Nearly all of us are probably familiar with the term investment instruments. Some may even have tried to invest with them in the past. For those who aren't as experienced, there are several types of invest instruments, where each instrument offers different potential benefits. If one particular instrument suits your investment style, then it may deem profitable for you. However, the return may not be as satisfactory if they do not alight. Therefore, it is best to be extra careful when choosing an instrument. You would also need to consider the alternative investment methods other than savings and time deposits to subdue inflation.

In this case, you would need to ensure two things. First, get to know all of the available investment instruments. Afterwards, fully understand your investment style. This way, you can be sure that you will choose the most appropriate instruemtn to provide yourself with a comfortable investment and produce optimal returns. The following instruments are some of the option generally available to you in the marketplace.

1. Mutual funds

Investing in mutual funds is a fairly simple method, as you can start with an investment as low as Rp 50,000. It also poses a more favorable return than instruments that are of higher-risk, like stocks. Although managing mutual funds itself is not as easy, you personally do not have to bogged down by it since most of the work is done by an investment manager. In other words, you can simply sit and wait for a decent return as the investment does its job. Regardless, you will still need to do your homework of choosing the right investment manager in order to receive the best possible return and minimize all risks.

2. Shares

Shares is another popular investment choice. However, this requires a great understanding about its circumstance due to its its relatively higher risk; it demands for a thorough, measured, and non-speculative calculation. Starting to invest in stocks is similar to investing in mutual funds, as it simply needs an account opened with a securities company. To do this properly, it is recommended that you look for reputable securities company and ensure that their offered services suit your specific needs. An example would be Mandiri Sekuritas, a well-regarded Indonesian investment banks with a highly qualified team.

3. Bonds

Bonds are another common option for investment. Acquiring bonds means that you as an investor are lending money to a country or company, and issue the debt securities with a certain interest rate. The benefits of bonds include stability and a much lower risk. If you would like a definite yield with a smaller risk of losing money, then government bonds may be the right choice. However, it has its own drawbacks as their return rate or ROI is relatively low. However, fixed-rate bonds are still a good investment option because its yield is usually still above saving or time-deposit rates.

4. Gold

For some people, gold is considered to be an investment instrument with the lowest risk. However, it does not provide an ease of cash flow like the other investment instruments as it only becomes liquid when it is sold again. If you are investing heavily in gold, you must always buy directly from certified companies. Ensure that it is kept in a safe place, and if necessary, rent a safe deposit box at a bank. In terms of price, gold bars that weigh over 50 grams are cheaper than smaller fractional bars that weigh around 5 to 10 grams. Nevertheless, smaller gold bars have a higher chance to become liquid as they are more easier to sell due to their prices not being as high as the heavier gold bars.

5. Derivatives

Derivatives are high-risk investment instruments. Therefore, you would need to invest your money on derivative products of other investment instruments. For example, foreign currency trading is a derivative of cash and an option is a derivative of a stock investment. Generally, derivatives are used as a hedging tool for other investments.

6. Property

Of course you are familiar with this instrument. Even if you do not know what an investment is, you would still know what property is. Property offers a highly secure yield with very little risk. So, it's not surprising that this investment instrument has become very popular in recent years. The increasing price, as well as its lease, generates the return on investment. To start in property, you can begin by buying an older house at a price of below Rp 500 million. A house in this price range can easily be rented to a young family. As long as the economy is currently not involved in a crisis, property investment has a near-to-zero risk. However, it requires a relatively large capital and it is not as liquid as the other investment alternatives. Although simple, investing in property is not for everybody. You must first ensure that you have enough money for your daily needs and have sufficient reserve funds before investing in property.