Articles & Tips

How to Invest in Mutual Fund for Beginners


Lately, the popularity of mutual fund rocketed among public community as an investment model which offers quite high potential return. That is why there are so many beginner investors interest to invest in mutual fund. If you are one of those beginner investors who is willing to drown yourself in mutual fund, there are actually basic steps of how to invest in mutual fund that you need to understand. It is important to manage risk which is often caused by your lack of knowledge, not because of the mutual fund itself. The following are steps you have to take in order to minimize risk that can happen to beginner mutual fund investors. 

Choose Mutual Fund that Fit to Your Investment Purposes

Each person certainly has different investment purposes to be compared to others. This fund needs actually determines the types of mutual fund investment that you have to choose. You have to contemplate about what the real reason that triggers you to do mutual fund investment. The easiest way is by categorizing your fund needs according to the time when you need that fund. You have to classify your needs, which one is in the short term category, mid term category, and long term category. After that, you can fit your need to the type of mutual fund according to the period of time. 

Know and Understand Your Investment

It is important to understand well where you invest your fund for potential return you may get from your investment. It will be difficult for you to project your future potential return if you do not know at all about the company where you invest your fund. Therefore, you need to understand the product of that company, their target market, their strength, as well as their weakness. Without those understanding, it is impossible for you to project the future cash flow of that company. Even though you invest in mutual fund through prominent and experienced asset management Indonesia company, you still need to understand those points above for the sake of your investment result. 

Check the Credibility of Company You Have Invested

It is not enough if you just understand the weakness, strength, and potential of company you have invested. Its credibility also takes part in assuring whether your investment will bring a good result or not. There are times when you misjudge company where you invest your fund. You may consider that company is potential enough, but in fact, it has bad reputation and bad portfolio. The simplest way to understand the credibility of a company is by checking whether that company is listed as healthy and developed company or not and have a proper license from the regulator. In some countries, there is government organization which has a list of trustworthy companies. You can use this list to cross check whether the company you have invested is on the list or not. 

Start Your Investment with Minimum Amount

Starting point in investment is actually a moment for you to learn, learn, and learn about how to invest. For those who just started investing, it is better for you to start it with minimum amount. It is important for you to get yourself accustomed to face the risk if your investment have not yet given a good return. In addition, if you have extra fund, instead of spending it in a certain type of investment, you can use it in investing in various types of investment all at once. It is a great way to learn about investment. The last but not least, investing with minimal amount will taught you to be patient to get the optimum return in the long run. 

To get return on your investment regularly, you have to learn about various investment strategies. You may be a beginner, but you do not have to worry. Make this situation as your trigger to understand mutual fund investment deeper. The more knowledge you have, the greater your investment ability will be. 




This report has been prepared by PT Schroder Investment Management Indonesia for information purpose only. It should not be considered as an offer to sell, or a solicitation of an offer to buy. All reasonable care has been taken to ensure that the information contained herein is not untrue or misleading, but no representation is made as to its accuracy or completeness, no reliance should be placed on it and no liability is accepted for any loss arising from reliance on it. From time to time, PT Schroder Investment Management Indonesia, its affiliated companies and any of its or their officers may have an interest in any transaction, securities or commodities referred to in this report. Also PT Schroder Investment Management Indonesia or its affiliated companies may perform services, for, or solicit business from, any company referred to in this report.