by Didit Hastanto

Created on: January 24, 2009   Last Updated: January 25, 2009

The placement of investment funds as a process of planning for long-term goal, it can be done through various ways, both with themselves and do so through a securities company or financial services company / investment other. The determination of how this as important as the investment itself.

Through self-invested securities companies (for example, to make stock) requires not only knowledge and information but also adequate time. If we have access to information but does not know its use, then that information does not provide any benefit. Most people in the productive uisa only have a little time to make their own investment because it is too busy with work. When forced to invest independently without having the knowledge, information, and sufficient time, the benefits that can be searched, but the loss is obtained.

For that we see the importance for individuals to know and understand the various investment strategies that are generally known.

Buy and hold versus market timing

In general, we know two ways to invest, the buy-and-hold and market timing. The first way is to buy some alternative means of investment and keep holding for a long period of time. Hope is that the magic compound interest (the magic of compound interest) can be realized so that it provides the opportunity to provide great benefit in the long term. So, perspective and long-term consistency to be the key. At another stronghold, the timing the market (MT) did not agree with the arguments buy-and-hold (BAH). According to the citadel MT, investors can not be injured when using the price fluctuation (volatility). MT encourage supporters to take advantage of price changes in the market. For example, when prices are declining and then you buy it when you sell the price rise. In short buy low sell high, buy low or sell high. With so investors will get the maximum benefit from the investment.

Market timing strategy that is accurate promises of extraordinary profits. Professor Robert Merton, Nobel Economics Prize winner in 1997, examines the three investment strategies using data New York stock exchanges in the period 1 January 1927 - 31 December 1978. Third strategy started with initial capital of U.S. $ 1000. The first strategy, a strategy only deposits, is a securities investment in the short term 1 month (such as commercial paper or T-Bill) and the principal and the interest rates in early-rollover each month. The second strategy, called the buy and hold strategy (buy-and-hold) is an investment

• 1
• 2
• 3
• 4
• Next Page >>