Economy and Business Votes

Posts Tagged ‘financial investments’

Once your stock account is ready and you can make sale or purchase of shares, then the hardest part of the investment is to choose a hero who will give the best results for us. Because the stock is a sign of our ownership of the company, so it’s good to think like business owners (business owner). Before determining which companies are willing to buy, do an investigation prior to the fundamentals of the company that you seek.

There are hundreds of companies listed in Indonesia Stock Exchange (BEI). You can start by sorting the companies with which you understand the field of business or companies that have products and superior service. Choose a company that you expect to continue to grow for 10, 20, 30 years into the future. Furthermore, the sorting based management and owners. Choose a company that is managed by a capable management team. Avoid companies that have a trend of “strange”, for example, when a coal company coal commodity price rises but its stock price declined.

There is also a good idea to choose a company owned by government or professional well-known business group. Government-owned company (SOE) is usually “required” for profitable and contribute to the state through the receipt of dividends. Avoid companies that are owned (managed) by business groups that have a less good reputation. Be careful because they not infrequently do the manipulation of financial statements or perform tricks on a rough financial engineering.

Profitability is the value and investment made to achieve it. Investors always measure the profitability of a company you have invested to decide whether to reinvest or withdraw.

A company is not profitable only because of profit. For it is, should produce higher revenues than the costs. Financial assets have a functional extra character, and you are done with surplus resources from the company and its operative management and are outside the regular business of the company.

Profitability is one of the features that the company typically locates its financial investments, but also need to have some assurance that will be able to recover the money invested, and above all that you can do at the time you make missing.

How do you calculate profitability?

The formula used to calculate the payoff is this:
Total Return = (Final value – Initial value / baseline) x 100

For example:
If last year was spent 1,000 euros a share price of the investment fund (NAV) of 10 euros. If the current asset value is 13 euros, the profitability of the fund in a given period of time will be:

(13 – 10/10) x 100 = 0.3 = 30% Total Return Fund

But it is very important to note that this cost should be compared with that of other funds that are in the market where the fund operates and with the market benchmark.

Experts recommend investing in different types of financial products to reduce risk as a type of investment tends to go well when another does not. So have the money in two types of background can help you get a combined benefit of both. It is also essential to know what belongs investor profile: conservative, moderate or aggressive depending on the degree of risk taking investment.