Tips Investing According To BNI Director-style Risk Profile

Rupiah (photo: dock. Antara)

JAKARTA - Director of Retail Banking of PT Bank Negara Indonesia Persero Tbk (BNI) Corina Leyla Karnalies shared tips on investing according to the risk profile of each individual.

"The risk profile is a basic guide for determining the balance between risk tolerance and expected returns," Corina said, citing Antara.

First, investors need to know the cash flow, namely the amount of income and routine expenses so that the allocation of funds for each investment post can be determined appropriately.

Then, knowledge of the type of investment instrument is also key. Corina suggested that investors first ensure the amount of funds budgeted before determining the appropriate type of product.

"After all these factors are identified, the next step is to choose investment products based on the needs of funds and their respective risk profiles," he said.

Corina provides guidance on choosing investment products according to the financial period and objectives. For less than one year of funding needs, products such as savings, deposits, forex trading, and mutual money market funds are the right choice. For a period of one to three years, he recommends instruments such as state retail bonds, mixed mutual funds, and mutual funds.

Meanwhile, for those who have an investment horizon of three to five years, mutual stock and gold funds are an option that can be considered. For long-term investments over five years, property, land, bonds, and shares are said to be profitable options.

He also explained the fund allocation guidance based on investor risk profiles.

For investors with conservative profiles, Corina recommends a 10 percent allocation for pure insurance, 30 percent for cash or deposits, 30 percent for mutual money market funds, and 30 percent for fixed income mutual funds for short-term investments in less than three years.

For investors with moderate risk profiles, allocation can be done by dividing funds into pure insurance 10 percent, cash/deposit 20 percent, mutual market funds 20 percent, fixed mutual income funds 20 percent, and 20 percent shares for medium-term investment between three and five years.

Meanwhile, for those who have an aggressive risk profile, the recommended allocation is 10 percent for pure insurance, 10 percent for cash/deposits, 20 percent for fixed income mutual funds, and 60 percent for mutual shares or direct shares for investment in the three to five year period.

"Every investment has a risk. Therefore, it is important for every investor to adjust the choice of investment instruments with their respective risk profiles," he said.