Ask your money to work<\/p>\n
JAKARTA (JP): Undoubtedly, there are still people consciously
\nand continuously seeking out all business opportunities, even in
\nsuch an adverse economic situation.<\/p>\n
A success story often does not require a born entrepreneur,
\nbut is usually the fruit of grim experience, or at least some
\nsort of sacrifice.<\/p>\n
But we all believe that one cannot make an omelette without
\nbreaking eggs, don't we?<\/p>\n
In an interview on Friday with The Jakarta Post, investment
\nobserver Elvyn G. Masassya said there were many opportunities
\navailable despite the tense political situation, violence in
\nseveral provinces and the plunge of the rupiah.<\/p>\n
The door, he said, is wide open for individuals from all
\nbackgrounds, with large or small amounts of money.<\/p>\n
\"But before you decide where you want to place your money, you
\nfirst have to know your own personal character. Are you a risk-
\ntaker or a risk-avoider?<\/p>\n
\"From there, you can decide on the proper investment for you
\nunder the current circumstances,\" Elvyn, a member of the Center
\nfor the Study of Business Communication and Politics, said.<\/p>\n
The next step, he said, is to draw up an investment plan,
\nwhether it is a one-year project, for the long term or
\nspeculative.<\/p>\n
\"Based on this, we can now move forward to discuss the types
\nof attractive investments given current macroeconomic
\ndevelopments.\"<\/p>\n
Elvyn personally suggested investing in the financial sector.
\n\"In the corridor of my knowledge, the correct investment
\nprinciple nowadays is not how to work to earn money, but how to
\nlet your money earn money.\"<\/p>\n
So, order your money to work for you.<\/p>\n
And this, Elvyn said, can only be done at the optimum level in
\nthe financial sector.<\/p>\n
\"The other sectors require you to have adequate technical
\nqualifications. If you want to play in the plantations, for
\nexample, you have to know plantations.<\/p>\n
\"In the financial sector, you can do it based on your personal
\ncharacter,\" the columnist said.<\/p>\n
According to him, investment in the financial sector can be
\ndivided into four subsectors: the money market, stock exchange,
\ncommodity exchange and conventional banking services.<\/p>\n
\"In my personal point of view, the money market is the
\nsubsector in which you can gain the quickest benefits, but it
\nalso carries the highest risk.\"<\/p>\n
Which of the four subsectors is the most attractive in 2001?<\/p>\n
\"Still the money market, since it is directly linked to the
\nvolatility of currency exchange rates,\" Elvyn said.<\/p>\n
He said the money market was not only about the rupiah versus
\nthe US dollar. \"One should also play with the other currencies,
\nsuch as the euro.\"<\/p>\n
The next investment option for this year is buying stocks and
\nputting money in savings accounts.<\/p>\n
The next question is whether we have to put all our money
\nin one subsector, or should we invest them equally in the four
\nsubsectors.<\/p>\n
\"Given the current situation, I would say that a risk-taker
\ncould place 50 percent of his money in the money market, with the
\nremaining half divided equally in the stock exchange and banks,\"
\nElvyn suggested.<\/p>\n
Why?<\/p>\n
A risk-taker, he explained, can achieve optimum gains only by
\nventuring into volatile areas.<\/p>\n
\"At this time, holding the U.S. currency is a must. But still,
\none has to play with other currencies, too.\"<\/p>\n
In the stock market, Elvyn suggested investors deal with
\nsectors that, for instance, have been identified by the
\ngovernment as priorities.<\/p>\n
One alternative for a long-term investment, he said, is the
\nproperty sector, such as real estate, which is still not popular
\nwith today's investors.<\/p>\n
\"The other alternative is sectors that have benefited from new
\ngovernment regulations, such as the alcoholic drinks that are now
\ntaxed as luxury goods,\" Elvyn said.<\/p>\n
Export-oriented firms are sometimes not as promising as they
\nshould be because of the reality that only certain goods receive
\na warm welcome in overseas markets.<\/p>\n
\"Consumer goods is a more promising area,\" he said.<\/p>\n
In the capital market, there are several options, like bonds
\nand mutual funds. \"It is good to consider a mixed composition.\"<\/p>\n
Elvyn suggested investors buy bonds issued by corporations in
\nUS dollars. \"They are much attractive than bonds issued in rupiah
\nby the government and corporations.\"<\/p>\n
Why?<\/p>\n
\"Because there are many such (rupiah-denominated) bonds
\noffered on the black market in order to avoid taxes, which has
\nreally discouraged the market,\" Elvyn said.<\/p>\n
In the banking sector, he prefers a blend of savings in the US
\ndollar and the local currency. \"Principally, it is half-and-
\nhalf.\"<\/p>\n
US dollar savings are quite attractive at the moment, while
\ninterest rates for rupiah savings should tend to increase
\ngradually until late this year, he added.<\/p>\n
Putting money in fixed deposits requires accurate
\ncalculations, he said. \"One thing many people forget is the
\nduration of the deposits.\"<\/p>\n
\"Under the current circumstances, where there is still
\npressure on currency exchange rates and fluctuating interest
\nrates, relatively safe deposits are medium-term ones, that is
\nthree or six months,\" Elvyn said.<\/p>\n
And if you are a risk-avoider, you should opt for the reverse
\ninvestment distribution: put half of your money in the bank, 25
\npercent in the stock market and the remaining 25 percent in the
\nmoney market.<\/p>\n
What about next year?<\/p>\n
First, evaluate your investments every quarter since the
\neconomic cycle moves every three months.<\/p>\n
But, as the saying goes, never put all your eggs in one
\nbasket. (bsr)<\/p>",
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