Eco-Friendly Businesses Become the New Standard in the Business World

Industry Urged to Demonstrate Real Environmental Responsibility

Regional industrial players are encouraged to demonstrate a real commitment to environmental protection. This was conveyed in an activity initiated by the Pontianak Branch of Sucofindo in collaboration with the local Environmental Agency, related to strengthening companies' environmental performance.

Eco-Friendly Businesses Become the New Standard in the Business World

Head of the Environmental Agency, Adi Yani, emphasized the importance of environmental assessments as a strategic instrument, not merely administrative.

"The PROPER assessment is a concrete manifestation of concern for the ecosystem, especially the major rivers in West Kalimantan. With an area of 14 million hectares, more than 134 CPO mills, and hundreds of mining permits, collective efforts are needed to ensure the industrial sector does not negatively impact the environment," he said in an official statement on Thursday (July 31, 2025).

He also stated that Sucofindo plays a crucial role in assisting businesses in carrying out their environmental responsibilities, from monitoring emissions and water quality, to safe management of hazardous and toxic waste, to mitigating forest and land fires.

"Companies must demonstrate a real environmental commitment, not just comply with regulations. We want to see social and environmental responsibility that directly impacts communities and ecosystems. This isn't just about getting a green rating; it's about how companies can be part of the solution, and I'm confident PROPER can be the answer to this problem," he continued.

The Head of the Pontianak Sucofindo Branch, Ali Ridho, stated that this activity provides an open space for companies to evaluate and improve their environmental performance.

"In this case, Sucofindo is not only a verification partner, but also a technical and strategic partner towards sustainable business practices," he said.

He added that Sucofindo also provides various training courses, laboratory testing, and compliance audits to help companies build measurable environmental management systems.

"We are present as a strategic partner for the industry, encouraging companies not only to comply with regulations but also to create a positive and sustainable environmental impact," he said.

Ali hopes this activity will encourage industry readiness for the 2025 environmental assessment and strengthen their commitment to environmentally friendly business.

"We hope this activity can foster a spirit of sustainability and encourage industry players to become pioneers in realizing an environmentally friendly and competitive industry," he concluded.

Meanwhile, Sucofindo's Environmental Specialist, Muhammad Hasan, provided a technical presentation on strategies for fulfilling environmental documents and the importance of documents such as the Environmental Management Plan (RKL), Environmental Management Plan (RPL), SIMPEL, and DRKPL.

"The current PROPER approach assesses not only administrative compliance but also real innovation in environmental impact management. The quality of green documents is key to achieving a Green or Gold rating," he explained.

Sucofindo is also actively promoting industrial sustainability through its Green Generation services, ranging from carbon validation, automated monitoring, ESG consulting, and greenhouse gas emission inventory programs.

Read More

What's Health Insurance Like in the United States? Let's Find Out!

If you're planning a vacation or living in the United States (whether for work or study), there's one crucial thing you need to consider: health insurance.

Healthcare costs in America can be very expensive, especially if you don't have insurance. Everything from doctor visits to hospital visits to medications usually has to be covered out-of-pocket.

Well, with health insurance, while there are still costs to cover, they'll be much lower than without insurance.

So, while it's not free, insurance can significantly ease the burden of the exorbitant healthcare costs there.

Here, I'll explain more about the importance of having health insurance in America and what you need to know about it.

What's Health Insurance Like in the United States? Let's Find Out!

Comparing Healthcare Costs in America Without Insurance vs. With Insurance

Now, when we're talking about healthcare costs in America, there are several things that are very important for you to know, especially regarding the cost of the Emergency Room (ER) and several other healthcare services. So, let's discuss them one by one.

ER Costs Without Insurance

According to data from Better Care, ER costs in America can be very expensive, especially if you don't have insurance.

For non-life-threatening conditions, the average ER cost can reach between $1,500 and $3,000, or 25 million to 48 million rupiah (based on an exchange rate of 1 USD = 16,000 rupiah).

If the condition is more critical or urgent, ER costs can immediately skyrocket to over $20,000, or around 324 million rupiah. It's very expensive, right?

Emergency Room Costs With Insurance

Well, if you have insurance and have met your deductible (I'll explain this further later), your ER costs can be much lower.

According to data from Better Care, the average out-of-pocket cost for an ER with insurance is around $500, or around 8 million rupiah.

Of course, this cost can vary depending on your insurance type and your health condition, but it's definitely much more affordable than without insurance.

Uninsured Childbirth Costs

The cost of childbirth in America can also be surprising, especially if you don't have insurance. According to data from Wise, the cost of giving birth in a hospital without insurance can be very expensive.

For a vaginal delivery, the average cost is around $30,000, or almost 500 million rupiah, while a cesarean delivery can reach $50,000, or around 800 million rupiah.

Childbirth Costs With Insurance

If you have insurance, the cost of childbirth becomes much lower. Based on the same data, for both vaginal and cesarean deliveries, the average out-of-pocket cost after insurance is around $3,400 or around 55 million rupiah.

Of course, this cost can vary depending on the type of insurance and whether or not you meet the deductible.

Cost of an Urgent Care Clinic Visit Without Insurance

Visiting an urgent care clinic (a clinic that treats urgent but non-emergency medical conditions) can also be quite expensive without insurance.

According to data from GoodRX, the cost of an urgent care visit can range from $125 to $300 (2 million to 5 million rupiah), depending on the type of care needed.

Cost of an Urgent Care Clinic Visit With Insurance

Most health insurance plans in the United States cover urgent care visits. Typically, you only need to pay a copay, which averages around $75 (1.5 million rupiah) per visit.

But, again, these costs can vary depending on the type of treatment and condition, as some treatments and conditions are not covered by insurance.

Now you should understand the importance of having health insurance in the US. Next, I'll discuss in more depth other important things you should understand about health insurance in the US.

Things You Need to Know About Health Insurance in the United States

Before you choose or purchase a health insurance policy in the United States, there are several important things you need to know.

Because each insurance policy can be different, it's crucial to read and understand every detail (fine print) of the insurance policy you choose.

1. Terms Frequently Used by Insurance Providers

Health insurance in the United States uses specific terms that you should understand thoroughly, as this will give you an idea of what the insurance covers and how much out-of-pocket you should prepare.

Here are some of the main terms frequently used in health insurance in the United States.

I'll explain them in an easy-to-understand way, so you won't be confused later when reading your insurance policy. These aren't all the terms, just the most important ones:

– Deductible (Annual Out-of-Pocket Limit)

The deductible is the amount you must pay upfront before the insurance begins covering your medical expenses for a year.

For example, if your deductible is $500, you must pay up to $500 in out-of-pocket medical expenses before your insurance will cover further medical expenses.

However, the lower the deductible you choose, the more expensive your monthly premium will typically be.

It's also important to note that not all benefits are included in the deductible; the policy will usually state "not subject to deductible."

- Copay (Fixed Fee per Visit)

A copay is a fixed fee you pay for services covered by your insurance.

For example, if your copay is $20 for an urgent care visit, you only pay $20 when you visit the urgent care clinic.

The rest will be covered by your insurance, as long as the condition being treated is covered by the policy. If the condition or illness is not covered by your insurance, you will have to pay the full amount.

Coinsurance

Coinsurance is the co-payment you share with your insurance company after you've met your deductible, usually as a percentage.

For example, if your coinsurance is 20% and your total medical expenses are $100, you'll pay $20, and the remaining $80 will be covered by your insurance (as long as you've met your deductible).

However, if your deductible hasn't been met, even if you have coinsurance, you'll still have to pay the full cost of your medical expenses. So, if your deductible is $200 and your medical expenses are $100, you'll still have to pay the full cost, even if you have a 20% coinsurance.

- Allowed Amount or Maximum Coverage

This is the maximum amount your insurance company is willing to cover. For example, if your insurance has a maximum coverage of $50,000, but your medical expenses are $60,000, you'll have to pay the difference of $10,000.

When purchasing insurance, make sure you choose a maximum limit that suits your needs.

– Out-of-Pocket Limit

The out-of-pocket limit is the maximum amount you must pay before your insurance will cover your medical expenses, up to the maximum limit stated in your policy.

This only applies to conditions covered by the insurance and does not include your monthly premiums.

Some insurance companies also exclude copays, coinsurance, and deductibles from your out-of-pocket limit, so it's important to understand this so you know how much you'll likely incur in a year.

2. Not All Hospitals or Doctors Are Covered

In the United States, almost all health insurance plans have a list of healthcare providers (in-network or preferred providers).

This network includes various doctors, hospitals, pharmacies, specialists, urgent care clinics, and other healthcare institutions that have agreed to provide services at a lower cost to policyholders.

So, before you go to a doctor or hospital, it's important to research whether the doctor or hospital you're planning to visit is included in your insurance company's network.

Why? Because if you go to an out-of-network facility, the cost can be significantly higher.

In fact, if you're referred to another doctor or facility, and the referring doctor is already out-of-network, they'll likely recommend one that's also out-of-network, which will automatically increase the cost.

But this doesn't mean you can't go to an out-of-network facility. You can, but you'll just have to prepare extra funds.

Some insurance policies also offer out-of-network benefits, so check with your insurance company first. You can also ask the healthcare facility you're considering directly if they offer special discounts for patients.

3. Not All Illnesses Are Covered by Insurance

Health insurance in the US has different provisions regarding the illnesses or conditions they cover.

This is especially important to remember, especially if you have certain medical conditions. Some common exclusions in health insurance policies are:

Pre-existing conditions. Many policies don't cover medical conditions that existed before you were covered. For example, if you already had a certain condition before enrolling, treatment costs for that condition may not be covered.

Dental. Health insurance in the US generally doesn't cover dental care, such as routine dental visits or special procedures. Dental insurance can usually be added as an add-on, which can increase your monthly premium. However, dental emergencies are usually included in your insurance policy. Check with your insurance company to find out for sure.

Vision. Just like dental care, eye insurance is generally not covered unless you purchase it as supplemental insurance. The exception is emergencies, which are often already included in regular health insurance policies.

Mental Health. Treatment for mental health issues, such as depression or anxiety, is often not covered by regular health policies. If you feel this is important, make sure your policy covers mental health care, or you can also look for a plan specifically for mental health.

Extreme Sports or Activities. If you enjoy extreme activities like boxing, diving, paragliding, or rafting, be sure to read carefully about what is and is not covered, as some high-risk activities are not always covered.

4. Some Insurance Plans Have a Waiting Period

Some health insurance plans in the US have a waiting period before you can start using them. This is usually around 30-90 days after you sign up. However, this also depends on the type of insurance and the provider.

Always read the details of your policy. Don't be surprised if you suddenly need treatment, but find that you can't use it because there's still a waiting period.

Where Can You Get Health Insurance in the United States?

Getting health insurance in America depends largely on your purpose for coming there. Let's discuss each one.

1. For Students

Your university or school usually provides health insurance for international students before you arrive in America. However, if they don't, you can check out some international student insurance options on this website:

International Student Insurance

Student Health USA

2. For Employees

Most companies provide health insurance as part of their employee benefits, and the premiums are deducted from your paycheck.

However, if your company doesn't offer insurance, you can try finding one yourself. Here are some options:

Path2USA: Insurance for H1 Visas

Visa Guide: H1B Health Insurance

If you have lived in the US long enough and qualify as a resident alien for tax purposes (see the Substantial Presence Test for more details), you can purchase insurance from the Marketplace at:

Healthcare.gov

Note: The Marketplace is only open during the open enrollment period (early November to mid-January each year) unless you qualify for the Special Enrollment Period.

3. For Travelers

If you are visiting the US for vacation, you can choose travel insurance that covers health. One option is through this site:

VisitorsCoverage

Read More

Remove the Inhibitors! Here are 4 Ways to Overcome the Fear of Investing

 Fear of investing is one of the main reasons why many people don't invest. Fear of loss, fear of making a mistake, and even fear of not being able to manage their finances optimally are often the reasons why people don't invest at all.

However, with high inflation rates, the value of money sitting idle in accounts will continue to erode. Furthermore, when you see a large account balance, it's not uncommon for the urge to shop to arise, triggering wasteful spending that negatively impacts your financial health. Knowing this, you need to quickly find ways to overcome your fear of investing so you can quickly experience the financial benefits.

Remove the Inhibitors! Here are 4 Ways to Overcome the Fear of Investing

Don't worry, here are four ways to overcome your fear of investing to feel more confident and calm when investing to secure profits.

1. Ensure Your Financial Condition is Prime

Before you start investing, you need to ensure your financial condition is prime. What should you pay attention to? First, secure your finances by having an emergency fund of an ideal amount, for example, 6 to 12 monthly expenses, so that urgent needs can be met smoothly.

Next, evaluate your budget by cutting non-essential expenses to free up more of your budget for investment. Also, avoid debt or credit for non-productive purposes, and pay off any outstanding debt you may be carrying.

Equally important, prioritize your financial goals, both short-term and long-term, to be more interested in investing and pursue them optimally. You also need to protect your finances from unexpected problems with insurance.

Ideally, prioritize health and life insurance as mandatory protection priorities. Then, consider other insurance needs, such as property and vehicle insurance, if necessary. By ensuring your financial condition is secure and prime, you will find it easier to overcome your fear of investing.

2. The Best Time to Start Investing Is Now

Furthermore, one way to overcome your fear of investing is to realize that the best time to start is now. For those who don't know, investment profit opportunities can be more optimal if done over a long period of time, especially if you take advantage of the compounding effect by reinvesting the returns.

Over a long time horizon, such as 5 or 10 years, economic conditions tend to experience growth and companies are able to generate significant profits. These company profits can then increase their share prices and provide capital gains for investors.

If you're still hesitant about investing, start with a small amount and gradually build your portfolio. For example, you can start investing in mutual funds, which can be purchased with capital starting from just 10,000 rupiah. While learning, get used to investing and realize if there's growth in the value of the capital you've invested so far.

Also Read: Preparing to Become Well-off! Here are 6 Reasons Why the Younger Generation Must Be Investment Literate

3. Understand Your Risk Profile and Investment Goals

Many don't realize that all investors have different risk tolerances. Each investor's investment goals are certainly diverse and need to be tailored to their financial situation. With all these differences, investment strategies and instrument recommendations will also vary from individual to individual.

Knowing this, to overcome your fear of investing, you need to first identify your risk profile and desired goals. By understanding these two factors, you can more easily determine the best investment plan to achieve your financial goals and timeframe.

In general, investor risk profiles can be divided into three categories: conservative, moderate, and aggressive. Conservative investors tend to have a low risk tolerance and are advised to choose stable and safe instruments, such as deposits and money market mutual funds.

Meanwhile, moderate investors' risk tolerance typically falls in the middle spectrum, where they are more willing to take risks up to a certain point. For moderate investors, recommended investment instruments are bonds and fixed-income mutual funds, which have a moderate level of risk.

Aggressive investors, on the other hand, are willing to take investment risks to lock in higher potential returns, for example, in stocks and crypto. However, regarding risk profiles, investors need to evaluate periodically because risk tolerance can change over time depending on age and financial condition.

4. Align Your Investment Plan with Your Goals

After understanding your risk profile and desired goals, the next step in overcoming your fear of investing is to develop a plan. Of course, align your investment plan with your goals and risk profile to avoid stress and financial pressure while investing.

When in doubt, consult a professional to determine the best investment plan for you. This way, you can more easily overcome your investment fears and achieve your financial goals for a more prosperous future.

Don't Hinder Your Financial Dreams, Overcome Your Investment Fears Now!

Investing fears often hinder people from growing their capital and achieving their financial dreams in the future. However, these fears can be easily overcome by focusing on long-term goals and understanding your risk tolerance. So, don't let fear hinder you from building wealth through investing today by implementing the four methods explained above.

Read More

5 Differences Between Securities Companies and Investment Managers That Investors Must Understand

 When investors want to enter the Indonesian capital market, there are two institutions they must be familiar with: Securities Companies and Investment Managers. While both are tasked with helping investors navigate the investment world, they have distinct roles. The differences between these two institutions also significantly impact an investor's investment activities and must be tailored to their needs and objectives.

Unfortunately, the differences between Securities Companies and Investment Managers are often overlooked by investors, especially beginners. Knowing this, as a savvy investor, it's crucial to understand the differences between Securities Companies and Investment Managers.

For a more detailed explanation of the five differences between Securities Companies and Investment Managers, please read the explanation below.

5 Differences Between Securities Companies and Investment Managers That Investors Must Understand

Definition and Types of Services

Based on their definitions, securities companies and investment managers have easily discernible differences. A securities company is defined as a securities intermediary, carrying out the activities of a securities underwriter (PEE), and a securities broker (PPE).

The services provided by a securities company, also known as a broker, include acting as an intermediary between investors and the stock issuing company to facilitate the buying and selling of securities. Securities companies also offer recommendations on stock options that meet the needs of their clients.

An investment manager, meanwhile, is a company responsible for managing funds collected from a group of investors in mutual fund portfolios or specific collectively managed funds. In other words, an investment manager is better known as a company that manages mutual fund products that investors can purchase according to their investment needs and objectives.

Investment managers typically operate under the auspices of a securities company, providing services under a separate legal entity or as a subsidiary. However, some investment managers operate independently.

Required Business Licenses

As institutions with a more comprehensive and extensive service capacity, Securities Companies hold more business licenses than Investment Managers. To become a Securities Company, the required licenses from the Financial Services Authority (OJK) cover Securities Brokerage (PPE), Securities Underwriter (Underwriter), and Investment Manager. These licenses are mandatory for Securities Companies to conduct their respective business activities.

For Investment Managers, however, the only business license required is for Investment Managers, with the primary focus being the management of mutual fund portfolios or collectively managed funds from a group of investors.

Scope of Activities

Depending on their business licenses, securities companies can operate in three main business areas, including:

Broker Dealer

Alternatively known as a Securities Trading Intermediary (PPE), one of the primary activities of a securities company is as a broker-dealer. The role of a broker-dealer (PPE) is to carry out the buying and selling of securities for their own benefit or that of others.

Investors wishing to purchase shares, whether in the primary or secondary market, are required to have a stock account with an official securities company that holds a PPE permit from the Financial Services Authority.

With a PPE permit, securities companies can also carry out stock or bond trading activities, whether processed on the Indonesia Stock Exchange (IDX) or through over-the-counter (OTC) transactions.

Underwriter

An underwriter is also known as a securities underwriter (PEE). As an underwriter, securities companies offer assistance to prospective issuers or public companies in conducting Initial Public Offerings (IPOs).

This underwriting role can be accompanied by an obligation to purchase unsold or unsold securities. Therefore, if there is an obligation to purchase the remaining unsold securities, the issuer can be assured of obtaining funding in accordance with expected requirements.

Investment Manager

As previously explained, an Investment Manager is a company licensed by the Financial Services Authority (OJK) to operate as an Investment Manager. For most investors, an Investment Manager is better known as a service or company that manages mutual fund portfolios from funds pooled from a group of investors. The Investment Manager's activities include managing investor or client securities portfolios according to individual and bilateral management contracts, and do not involve direct securities trading activities like a Securities Company.

A Securities Company can have one, two, or all three of the above scopes of activity, depending on its license.

Fund Management Structure

At a Securities Company, the fund management structure begins with investors opening a stock account or Customer Fund Account (RDN). This account is mandatory for investors who wish to buy and sell shares through the services of the relevant Securities Company.

With an Investment Manager, investor funds are collected through a special mutual fund product and then held in a separate Custodian Bank. The collected funds are then managed by a professional team, optimally aligning with the agreement and type of mutual fund.

For additional information, investors wishing to purchase mutual funds can visit a bank with Mutual Fund Selling Agent (APERD) status and apply for a purchase through a Mutual Fund Selling Agent Representative (WAPERD).

Profession and Certification

The difference between a Securities Company and an Investment Manager lies in the profession and certification required. Securities Companies employ Securities Broker-Dealer Representatives (WPPE) or Securities Underwriter Representatives (WPPE), who are required to obtain official licenses from the Financial Services Authority (OJK).

Meanwhile, professional Investment Managers must be certified as a WMI (Investment Manager Representative) or Investment Manager Representative to be able to manage funds obtained from the OJK.

Understand the Difference Between Securities Companies and Investment Managers to Understand Their Functions

Although both act as intermediaries for investors seeking to invest, Securities Companies and Investment Managers actually have different functions. By understanding the differences, investors can more wisely consider which service is best for their investment needs.

Read More

Active Mutual Funds vs. Passive Mutual Funds: What's the Difference?

 For novice investors, mutual funds are a practical investment instrument that can help them achieve their financial goals because they are managed by professional investment managers. However, when interested in investing in this product, investors need to match their chosen mutual fund type to their needs and financial goals.

For example, compare investing in active mutual funds versus passive mutual funds. As their names suggest, these two types of mutual funds differ in terms of their management strategies, whether active or passive.

Active Mutual Funds vs. Passive Mutual Funds: What's the Difference?

Compared, both active and passive mutual funds can be ideal choices depending on the investor's needs. To understand the differences between active and passive mutual funds, from their definitions, portfolio management, and objectives, see the following explanation.

Definition

As the name suggests, an active mutual fund (or active RD) is a type of mutual fund product where the investment portfolio is actively managed by the Investment Manager. This means that the Investment Manager continuously conducts analysis to optimally purchase or sell investment instruments. This active management is carried out with the goal of outperforming the returns or performance of a benchmark index.

Meanwhile, a passive mutual fund (or passive RD) is a type of mutual fund product where the portfolio management simply follows or mimics the performance of a benchmark index. For example, the Investment Manager of a passive mutual fund will only manage investor capital in a portfolio that tracks the Jakarta Composite Index, LQ45, or other indexes. Therefore, the Investment Manager does not need to conduct analysis to determine the best investment instruments and simply mimics the composition of the target index.

Some examples of passive RDs are ETFs (Exchange Traded Funds) and index funds.

Differences in Portfolio Management

As previously explained, active and passive mutual funds also differ in terms of portfolio management. In active mutual funds, the Investment Manager actively manages the portfolio with selected investment instruments to achieve returns that exceed the performance of the benchmark index. This active management is based on market analysis and in-depth research.

In passive mutual funds, the portfolio is simply structured to align with the composition of a predetermined benchmark index. Therefore, Investment Manager intervention is minimal and only requires adjusting the contents of the mutual fund portfolio to the target index.

Differences Based on Investment Objectives

By actively managing funds, active mutual funds aim to achieve higher returns than the benchmark index. In passive mutual funds, the investment objective is not to maximize profits. Rather, the Investment Manager strives to achieve performance that is as similar as possible to the benchmark index.

Management Fees

Because active management involves a greater number of transactions, management fees, or expenses, are generally higher for active mutual funds than for passive mutual funds. These management fees can significantly reduce potential investor returns, although the amount may not be noticeable.

Potential Profit

Although management fees tend to be higher, active management in active mutual funds (RDAs) has the potential to yield greater profits depending on the Investment Manager's skills and performance. This is especially true if the Investment Manager's analysis is on target and the portfolio's performance significantly exceeds that of the benchmark index.

On the other hand, because they merely match the performance of the benchmark index, passive RDs tend to offer more limited profit potential. However, while they don't aim to outperform the benchmark index, the potential profit from this type of mutual fund is generally stable and easy to predict.

Risk of Loss

In terms of risk of loss, active RDs are considered to have a higher level of risk. This is due to the possibility that the Investment Manager's decisions may not always yield the expected results, especially during volatile capital market conditions that are difficult to predict due to varying sentiments.

Passive RDs, on the other hand, tend to have more predictable risks because large or significant changes in portfolio management are rare.

Transparency of Investment Decisions

The final difference between active and passive mutual funds can be seen in the transparency of investment decisions made by the Investment Manager. In active mutual funds, the Investment Manager's investment decisions are arguably less transparent. This is because decisions to change the investment portfolio in this type of mutual fund can be made quickly to adjust the Investment Manager's strategy and analysis.

In contrast, in passive mutual funds, investment decisions are more transparent and easier for investors to monitor. This is because portfolio management follows the composition of the benchmark index, which is generally open to the public.

So, Should You Invest in Active or Passive Mutual Funds?

After understanding the explanation of active and passive mutual funds, you should have an idea of which product is better suited to your needs and investment goals. If you are looking for high potential returns and are willing to take risks, active mutual funds are ideally the more appropriate choice. Conversely, passive mutual funds tend to be more suitable for investors who prioritize consistent performance, lower risk, and the absence of higher transaction costs.

Read More

Short-Term vs. Long-Term Bonds: Which is the Best Choice?

When interested in investing in bonds, some people may be confused about choosing between long-term and short-term bonds. Both types of bonds are inherently attractive and worthy choices for investors. However, considering the risks and their suitability to financial goals, investors need to carefully consider the product to avoid making the wrong choice.

As the name suggests, short-term and long-term bonds differ in terms of the tenor, or maturity date, they offer to investors. Of course, to make the right choice, investors need to align the characteristics of the bond with their investment needs, financial situation, and goals.

Short-Term vs. Long-Term Bonds: Which is the Best Choice?

So, if you want to know which is the best choice between short-term and long-term bonds, the following explanation is essential.

Reasons to Choose Short-Term Bonds

Based on their characteristics, there are several reasons why investors should choose short-term bonds, including:

They have short-term financial goals, or goals of less than three years, for example, a down payment on a house or wedding expenses.

They are unsure about long-term market conditions and fluctuations.

They want a safe and easy-to-cash investment.

An example of a short-term bond product that investors can choose is the Retail Savings Bond or SBR. SBR offers the potential for stable profits or returns with a low level of risk. This type of bond can also be redeemed earlier before maturity through the early redemption feature, depending on the investor's needs and desires.

Reasons for Choosing Long-Term Bonds

Meanwhile, investors choose long-term bonds for the following reasons:

They have long-term financial goals, or goals exceeding five years, for example, inheritance, retirement funds, and children's education expenses.

They desire financial freedom in the future.

They are prepared to face market fluctuations.

Examples of long-term bond products that investors can choose are Retail Government Bonds (ORI) and Savings Sukuk, which have tenors of five to ten years. With a longer term, these types of bonds generally offer higher coupon yields and are ideal for holding to maturity.

Comparison of Profits and Risks of Short-Term vs. Long-Term Bonds

Straightforward, both short-term and long-term bonds have their own potential profits and risks. Investors who choose short-term bonds can benefit from the potential for more stable returns. Investors can also feel more secure in facing interest rate risk when choosing short-term bonds because their prices are less sensitive to changes in Bank Indonesia's benchmark interest rate.

On the other hand, the advantage of investing in long-term bonds is the opportunity for investors to earn higher returns. However, if these bonds are sold prematurely before maturity, investors could experience losses due to price fluctuations in the secondary market due to changes in the benchmark interest rate.

In other words, the risks and returns of this investment are closely related to the length of the bond's term. The longer the bond's maturity, the higher the potential profits and risks. This is certainly something investors should consider when choosing the type of bond they need and their investment goals.

Short-Term and Long-Term Bond Investment Strategy

As explained previously, short-term and long-term bonds have their own advantages and disadvantages. So, what investment strategy can you use to take advantage of the advantages of each product?

It's simple; you can implement an investment strategy called laddering. With a laddering strategy, you purchase bonds with different durations or tenors, for example, 2 years, 5 years, and 10 years. Each time a bond matures, reinvest the yield and principal into a new bond with the same tenor.

With this strategy, you can enjoy the attractive returns of long-term bonds and the liquidity of short-term bonds.

Understand Your Needs and Risk Profile to Know Which Product to Choose

That explains the difference between short-term and long-term bonds, which can help you decide which product is best for you. Essentially, short-term bonds offer investors security and flexible liquidity, while long-term bonds offer optimal profit potential. So, don't forget to tailor your bond choices to your needs, financial goals, and risk profile to maximize your returns.

Read More

To Avoid Mistakes, Let's Check Out 8 Differences Between Stocks and Mutual Funds Before Choosing

 Many investors recommend stocks and mutual funds as their investment instruments of choice. This is not without reason; both investment instruments offer attractive profit potential and are suitable for investors' goals and needs.

However, many investors remain confused about the difference between stock and mutual fund investments. However, the differences between stocks and mutual funds are significant and can impact your investment performance. If you make the wrong choice, your investment plans could be disrupted and not yield optimal results.

To Avoid Mistakes, Let's Check Out 8 Differences Between Stocks and Mutual Funds Before Choosing

Therefore, to avoid this, consider the following eight differences between stocks and mutual funds to more easily compare the qualities of the two.

1. The Party Selling the Product

One of the main differences between stocks and mutual funds is the party offering the product. If you want to buy a mutual fund, the party you need to go to is an APERD, or Mutual Fund Selling Agent.

As for stocks, you can buy them directly through the stock exchange or certain financial institutions. Fortunately, thanks to advances in digital technology, there are now many online investment platforms that offer stocks and mutual funds. This makes it more practical and easy to purchase these investment instruments through these online investment platforms.

2. Objects Purchased by Investors

When looking at the objects purchased by investors, the difference between stocks and mutual funds is quite easy to understand. A mutual fund is a pool of investment assets managed by an Investment Manager from many investors. So, when you buy a mutual fund, you invest capital in a number of specific instruments, such as bonds, stocks, deposits, debentures, and so on.

On the other hand, shares refer to ownership of a company or asset. In other words, buying shares is the same as buying a portion of the company's ownership. Company profits can also be distributed to stock investors in the form of dividends, and there is the potential for capital gains.

3. How to Purchase Assets

The difference between stocks and other mutual funds is evident in the asset purchase process. In general, the process of purchasing mutual funds is relatively more complex than that of stocks. When purchasing a mutual fund, investors are connected to an Investment Manager and a Custodian Bank, and the investor's funds are managed to purchase specific types of assets.

With stocks, investors simply need to place a buy order with the stock exchange or a third party. The transaction is then completed quickly, and the shares become the investor's property.

4. Involved Parties

Generally, the parties involved in mutual fund investment activities are the Investment Manager, the issuer, the Custodian Bank, and so on. Meanwhile, in stock investments, the involved parties are the issuer or company, the shares, KSEI (Indonesian Central Securities Depository), securities companies, brokerage firms, and so on. However, when investing in either stocks or mutual funds, investors don't always have to deal with each of these parties actively or directly.

5. Stability of Investment Fluctuations

In terms of price fluctuation stability, stocks and mutual funds have quite simple differences. Stocks, known as high-risk investment instruments, tend to experience higher price fluctuations than mutual funds. However, the potential returns provided by these products are also quite promising and suitable for long-term investment.

As for mutual funds, many consider them an ideal choice for conservative or risk-averse investors. Not only are the risks relatively lower, but mutual fund investments are also much easier than stocks because they are managed by an Investment Manager. Therefore, the responsibility for mutual fund performance generally rests with the Investment Manager, while stocks are entirely in the hands of the investor.

6. Fund Management Method

There are significant differences between stock and mutual fund fund management. Mutual fund management is carried out by Investment Managers who have proven competence and are certified in managing their clients' funds. Therefore, mutual fund investors do not need to actively manage their investment funds and simply wait for reports from the Investment Manager and receive their returns.

On the other hand, when investing in stocks, you are fully responsible for managing your funds. Therefore, an understanding of investment knowledge and strategies is essential to maximize potential profits and minimize the risk of loss when investing in stocks.

7. Amount of Initial Capital Required

Furthermore, the difference between stocks and mutual funds can be seen in the amount of initial capital required for investment. As products that pool funds from multiple investors, mutual fund investments can be started with affordable capital. In fact, some mutual fund services offer investment options in their products with capital starting from just 10,000 Rupiah.

This differs from stocks, where the initial purchase capital is relatively large. Investors may even need to set aside millions of rupiah to purchase their desired stocks. Therefore, stocks are more suitable for experienced investors with substantial capital and a strong understanding of investing.

8. Taxation Regulations

Finally, the difference between stocks and mutual funds relates to their taxation regulations. With mutual funds, investors are generally not subject to tax. If tax is imposed, mutual fund taxes are much lower than those imposed on stocks. However, mutual fund investors are still required to file annual tax returns, including the amount of assets and investment profits earned.

So, Is It Better to Invest in Stocks or Mutual Funds?

From the explanation of the differences between stocks and mutual funds above, both investment instruments have characteristics that need to be tailored to the investor's needs. The high risk of stocks makes them more suitable for aggressive investors with long-term financial goals. Meanwhile, mutual funds offer flexibility in management and risk management, making them suitable for beginner investors with a low risk tolerance.

Read More

Understanding the Secondary Market, a Type of Capital Market for Investors to Trade Securities with One Another

 When delving into the world of investment, you're likely familiar with the term capital market. The capital market is a place where governments and companies can raise funds from investors by offering securities to the public. The capital market itself can be divided into two categories: the primary market and the secondary market.

Understanding the Secondary Market, a Type of Capital Market for Investors to Trade Securities with One Another

The primary market can be understood as the type of capital market where securities or securities are first traded to the public before being listed on the Stock Exchange. But what about securities that have passed the offering phase on the primary market? The answer is that these securities can be traded on the secondary market directly between investors.

Of course, securities transactions conducted on the secondary market require a specific process that is important for investors to understand. To further understand what the secondary market is, the transaction process, and examples, see the following guide.

Understanding the Secondary Market

As explained briefly earlier, the secondary market is a type of capital market that is a continuation of the primary market. In the secondary market, securities already listed on the Stock Exchange are traded between investors. In other words, through the secondary market, investors can buy and sell securities already listed on the exchange after an Initial Public Offering (IPO) has taken place.

In the secondary market, securities are bought and sold directly by investors. Of course, depending on the level of supply and demand, stock or security prices on the secondary market are constantly changing and fluctuating. If demand is high and supply is low, stock prices will inevitably increase, and vice versa.

Therefore, to achieve promising profits or returns, you as an investor must be able to identify stocks with the potential to increase in value in the future. This way, you can buy shares at a low price and resell them at a high price to achieve capital gains.

To do this successfully, you need to understand the several factors that influence supply and demand in the secondary market. From specific factors to macroeconomic factors, all factors can influence stock price fluctuations in the secondary market.

For example, a specific factor influencing supply and demand is company or industry performance. Examples of macroeconomic factors include interest rates, currency exchange rates, inflation rates, political and social conditions, and others.

Furthermore, understand that every transaction made by investors in the secondary market will incur transaction fees, such as PPE commissions at securities companies. These commissions are subject to VAT of 10 percent of the transaction amount and are charged to the investor. However, for stock sales orders, the tax levied on investors is 0.1 percent.

Transaction Flow in the Secondary Market

Referring to the explanation from the Financial Services Authority (OJK), the following is the procedure or transaction flow in the secondary market.

Transactions in the secondary market take place on the Stock Exchange via an intermediary, a Securities Company, as an exchange member.

Investors who wish to purchase shares on the secondary market must place a purchase order through the Securities Company. This purchase order specifies the shares to be purchased, the purchase amount, in lots, and the purchase price.

If investors wish to sell, they must place a sell order through the Securities Company. This sell order specifies the shares to be sold, the sale amount, in lots, and the sale price.

Every order placed by an investor is displayed on the Stock Exchange's trading system and can be viewed through the Securities Company's trading system.

Examples of Securities Transactions in the Secondary Market

When a buy order placed by an investor matches a sell order in the stock exchange transaction system, the transaction has occurred and gone through a process known as matching. The asset transfer and payment will then be facilitated by KPEI (Indonesian Securities Clearing and Guarantee Corporation) and KSEI (Indonesian Central Securities Depository).

For the purchase process, investors are required to deposit funds in the nominal amount of the purchase, no later than two business days after the transaction. For the sale process, investors will receive payment no later than two business days after the transaction. However, it's important to understand that all capital market activity is suspended during holidays, so transactions may take longer to complete.

Understand How the Secondary Market Works to Stay Confident When Entering the World of Investment

For every investor, understanding how the secondary market works is essential. This will allow you, as an investor, to invest more smoothly in accordance with your plans and goals. Hopefully, the explanation above helps you understand the secondary market and the transaction flow within it when investing.

Read More

Understanding the Primary Market: A Type of Market for Public Investors to Buy Promising Securities at an IPO

When you dive into the world of stock investing, you may have only purchased securities that have been issued for a long time on the secondary market. The value of these securities generally fluctuates depending on the performance of the issuing company and the interest of investors.

However, did you know that there is a type of market that trades securities that have just been launched to the public for the first time? This type of market is known as the primary market, and it is an important capital market category for stock investors to understand. Securities traded to the public for the first time, known as an initial public offering (IPO), often have promising profit potential.

Understanding the Primary Market: A Type of Market for Public Investors to Buy Promising Securities at an IPO

To understand more about the primary market, its transaction flow, and examples, see the following explanation.

Understanding the Primary Market

According to the Financial Services Authority (OJK), the primary market is a type of capital market where securities or effects are first traded to investors before being listed on the Stock Exchange. The offering period for shares on the primary market is when securities or effects are offered to investors by an Underwriter via a Broker Dealer or Securities Trading Intermediary as the securities selling agent. This process is commonly known as an IPO, or Initial Public Offering.

When offered on the primary market, shares have a fixed price because the company has determined the quantity and price before offering them to investors. Because of this fixed quantity, not all investors will be able to obtain the shares offered on the primary market that they desire.

It's important to understand that investor demand for shares offered on the primary market may not be met when there is oversubscription or excess demand. For example, suppose the initial issue of 100 million shares on the primary market is for a total of 150 million shares, while investor demand for those shares reaches 50 million shares.

In this situation, there is an excess demand for shares of 50 million shares. So, once the shares have been issued, some investors don't receive the desired number of shares they ordered. Naturally, the company will return or refund the excess funds to the investor in full.

Transaction Flow in the Primary Market

Unlike the secondary market, shares traded on the primary market must go through a specific transaction flow that is important for both the issuing company and investors to understand. For further clarity, the transaction flow on the primary market is outlined below.

Investors complete a Share Purchase Order Form (FPPS) and deposit funds into a Customer Fund Account (RDN) at the securities company.

Investors must then submit the FPPS, along with proof of deposit and personal identification information.

The securities company that has received the FPPS will submit it to the underwriter, who will then forward it to the Securities Administration Bureau (BAE) to obtain the share allocation.

When conducting an IPO on the primary market, the company is required to disclose the offering price, quantity, offering period, and various other important information. This announcement can be made through national newspapers, the company's official website, or in the form of a prospectus.

Examples of Securities Transactions in the Primary Market

To better understand the primary market, you can consider the following examples of securities transactions in that market.

Assume Company A conducts an IPO in 2024. The company is known as a leader in its industry and has promising appeal among investors. Because expectations for the company's initial offering are high, many investors believe its stock price will skyrocket rapidly in the secondary market.

With such high interest, Company A's stock offering in the primary market is a resounding success and is completely purchased by investors. If oversubscribed, the company can issue refunds or issue additional shares to meet market demand.

On the other hand, if the stock offering in the primary market falls short of expectations and attracts insufficient interest, the situation is called undersubscription. This occurs when a company's stock offering in the primary market fails to meet its target. In this situation, the company can still obtain the funding it needs because the remaining unsold shares will be purchased by the underwriter.

Buying Shares on the Primary Market Has a Special Appeal for Investors

That explains the primary market and its transaction process. Offering shares to the public for the first time, buying shares on the primary market has a special appeal for investors because it offers the potential for promising capital gains when the shares are listed on the stock exchange. However, it's important to also consider the profile and potential of the issuing company to lock in returns from the securities offered on the primary market when investing.

Read More

What Does Issuer Mean? Here Are Its Functions and Roles in the Investment World

 When investing, you'll likely encounter the term "issuer" frequently. Yes, "issuer" is an important term for investors and capital market players to understand because it relates to the party issuing a particular investment instrument. However, many capital market players remain confused about the meaning of this term.

In fact, some investors don't fully understand the role and function of issuers in the investment world. To learn more about what an issuer means, its functions, and the securities it transacts, see the following guide.

What Does Issuer Mean? Here Are Its Functions and Roles in the Investment World

Definition of Issuer

Quoting from the Financial Services Authority (OJK), an issuer is the term for the party carrying out the public offering process. A public offering conducted by an issuer is an offer of securities sold to the investing public in accordance with statutory procedures.

Another definition of an issuer is an individual, company, corporation, or group of organizations offering securities or debt instruments. Issuers can also offer securities in the form of commercial paper, bonds, shares, debt instruments, Collective Investment Contracts (KIK), derivative securities, and so on.

Issuers also offer Sharia-compliant securities, namely sukuk, whose issuance method must comply with Sharia principles in the capital market. Issuers typically offer securities via the capital market, including bonds, sukuk, and shares.

According to the Big Indonesian Dictionary (KBBI), an issuer is a business entity that issues securities for trading. Therefore, it can be concluded that an issuer is a company whose shares are traded on the capital market.

Differences Between Issuers and Public Companies

According to the Indonesian Dictionary (KBBI), a company can be considered an issuer if it has conducted an IPO, or Initial Public Offering. This means the issuer has offered shares to the public, which can be traded by investors on the capital market. However, there are still several differences between issuers and public companies.

Returning to the OJK's explanation, a public company is a Limited Liability Company (PT) in accordance with Article 1 number 1 of the General Provisions of Law No. 40 of 2007 concerning Limited Liability Companies. A PT has shares held by at least 300 investors and has a minimum paid-up capital of 3 billion rupiah.

Meanwhile, issuers are required to submit a Registration Statement during the public offering process, and public companies must submit a registration statement to become a public company. Regarding this registration statement, the OJK issues an effective statement as an indicator of the completeness and fulfillment of all registration statement requirements and procedures, a mandatory step in accordance with applicable laws.

Therefore, the significant difference between an issuer and a public company is that the issuer is the party currently undergoing the IPO process. Meanwhile, a public company is a Limited Liability Company or PT that has carried out the IPO process.

The Function of Issuers in the Investment World

After understanding what an issuer is, you also need to understand the function and role of issuers in the investment world or capital markets. In general, issuers play a role in providing opportunities for companies and business owners to obtain funding or additional capital.

The presence of issuers can also open up opportunities for investors to invest. Thus, investors can improve their financial condition by investing in securities issued by issuers.

Furthermore, the primary function of issuers is to offer securities to the public. They are also responsible for managing public capital optimally by providing evidence of their accountability through the issuer's quarterly financial reports.

By offering their shares to the public, investors or those who purchase shares will acquire a portion of ownership in the company in question. This also opens up the opportunity for investors to receive dividends.

Furthermore, issuers also have several specific objectives related to issuance, which are generally determined at the GMS (General Meeting of Shareholders), including:

Expanding business opportunities because capital obtained from investors can be used for business expansion, market coverage, or increasing production capacity.

Transferring shareholders from existing investors to new ones.

Improving the funding or capital structure, namely by balancing equity and foreign capital.

Understand the Meaning of Issuer to Understand the Types of Investment Products They Issue

That explains what an issuer is, as a company or party that issues certain investment securities. By understanding the meaning of issuer, you'll be much more informed about the types of investment products they issue. Depending on your needs, you'll be able to consider the best type of product to maximize your investment returns.

Read More