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Tuesday, January 25, 2011

Time to Turn Your Money into Stocks

Investing for the community should be a lifestyle trend. Never again think only limited to 'save' and place the funds on deposit are supposedly the safest investment instruments. Begin to switch into the stock. Why?

Simple indicator is the increase in the Composite Index (JCI), which reached 46.13%, to 3703.512 levels throughout 2010, and is predicted to continue in this year.

According to research result of PT Bahana TCW Investment Management, a strategy of investing in 2011 is to minimize the allocation of liquidity, whether cash or deposits. The problem of excess liquidity to keep interest rates low, so that placement can not cover inflation.

Let us look at interest rate movements on the type of investment deposit. Since 2005, the government cut fuel subsidies and the allocation of a global crisis that terrible incident in 2008, causing deposit rates continue to decline. Until the acquisition of interest on the bonds can not fight inflation, especially of food commodities and education.

Indeed, during the 1998 crisis, the government became a full guarantee that public funds kept on deposit. So forget the notion that deposit as a profitable and safe investment.

Trimming the fuel subsidy is causing inflation and cause interest rates to rise. But it is a positive impact, especially foreign investor confidence, actually rose.

Furthermore, not only foreigners who buy government bonds, but also the domestic banking system. Proceeds from sales of government bonds has raised additional funds of banking, even beyond the purposes for which credit has actually increased.

As a result, excess funds are collected in Bank Indonesia Certificates (SBI), and ultimately be borne by the central bank.

Bank Indonesia (BI) makes the instrument interest rate to control inflation through the absorption of liquidity. If the rupiah liquidity is absorbed, there can be strengthening the lower the risk of inflation. During the height of SBI bank money, banks are relatively not so require public funds as reflected in the relatively low deposit rates.

Alternative solution is to stock investing. Shares of commodity sector is still one of the main drivers of investment in the stock market. However, expectations of rising stocks will not last year.

Investments in debt securities or types of corporate bonds are also eligible ogled. Investors can choose a corporate bond with a good credit rating, rather than government bonds. Mapping the state bond yield for tenor of 10 years, at the end of 2010 was 7.6% level. This figure was lower than the average 10-year inflation of 8.3%.

Other investment alternatives can be done in non-listed companies through private equity funds. Especially when the price of stocks and bonds are considered expensive, while low-interest bonds awake.

The advantage of investing in private equity funds is the dividend. In addition, there is potential for greater profits at the company's business released to the capital market as a public company.


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