Covid-19 Can Be a Lesson for Novice Investors, What are the Investment Options?

TRIBUNBATAM.id - When the Covid-19 pandemic began to hit the economy, many investors panicked and withdrew all of their funds from the stock market and the money market.

Usually, novice investors will feel the loss when the market rebounds because they do not study and see the weakening will occur temporarily or fundamentals that are no longer promising when participating in withdrawing funds.

Prudential Indonesia's Chief Investment Officer, Novi Imelda said, it could be a lesson for novice investors.

"Everything is taken as long as the lesson is not a mistake. Many investors are in a hurry to cash in, it turns out the market is up again. Take lessons from it," Imelda said in a video conference, Tuesday (06/16/2020). 

Imelda suggested, novice investors need to find diverse information if another crisis occurs again in the future. Also, recognize the objectives when you first invest so that investment becomes more consistent.

"Get to know your goals, get to know your assets, get to know fund managers too. Is your investment manager being responsible? What is his reputation? And what are the risks when investing in those assets? All need to be recognized," Imelda said.

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CEO of Eastspring Investments Indonesia, Alan T. Darmawan added, novice investors must do 3 things before re-entering the stock market and other investment instruments.

Three things, among others, see the risk profile, see the investment horizon, and see the experience of managing investments. Investment horizons are divided into 3, namely short term, medium term, or long term. While the risk profile, which is conservative, moderate, or aggressive. 

If it's conservative, you can enter money market instruments. But if moderate to aggressive, you can enter in stocks, fixed income, and balanced funds.

"How to see the risk profile is easy if there is turmoil, can you sleep soundly or not? If you can't sleep well even if it drops 1-5 percent, don't invest in stocks. Even though long-term stocks can go up, it's amazing turbulent, "Alan said on the same occasion. (*) 

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