If observed at a glance, all investments offering yield or return, such as mutual funds, stocks, bonds, and other deposits. However, you need to know that any type of any investment it must have a risk respectively. To be vigilant in choosing, know five of this capital investment.
Mutual funds are a collection of investors’ investment funds managed by the investment manager. The collection of funds form a portfolio of securities with the intention to benefit according to criteria of the product prospectus invested. Risks involved in this type of investment is a decline in the net asset value of units due to decreased compared to the market price of the original purchase price. The reason could occur due to the performance of the stock market and issuers deteriorates, political and economic situation of uncertainty and other underlying causes. In addition, there is a liquidity risk that adversely affects the closure or bankruptcy of several public listed companies into a portfolio of mutual funds and investment managers as managers of mutual funds.
A bond is a certificate containing the contract between the investor and the company stating that the bondholders have lent money to the company. These types of investments can be risky capital loss, which you sell the bond before maturity at a price lower than the purchase price. Another risk is callability when the issuer or public company has the right to buy back the bonds which have been issued prior to maturity. The bonds will be withdrawn when interest rates are generally declining. So, bondholders have callability requirements will lose money if interest rates showed a declining trend. Typically, the issuer will provide a premium as compensation.
Peer to Peer Lending
Peer to peer lending is the market place to find people who want to owe (borrower) and the money lenders (lenders). The lender will be given yields are not inferior to other investment instruments. Talk about risk, failure to pay is a major risk. Is not when lending money to friends and relatives of the default risk also exists? Therefore, use of money “more” to join a peer to peer lending. This is to anticipate the risk of making daily necessities are not disturbed.
Stock is a certificate that shows proof of ownership of a company as well as shareholders have the right to claim on the income and assets of the company. You may find risks in this type of stock investments, such as losing the dividends if the issuer is not posted a profit in the current year or the AGM no dividend to shareholders because profits will be used for business expansion. You can also experience a capital loss if the share purchase price is greater than the selling price. In addition, if the issuer goes bankrupt, the shareholders have the right to claim against the company’s assets after all liabilities are paid issuers.
The worst thing is if there was no remaining assets, then shareholders are not getting any.
Deposits are in the form of services investment savings deposits and withdrawals can only be done at certain times. Deposits are guaranteed by the government through the Deposit Insurance Agency (LPS) with certain requirements. Although the deposits are considered more secure, this investment also has some risks or disadvantages, such as the interest generated so small that can not banish inflation, money on deposit can not be cashed if something happens to the banks concerned, but you will get a guarantee and interest of LPS when exposed liquidity. Another risk is no chance for the owners of deposits to be directly involved in investment management.