Many investors use Money Market Mutual Funds as an investment option. For those with medium-term investment goal, Mutual Fund products that have the potential to provide this benefit are also highly suitable.
But before discussing things that affect the value or price of the best Money Market Mutual Funds, you need to know the importance of investing in Mutual Funds for the future.
Benefits of Investing in Mutual Funds
Here are some important benefits of investing using Mutual Funds.
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Minimizing Debt Risk
The first benefit that you can get by investing using Mutual Funds investment instruments is that you can minimize debt risk. This happens because you can use the profits from investing as an emergency fund. So when you need money for certain emergency needs, you still have savings in the form of investments that you can withdraw at any time, and you don't need to look for loans.
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Building The Future You Aspire
Another investment benefit is that you can build a future that matches your aspirations. You can use the profits from investing in education and health funds according to your needs.
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Avoiding Consumptive Lifestyle Habits
In addition, you can also use investment instruments to avoid consumptive lifestyle habits. A consumptive lifestyle will make you have expenses for things that are not important. If you invest, your mindset can change, and you may prefer to allocate money from your income to invest.
Advantages of Investing with Mutual Funds
Before discussing things that can affect Money Market Mutual Funds investment, you also need to know what are the advantages of Mutual Funds investment. Some of these advantages include the ease of investing and diversification using Mutual Funds.
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Practical
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The first advantage of using Money Market Mutual Funds investment is its practicality. Mutual Funds are quite practical because you can make buying and selling transactions anytime and anywhere. In fact, the redemption of Mutual Fund investment funds is also easier.
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Easy
The second advantage of Mutual Funds investment is that it is an easy investment instrument. It’s convenient because this investment does not require in-depth insight and knowledge.
Mutual Funds will be managed by a professional Investment Manager. In fact, this investment is also known as a safe investment because it has a license, registered and under the supervision of the OJK (Financial Services Authority).
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Flexible Capital
Furthermore, you can also use Mutual Funds because they are classified as investment instruments with flexible capital. You can freely determine how much capital you can set aside to own potentially profitable Mutual Funds units.
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Tax Free
Then, you can also use Mutual Funds because they are classified as a tax-free investment instrument. All the profits and returns you gain do not need to be deducted by taxes anymore.
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Asset Diversification
Finally, you can use Mutual Funds investment instruments to minimize the risk of loss because you can implement a diversification system. This is because the investment portfolio of Mutual Funds product is divided directly into a number of different assets.
Things That Affect Money Market Mutual Fund Prices
After knowing some of the advantages of investing in Mutual Funds, you also need to know what affects the price of Money Market Mutual Funds. Read through the explanation below regarding the things that can affect the price of Mutual Funds.
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Cash Flow
The first factor that can affect Mutual Funds is Cash Flow. This happens because the ups and downs of Mutual Funds performance are influenced by investors’ interest. If the investors' interest in a Mutual Fund unit is very high, the Investment Manager will manage the unit aggressively.
Vice versa, if a Mutual Funds product has few investors, the management of the Mutual Funds investment funds is limited, and the Investment Manager is less aggressive.
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Interest/Coupon Payment
Interest/coupon payments are also among the factors that affect the price fluctuation of Money Market Mutual Funds. The reason is, Money Market Mutual Funds are placing funds for investment in short-term debt instruments, or bonds that have maturities of less than 1 year.
These interest payments made by Bonds and Time Deposits can increase the price of Money Market Mutual Funds.
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Interest Rate
Then, the thing that can affect the price of Money Market Mutual Funds is the interest rate. This is because the increase in bank interest rates also affects fixed deposits and the money market.
But this is inversely proportional to the ups and downs of stock mutual funds. If bank interest rates decrease, stock prices tend to increase.
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Investment Manager Fees and Expertise
Another thing that also affects the price of Money Market Mutual Funds is the fee and expertise of the Investment Manager. The fees you need to spend to use the services and services of the Investment Manager are used for the Investment Manager's service fees, marketing costs, back office costs, and so on.
In addition, the expertise of the Investment Manager can also affect the success of Mutual Fund investment. This happens because the Investment Manager's expertise in choosing profitable securities as part of the investment portfolio will determine the success of Mutual Fund investment.
Not only that, but the Investment Manager’s expertise is also needed to be able to determine the right time to make a transaction. As well as determining the right time to sell or buy securities that have potential profits.
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Related Sector Performance
Finally, you also need to know that the performance of the related sector can affect the price of the Mutual Fund. If you choose the oil and gas sector as the Mutual Funds investment sector, the fluctuations in the price of the Mutual Funds will be influenced by the fluctuations in oil and gas prices.
Strategies for Maximum Profit on Money Market Mutual Fund Investment
There are several strategies that you can use to maximize the profit of Money Market Mutual Fund investment. Here are 3 right strategies when investing in the best Money Market Mutual Funds.
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Market Timing Strategy
The first strategy that you can use to get a profit is to apply a market timing strategy. The use of this strategy will make investors have a reference in buying and selling Mutual Funds.
Like buying an investment asset when the price of the asset decreases. And vice versa, investors will make sales transactions when asset prices increase.
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Buy and Hold Strategy
Furthermore, you can also apply a buy and hold strategy. This strategy is the easiest strategy to do. That is by buying a number of investment assets and then holding them for a certain period of time until they reach the intended profit.
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Dollar Cost Averaging (DCA) Strategy
Finally, you can also apply a dollar cost averaging strategy. You can implement this strategy by buying investment assets regularly within a certain period of time. However, you also need to offset the purchase transaction, namely by buying assets in large quantities when the asset price decreases.
Advantages of Investing in Money Market Mutual Funds with DBS Treasures
After knowing the right and proper Money Market Mutual Funds investment strategy, you also need to know the advantages of investing in Mutual Funds with DBS Treasures. The following are 4 advantages of Mutual Fund investment with DBS Treasures priority banking.
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Investments Managed by Professionals
The first advantage that you can get by investing in Mutual Funds with DBS Treasures is that they are managed by professional Investment Managers. DBS Treasures partners with experienced Investment Managers to optimize product performance.
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Gain Insights in Investing
Another advantage of investing in Mutual Funds at DBS Treasures is that you can gain investment insights from a team of financial experts. The team of financial experts at DBS Treasures are reliable and proactive in communicating information related to market analysis and the latest investment opportunities that have been tailored to you, so you can confidently make the decisions.
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Implement a Diversification System
In addition, you can also implement a diversification strategy to minimize the risk of Mutual Funds investments. Diversification is the spread of funds or capital held in various types of investment assets available.
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Easily Process Investment Transactions
Finally, you can also easily process Mutual Funds buying and selling transactions through the digibank by DBS Application. In addition to making buying and selling transactions easier, you can also do switching.
Seamlessly do the Mutual Fund analysis with the support of Infovesta data before making a transaction, also available in the application. New investors can also create and register Single Investor Identification (SID) on the digibank by DBS Application.
