Millennials are often referred to as the generation who cannot manage their finances properly. This trouble is caused by millennials’ tendency to prioritize their modern lifestyle that leads to breaking their bank account. Never mind savings, sometimes they already run out of money before the payday arrives.
It’s not surprising, considering that many economists predict the millennials will find it difficult to survive in the future with their current financial conditions. But, don’t be discouraged! Millennials can, actually, improve their finances by investing in mutual funds.
Busy? Your Investment Will Be Handled by Professionals
So many millennials hold back on investing because they are scared that they won’t be able to handle it properly. Moreover, they have a myriad of activities, ranging from studying, working, hobbies, and honing skills. On the other hand, mutual funds require great consideration in order to know which one is more profitable.
Fortunately, mutual funds are managed by experts known as Investment Managers. The investment manager acts in making decisions such as when to sell or buy investments and to hold investments, in order to minimize risks and get maximum returns. Because of their important role, you need to choose an investment manager who already has an official certificate and license from the Financial Services Authority (OJK) so that your investment portfolio will be “green.”
Start Small, The Returns Will Be Satisfactory
Another reason why millennials prefer not to invest is because they think they don't have the money to do it. When truth be told, mutual funds can start from a small sum of money. In fact, millennials can start investing with a starting fund under IDR 1 million! Quite affordable, right?
Even though you invest with a small capital, mutual funds actually offer satisfying returns, you know! If your goal is to gain as many returns as possible, then you can choose mutual funds as your preferred investment instrument. Most of the time, the returns from mutual funds are higher than gold investment and term deposit.
You Can Diversify Your Investments
One of the differences between mutual funds and other investments is the ability to diversify your investments. With investment diversification, the risk of losing money in one investment is lower. The funds given will be invested in several types of instruments, ranging from bonds, money markets, and stocks at the same time. This is the reason why mutual funds are deemed as a safer and suitable option for beginners, like millennials.
Many Types to Choose for Different Types of Investors
Mutual funds provide many types of investments, ranging from low risk ones with small returns to high risk ones with high returns. Mutual fund products with the lowest risk are money market funds, for example, such as Bank Indonesia certificate deposits and bonds with maturities of less than a year.
An example of mutual funds that have high returns but are also risky is mixed mutual funds. Here, investors place their investments in several places at once, such as stocks and bonds. For mutual funds with the greatest risk and biggest returns, you can choose equity funds. Now, all it remains is for you to choose your own mutual fund investments according to your risk profile and investment goals.
No Panic While Investing
Unsurprisingly, as they are starting their investments, millennials tend to panic or fear that mutual funds will not be profitable. However, there is no need to panic because it can make investors unable to think clearly and lead them to make the wrong decisions.
So, to avoid panic while investing, millennials can do several things. Let’s start with being diligent to find out information and understand the ins and outs of mutual funds that are being undertaken. Also, recognize the investment risk profile so that you won’t choose the wrong investments.
We recommend that you use "cold" funds or idle funds to invest. Do not use savings funds for education or emergency funds. The point is, don't get into debt for the sake of investing. Finally, always evaluate your investment at least every 3-6 months so you know the performance of your investment and plan what to do in the next month.
If you are confused about where to invest, millennials can rely on mutual funds products from PermataBank. PermataBank offers mutual funds with satisfying returns. The asset classes offered by PermataBank also vary, from mixed mutual funds, stocks, fixed income, to money markets. You can also start investing in mutual funds and manage them directly from the PermataMobile X mobile banking application. Millennials, let’s start a stronger financial condition for your future now with
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