1.) Bonds
- Also known as fixed income securities.
- When you purchase a bond, you are lending out your money to a company or government. In return, they agree to give you interest on your money, and eventually pay you back the amount you lent out.
- Bond are practically have a guaranteed return and risk free if you are buying from a stable government, but due to little risk, it also gave small returns.
- Bonds is one of the lowest return on investment instrument due to low risk.
2.) Stocks (Saham)
- Also known as equities.
- Buying it would make you become part of the business owners.
- Entitled you to vote at shareholder's meeting and allows you to receive any profits or dividends allocated to it's owners.
- Very volatile, fluctuate on daily basis.
- No guarantee of profits when buying, not even dividends. Most of the profit source comes from the stocks value goes up.
- Relatively HIGH RETURNS, comes with the risk of losing some or all your investment.
3.) Mutual Funds (Unit Trust)
- A collection of stocks and bonds.
- When you buy a Mutual Fund, you are pooling your money with a number of investors, which enable you to pay a professional manager to select specific securities for you.
- Each mutual fund have their own strategies example large stocks, small stocks, government bonds, companies bonds, stocks and bonds, stocks in certain industries, and stocks in certain countries, etc.
- No time or experience needed to invest as you already have a professional manager to manage your funds.
- Relatively higher return than bonds, and lower return than stocks, but with a manageable risk.
- The risk will be lower the longer your investment period due to Dollar Cost Averaging (DCA)
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