodities
    Commodities related to stock companies that produce raw materials such as oil, gold, silver and base metals, like aluminum, copper and zinc.

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