World Buying Stock

But what happens in the market is not as simple as that. According to Handy, in addition to these factors, there are other factors that make investors provide different offerings in the secondary market.

“Determinants of bond prices is the biggest factor is interest rates,” he explained.

Continuing the illustration above, if when he bought bonds earlier in the second year, where interest rates have decreased to as low as 6%, then the movement of bond prices in the secondary market will depend largely on expectations of interest rate trends.

Illustration like this, if investors are speculating the future trend of interest rates will go down, call it to the level of 5%, then he will put up bidding to buy at prices above the price of Par.

“In this way, he will have a YTM of getting bigger in the future in line with the downward trend in interest rates,” said Handy.

Conversely, if investors are projecting the future interest rates will go up, call it to the level of 8%, then the consequences will be receiving the projected yield will decrease.

“Therefore, to still get a big yield, he would put the price bid under Par,” said Handy.

Handy explained that the simple formula as follows:

If SBI is projected to decline, YTM will decrease, then prices will tend to rise.
If BI is projected to rise, YTM will go up, then prices will tend to fall.

Therefore, further Handy, to play bonds in the secondary market, investors should pay attention to the calculation of projected trends in interest rates. Therefore, the trend in interest rates greatly affect the movement of bond prices in the secondary market.

“Factors to be considered is the trend of inflation in the future. Therefore, the trend of inflation go hand in hand with the trend of interest rates (SBI). If inflation rises, the SBI will go up also, conversely, if inflation goes down, then SBI will come down anyway,” he said .

Well, talk about the macro economic conditions in the future Indonesia, said the latest projections into the second half of 2010 will be a global economic recovery. This recovery will certainly include Indonesia in it.

“Economic recovery is usually accompanied by rising inflation which of course will cause an increase in interest rates higher,” said Handy.

By simple logic, it can be assumed, in the future will happen, which means higher interest rates would make bonds YTM products has increased as well.

Then the consequences will be a decline in bond prices in the secondary market ahead of the second half of 2010.

“The decline in prices and the adjustment as it already started to happen from now. Investors seem to have anticipated the projected rise in interest rates early on. For investors who speculate in interest rates will rise right in the second semester, it would be better to buy now because prices are still high, thus received YTM will be greater,

Wealth Management is closely related to monetary policy taken by the central bank. Wealth management is strongly influenced by both market conditions and money market capital markets. Inappropriate monetary policy would reduce the value of existing property or can even spend the wealth that has been managed well in advance.

Nomination of candidates for Governor of Bank Indonesia by the President to the House some time ago, can not be separated from the expectation that they proposed to have the ability to produce a good monetary policy and has the capability commensurate with the implementing fiscal policy coordination to achieve the national growth rate (GDP) at once able to control inflation and the stability of the rupiah to the right.

Bank Indonesia as the central bank’s duty to make monetary policy (monetary policy) that could lead to:
1. Raising or maintaining the rate of growth of national economy. Certainly here need a close coordination with fiscal policy (Fiscal Policy), which was headed by Coordinating Minister for Economy and Finance Minister as the architect of the state budget. Raising the rate of economic growth (GDP) means to raise the level of national prosperity. This job requires intelligence and intellectual ability with an educational background of good monetary, as well as the ability to coordinate with the authorization holder of Fiscal Policy (Fiscal Policy) in calculating the exact rate of growth of the right to certain conditions.
2. Controlling the economy not to get overheated or otherwise not in a recession, by combining Monetary and Fiscal Policy. Necessary intellectual ability with a background of monetary theories in order to steer the economy through the bumpy road of economic growth called the business cycle. Also need to have knowledge about the mechanism of fiscal policy and the multiplier to coordinate the intellectual equivalent to the Coordinating Minister for the Economy and Finance Minister.
3. Controlling inflation through monetary policy. Inflation is too high will lead to poverty. The increase in income or salary or any of its fixed income, there is no point if the rate of increase is equal to the rate of inflation. Bank Indonesia as the holder of Monetary Policy (Monetary Policy) should be able to coordinate with the Coordinating Minister for Economy and Finance Ministry to control inflation. Because if not then the rate of growth has been achieved will be of no use and the longer the economy would lose competitiveness against overseas, unable to export, and the rupiah would be weakened (depreciated) and worthless.
4. Keeping the rupiah currency to remain stable. Without the ability of intellectual background of international monetary and finance fields, both theoretical and field experience, can be said to be rather difficult for someone to be able to tame the currency such as the rupiah to remain stable. Knowledge and experience in this field must exist. Without this kind of experience, we deserve afraid that the rupiah would be volatile (volatile without controls and without direction), let alone the general election was in front of the eye.
5. Central Bank in this Bank Indonesia should be able to handle the commercial banks, rural banks, as well as other intermediary functions in the field of credit. Commercial banking and lending is only a small part in monetary policy. The ultimate objective of monetary policy held by Bank Indonesia is to achieve or maintain economic growth rates or in other words, the increase of national prosperity is directly, not solely make the regulation of credit.

mortgage rates go down and down it? Though the BI rate already dropped to 8.25%. Instead of BI’s benchmark rate for banks to determine interest rates both deposits and loans? These comments are often out of the community. Not only consumer lending rates, lending rates are also the same as working capital. Still have not seen any decrease.

Why did this happen?

Bank is an intermediary institution that is an institution that collects funds from the public (third party funds) and returned to communities in need through loans. Third-party funds in the form of savings, current accounts and deposits. Among the three products is usually the highest deposit interest rates is because there is a period of 1, 3, 6 or 12 months.

Determination of loan interest rates are influenced by many factors, including liquidity, interest costs (cost of funds) to fund a third party. Current deposit rates in the market is still in numbers ranging from 10% – 13%. Interest rates are not only offered by private banks that liquidity problems but also by the large banks are also a red plates bank liquidity problems that in fact no bandwagon to raise interest rates so as not to be abandoned customer deposits. Funds of funds is called expensive. This makes the bank has interest costs (cost of funds) high that interest rates are very difficult to be lowered.

One of the other alternatives in terms of anticipated shortage of liquidity is the Interbank Money Market (interbank). We recommend that banks with excess liquidity lend funds to banks in need so it does not happen again unfair competition in the market. But this seems not easy because the banks with more liquidity would not lend their funds because there is no guarantee the funds will be returned. During the bank’s funding needs are not met then as long as it also deposit rates will remain high and interest rates are also engaging high. Monetary authorities in this Bank Indonesia should take immediate steps for liquidity drought could be overcome so that the bank can re-run its intermediary function because the current credit as well so went along dragging.

Merchant Cash Advance

With the task of Bank Indonesia as above, is almost certain that the task performed by the prospective Governor of Bank Indonesia is not an easy task. Besides the need to have a sophisticated intellectual background with a strong educational background in the field of international monetary and finance, must also have experience in the field of international economics and finance as well as the knowledge and skills in order to coordinate fiscal policy that is commensurate with the intellectual authority of fiscal policy in the Coordinating Minister for Economy and finance department.

Do not let the Governor of Bank Indonesia to make a spay Monetary policy multiplier effect of fiscal policy made by the Coordinating Minister of Economy and Finance Minister. Or conversely, do not let the Governor of Bank Indonesia monetary policy-making that caused the economy overheated due to the Governor of Bank Indonesia can not afford to see a strong multiplier effects that occurred from fiscal policy.

Thus we can say, the next Governor of Bank Indonesia must be someone who has the intellectual capability and educational background is quite strong in the field of monetary policy (in particular) and fiscal policy as an extra.

Then, the international experience of a Governor of Bank Indonesia shall be required, because the rupiah we fight in the international market. What can be understood and addressed locally often can not be applied internationally. Here required an economist by background. It’s not enough just knowledge of banking. Knowledge of the difference (disparity) international interest rates, the disparity in the level of international inflation, net of income disparity in the level of international inflation will be very decisive in making good monetary policy.

Without the abilities mentioned above, monetary policy is almost certain that we produce is an inferior monetary policy. The consequences of monetary policy is inferior is the occurrence rate of economic growth is inferior or always below the target so it can not provide adequate employment. A second consequence of monetary policy is inferior is always out of control inflation, meaning that although there is rising income levels, but always crushed out by inflation. The consequences of monetary policy is inferior the latter is weaker rupiah continued, so currency, we do not serve as a tool for store of value, means of storing wealth. Surely in the long run will damage the stock of money and stock markets.

Playing in the stock market can provide benefits far doubled compared to saving money on deposit or invested in bonds. But playing in the stock market could also lead to substantial losses. Therefore before deciding to play the stock is very important to evaluate whether you are someone who is willing to take risks commensurate to a commensurate benefit. The greater the risk that would result in greater profits.

If the risk is greater the yield advantage that only small, means we are wrong to apply the most basic financial strategies, higher risk, higher profit or lower risk, lower profit. This underlying why deposit rates quite low, because the risk of deposits is also quite low.

Thus, choosing to play the stock, rather than bank deposits, means having to obtain greater profits from the deposit. If it turns out the benefits derived from the deposit rate is lower, then there is something wrong in how you play the stock.

The following are the steps you need as a beginner to play the stock. This article assumes that you have read the book enough to understand the mechanisms that play the stock, as well as procedures to open accounts at securities companies.

General formulation:
1. You must have a big enough desire to play or learn how to play or have a strong desire to earn profits by investing in the stock market. It must be ingrained in you from the start, or never play the stock, you should buy mutual funds only. Formula One is: you must have a strong urge or desire to play the stock and profit.

2. Play in a fairly small amount in advance, such as Rp 10 million or USD 20 million since there is always a small possibility of a loss could be too big. Therefore play in a small amount of money, such as pilot projects. If you start to feel comfortable and know how to play to generate a profit, then you can slowly increase the amount of money invested. When adding the amount invested, always remember that the money that you can add up, do not just remember that once you earn, but you must remember that investments can be reduced even exhausted. You never know when an important event that negatively impact the market place; suddenly could happen prices plummeted, and you did not get out of the market. The second formula is: always remember that the money you invest can be reduced or even exhausted.

GARP

GARP is an acronym for Growth at a Reasonable Price. The world according to GARP investors, combining the approaches of value and growth, adding the numerical point of view.

Professionals are looking for companies with solid growth prospects whose stock prices do not reflect the intrinsic value of the business, obtaining a “double payment” as earnings increase, and the equation price / earnings, according to which these earnings are valued – also are increased. Peter Lynch is one of the most famous GARP professionals worldwide.

“Knowing what you have” is the fundamental principle of Lynch. In the process of choosing stocks, mutual funds, etc., the investor should investigate any type of detail in their possessions. Knowing who is the manager of the fund. Investigate the investment style of the managers and their performance in different market conditions.

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Investment model 3 – Retain value

So far I comment on 2 investment models that can be used at any time, they are the “price” and “seed capital.” Today I will talk about another model called the “hold value.”

If you look at the photo you can tell today I added the surname of a player known “Messi.” If you are not aware of who is this guy, you tell your story briefly:

“This young man began to show football skills when he was 5 years. After being in Newells how in River, ended up playing for FC Barcelona at age 17, becoming the youngest player in the history of FC Barcelona”

Very briefly, but goes straight to the point of what I want to say, the model of “Hold Value”:

* How does this model?

It is very simple, perhaps at first not be aware of the possibilities you have and can not find any way to retain value, but keep in mind the possibility. This model operates under the idea of retaining anything that we can generate a value later. This value will obviously be a return on investment we have made. (more…)

Investment model 2 - buy cheap sell expensive

In the previous issue I commented on the first model of investment we can use. This was the “price” and basically trying to follow the technique of “buy low, sell high” and are getting good prices by chance, or simply search through our contact network.

But today’s model will see the “seed money” and how it works. Obviously this model of investment is very different from before, but if you know how to use his techniques, you will generate better returns than using the previous model.

How does this model?

This model is used when you want help with an amount of capital, an entrepreneur in his project to launch how to improve the work he is doing. In this case we have a difficulty that is the “risk” because if the project is not launching, do not know if it actually works or not.

What about strategies for entry and exit? (more…)

Due to a problem with accents in Blogger titles, 2 of the old main blog entries were left without the correct link, the rarity of this is that some time ago entered. These inputs are the investment models are 4.

In truth the problem lies in the model 1 and 4. The solution is to put in the URL address “N” at the end of the word “INVESTMENT” so that it “investment.” The other and more convenient solution was to create the post again to have the 4 models together and print them all in one step if you want.

Then the explanation of each model.

Investment model 1 – the price

In the previous issue I commented on the entry and exit strategies that must be present at the time of investment. In this issue I will discuss one way (or models) of investment we have in mind to grasp opportunities.

This model is the famous system of buying at low cost to sell at a higher one. Many people do this activity, for example, those who go to stores that sell products on a wholesale and then sell them. I can buy a soda at a store, but surely if I buy a whole pack to get a better price.

* How does this work? (more…)

Diversification in terms of personal finance is an investment strategy of distributing the money in various investments, rather than concentrating it in one investment or one type of investment.

Diversification is a strategy widely recommended by experts because it is considered the most effective way to reduce or control risk when investing.

If an investor decides to focus all of their money in one investment, you run the risk that investment and get bad results get to lose some or all of their money.

In contrast, if you invest in a diversified way reduces or minimizes the risk as to lose their money, many of the investments acquired would have bad results at the same time.

Every investment involves risk always, usually, the more potential to provide an investment return, the greater the risk involved and, conversely, the less profitable offers, the lower your risk.

As the ideal time to diversify is to create a portfolio or investment portfolio that combines investments that offer high returns but also high risk (eg, business or shares), and investments that offer low profitability, but higher security (for example, term deposits or mutual funds).

The ratio of these two types of investments will be given by our profitability objectives, the risk that we will be willing to take, or the investment profile we have.

If, for example, we get a higher return, most of the investments that comprise our portfolio investments will be offering high returns, but also greater risk. If we have a low tolerance for risk, most of the investments that comprise our portfolio investments will be offering low returns, but less risk.