More secure with dollar cost averaging

Sunday, 14/06/2009
More secure with dollar cost averaging

by: Irvin Avriano (21)

You may be tempted by the rise of stock price of Indonesia Composite Index (JCI) when hit return about 70%, the price index of government bonds (SUN/surat utang negara) up to 35% measuring from the lowest point in October last year.

For a moment the numbers are very tempting you to invest immediately. However, you should not attracted instant games and mess around with the gain. "Do not completely rely on the timing of investment, also apply to the dollar cost averaging [DCA] because it can be more profitable," said President Director of PT Manulife Aset Manajemen Indonesia Denny Thaher reminded.

DCA is a tactic to invest in stages with the same amount on a regular basis and requires investors to be discipline, as not to allocate large funds at just in one time (lump sum). The investment strategy designed to reduce volatility in which securities, fixed amounts at regular intervals, regardless of what direction the market is moving. Thus, as prices of securities rise, fewer units are bought, and as prices fall, more units are bought. also called constant dollar plan.

If the customer allocate capital in large numbers once in a basket of investments, Denny said, the potential gain (profit) and risk that investors will be bearer.

That is contrary to the allocation of investment along with the gradual, so that customers do not need to take the unit prices or conditions around, yet the long-term investment, right?

Some banks and investment managers (MI/manajer investasi) has started implementing a program run DCA, a regular automatic investment. Denny adds, Manulife Asset Management also intends to launch the program next August. Value of first installment to be made minimal, and some have reached Rp100.000.

The program does not advise investors to add to your mutual fund units in large numbers, it only needs sufficient funds from your savings account with restrictions that have been adapted to the prospectus.

The amount of funds that are added regularly to the open-ended mutual funds that have been owned by investors, will be uniformed, as well as the appointed date of the investor himself.

Similar to a savings plan, additional units will be purchased from the funds in savings accounts. The fund is automatically debited with the amount already set on the date you have set yourself.

Beside Manulife, there are at least five mutual fund dealer who is providing the facility for its customers.

They are Danareksa Investment Management with the programs 'Investasiku Masa Depanku', Citibank NA to 'Citi Regular Investment Plan (CRIP), Commonwealth Bank with 'Regular Investment ', Bank Permata is 'Spend & Save', and Bank Mandiri with 'Investment Plan'.

Head of Investment Service Bank Permata Karma Perkasa Siregar said the company had started the program 'Spend & Save' with Fortis Investments mutual fund Indonesia through Fortis Equitra since a year ago.

Private banks are set first purchase the same unit with the addition of further units in the amount of Rp500.000, the relatively small for those who want to invest regularly.

He said in an investment with these techniques, investors can benefit from it when the value of mutual fund units declined. "With the DCA technique that unit would have bought more bullish than the conditions of [strength]."

Attract customers
Danareksa Investment offers future investment programs with a minimum investment value Rp200.000. In fact, a minimum bid that the product before purchasing Rp1 million. "It is expected that customers will invest more," said Head of Marketing Danareksa Investment Diah Sofiyanti. Unmitigated, six mutual fund companies are ready to apply by the program.

Wealth Management Group Head, Bank Mandiri Inkawan D. Jusi said that the company had applied DCA techniques to the program's new Installment Plan socialized early this year. This program, he said, allows customers who usually have to come to the bank wanted to increase the amount of each investment.

Bank Mandiri offers 27 pieces from seven mutual funds that make the MI state bank is a mutual fund dealer.

According to him, enough with the first installment of Rp500.000 generally for a mutual fund, investors can invest regularly units minimum purchase, usually at least Rp100 thousand, depending on the minimum purchase in the prospectus.

Citibank has also prepared program'Citi Regular Investment Plan (CRIP). This program highlights the ease of recommendations for the client to allocate its investments in several capital market investment assets, namely stocks, bonds, and money market.

"Jump is detected when the customer fill out a risk profile, they are encouraged to invest into the type of investment asset, not mutual funds, and we monitor it every time," said Head Investment of Citibank Harsya Prasetyo.

Another with the ease at which Commonwealth Bank offers Regular Investment programs. The program enables customers to invest in more than 50 open-type mutual funds from 10 MI private bank clients are.

According to Head of Wealth Management Commonwealth Bank Rian Kaslan, the program can also be accessed via the Internet, so customers just enough time corresponding to open investment accounts in the branch office.

To facilitate customers to allocate funds, DCA system can be implemented with the help of my program which is managed portalreksadana.com plan, a community owned non-profit sites mutual fund investors.

"It's easy, just sign up to the site and enter the targets of long-term investment in my plan," said the initiator of the site, Adityo Hidayat.

According to Denny Thaher, DCA applications through investment programs in several banks potentially become the core of the mutual fund industry. So, when banks and others following MI? (redaksi@bisnis.co.id)