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Bonds are long-term debt certificates which are issued by an institution with a nominal value (par value) and certain validity. Bond issuer can be like private companies, state enterprises, or government either central or local government. One type of bonds that is traded in our capital markets is the coupon bond with a fixed interest rate during its validity. Investing in bonds is similar as investing in bank.

If you buy bonds, you will earn interest / coupon which are fixed regularly usually every three months, six months, or once a year until it reach its validity. When it reaches its validity, the issuer must pay to the investors in according to the value of the bonds along with last interest / coupon. With these characteristics, for those who retire, of course this is a very good investment because of regular needs when they retire.

Bonds could be the best instrument choice, especially if you have financial goals in the near future (medium). Bonds have the potential to give interest rate that is relatively better than deposits and relatively having lower volatility than stocks. With financial goals between 2-5 years, this investment will probably be the best investment.

Financial family plan is a continuous planning. It takes discipline and strong motivation to achieve desired goals. With the limited income that is received each month, it is highly suggested for the family to begin setting a side the funds for financial purposes as early as possible. Placement and allocation of the funds are carried out regularly every month according to the family financial capability. This investment pattern is usually called as Dollar Cost Averaging (DCA).

Here are the following DCA illustrations for placement of funds in the stock market. The concept of DCA has something to do with diversification. The investors in the stock market are diverging by not only put their money at one stock only, but pass it through at many stocks in various sectors. The idea is: if one sector is depressed, then other sectors may be compensated. This kind of diversification is already common and well known to many people.

The problem is, what if all sectors-or in other words, the stock market at a certain time suddenly being depressed? In this situation, that diversification can not do much. One way that is proven can avoid loss is do not invest in stocks. Indeed, by not investing in the stock market means not suffer losses, but you would not get benefits also when the market is rise.

Other more profitable strategy is if you know exactly when the market is going up and when the market is going down (already described). For that you need to have supernatural power like a psychic or have a friend who has a supernatural ability to see the future. But, if you possess this supernatural ability, why waste your time on stock market.

The factors that generally used by the society are usually wrong in determining the preferred investment. Therefore needed perspective or better considering for choosing the right mutual funds for your financial goals. Past performance is not everything, when you examine the behavior of the individuals in selecting Mutual Funds, most of them are seeing one factor only that is past performance. When a mutual fund has a good level of performance on last year, then people will tend to choose that.

Economic theory has played an important role for making a decision. Economic theory is not a certain thing and can be predicted. In an explanation where a case is caused by the existence of other things, it will be very different to your effort to predict what will happen in the future. Why is this thing can not be held? Today’s economic conditions will be very different from the situation in the past. Possibly, different inflation rates, different taxes, probably a different rate of return or different political situation.

Because of many different indications in the matter of economic, political and social, how can we expect the same return rate as last year? Obviously the answer is that you can not predict the future return rates based on the past performance. Therefore it is not right when you decide to choose an investment only because its last year’s performance is very good.

In relation with investment, fear is defined by the lack of trust for the stock market. Many people feel that by investing in the stock market they fear about the loss or even lose all their money. But you also know if the drastic decline that occurring in the stock market certainly is influenced by other reasons which are also great. Other fear for someone to invest in the stock market is the high level of volatility. Or changes in price that is rises and falls very large and fast.

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