11:04 PM
AGHA
Happy Investing, Happy Voting!
Why voting? 2018 and 2019 will be our country’s election year. Get
prepared, Indonesia! Hope we can take the advantage of this.
We got two big issues to
discuss today; The Fed rate and Election year (Indonesia). From these issues,
we’ll give you some consideration to invest your money and rate of return
comparison of several investment instruments so
that you can “place” your money better.
Before we talk about the issues, let’s compare which haven has the
better “treatment” for your money.
INSTRUMENTS
Foreign
Exchange (Forex)
It was 2008 when one USD was equal to 8,900 Rupiah (IDR), we converted IDR to USD
regularly and let it “sleep”. Yes, we bought USD every month and we did it till
one USD/IDR hit 9,500. Just let it sleep, guys.
That’s right! You can see that today, one USD is equal to 13,700-13,800
IDR, what a gain! Especially if you have 100,000 USD right now. So, let’s just say that we had one USD for 9,000
IDR, and now we have one USD for 13,700 IDR. That means we have 52% profit margin.
Before you convert IDR to USD, please consider the sharia law. We can't buy money for money unless you need it for export-import activity. Be very careful.
Gold
We started to buy gold around 5 years ago. Yes, it was 2013, a moment
when gold experienced its biggest drop; from more than 600,000 IDR/ gram to
480,000 IDR / gram (1204.5 troy ounce).
It’s not just a decline, more than that, it’s an advantage instead. Yes,
that was the right time to buy gold; Gold had never been this cheap before. We
bought gold for the first time in 2013 when it cost 490,000 IDR/ gram. We
bought it regularly; once in three months or once in a semester. It depended on
the budget. Just like forex, of course we let it sleep.
As you can see the gold costs 625,000 - 650,000 IDR/ gram nowadays (it
even hit 1,350 USD/ ounce several week ago). Let’s assume that we have 135,000
IDR profit in every single gram of gold (625,000 – 490,000), that means we have
27.55% profit margin.
Business
Such a great experience collaborating with my friends to establish a
business. Cellular business exactly. It’s not a
coincidence I met great partner to run a business. We knew each other well
before we founded it (I actually joined them when the business had
established).
The three of us put 900,000 IDR capital into business. It turned out
very lucrative. Joining them in 2015, we got break event point in less than two years (I could say that I got
capital gain in one year only).
Unlike two kinds of investment above, in business, you can’t let it
sleep. You need to make it bigger, expand it, and manage it well of course. And
today we have the fourth member to run the online business division.
Property
Putting your money in property is fantastic. It grows more than 16% just in one month. We
started to buy a plot of land in February. Our smile has never been this big as
we learn that the price already moved up at the beginning of March.
Find the best payment to own a property from now, because it tends to
get more expensive as the time goes by.
Stock
By the end of 2015, The Jakarta Composite Index touched above 4,500 IDR. By the end of 2017, it made
a record for itself; hit 6,000 IDR for the first time. Indonesia Composite was
closed at 6,304.95 at the closing of last weekend. That means we can achieve more
than 30% capital gain. What a
gain!
ISSUES
Raising The Fed Rate
We still remember when The Fed raised rate by the end of 2015 for the
first time in a decade, the price of gold was quite affected but then the gold
kept raising until today.
Another story, it seemed that USD
kept moving up against IDR. It was only 9,000 IDR for one USD in 2008 and today USD/IDR likely to drop to 14,000.
In spite of The Fed’s raise, since it is not the first time they raise
rate, we believe that gold won’t sink
further. There will be a correction but won’t be big. Just keep in your
mind that “history repeats itself”, gold keeps moving up despite facing the
raising rate several times.
On the contrary, we predict that IDR will drop deeper. IDR never gets better against USD recently.
As Powell succeeded Yellen, the issue got stronger and they planned to raise rate
four times this year. We can’t deny that when this happen, foreign investors
will bring back the fund to the USA. It is common thing that investors expect
higher return when The Fed rate gets higher as well. That’s why IDR will surely
fall.
Election Year
Election campaign is inevitable. The campaign uses any means of
communication. That means today is the
right time to buy stock of telecommunications service.
When the election reaches its climax, normally the market reacts. Or you can
relate the price movement with candidates’ promises so you can choose which
stock is the best to buy.
The price
of property usually raises as the countdown to election begins. Who knows
that the elected candidate think about a mass infrastructure development in the
future. Who knows that the elected one plans to issue a policy to boost up a
business’ prospect.
STRATEGY
Some investments have certain treatment. You can make gold, stock, bond,
or even forex fall asleep after buying them. You can “wake them up” when you
need it or when the time seems to be pretty good to sell. In business you need
to always upgrade it, expand it, and manage it well. Any important issue should
be watched because there is an affection for sure.
Different instrument, different issue! Some will gain a maximum profit when crisis engulf us, others will
gain a profit as well as the economic outlook has a bright future.
You don’t need to be rich to invest,
you need to invest to be rich! The key
of investing is budgeting. Don’t spend your money, at least save it every month and start to invest.
When you can save regularly, you can invest regularly then. Buy any kind of
asset once in every three month and it’s much better if you can buy once a
month.
Stay rational, not emotional. For beginner, you can follow the mainstream of
investors’ habit. Hold your Gold and IDR until they announce the raise. Start
investing now regarding the election. Remember, prediction can be wrong and therefore prepare yourself well!
Happy saving, happy investing, happy electing!
