Choose Aggressive Investments Safely

By: Ridwan J Zachrie, Senior Advisor, Seven Stones Indonesia.

When I first started investing, I chose mutual funds and stocks, both for investment and trading. I did this because as a person who works in the financial sector, I feel that I can assess the potential profit that can be achieved by measuring the level of risk involved. This means I can invest safely.

When we invest in capital markets, it’s important to be aware of balancing aggressive investment targets and measurable risk management. We must also understand that losses can, and do, still occur.

There was a time when I experienced an investment loss, almost reaching 55-percent of the investment capital value. This was due to several factors, including unfavourable stock market conditions, but it’s worth noting that my risk analysis skills at the time were also was not that deep. It was a good lesson to learn and worth remembering that every failure can be the most effective teacher. Failures help us mature, giving us an even sharper early warning system in making decisions, such as when to invest aggressively and when to be careful. We have to consider many things before taking action. For example, looking at the fundamental side or the fair value of stocks, as well as looking at technical stock price conditions.

When price trends are rising and the stock price at that time is still lower than the fair value, my tip is to invest and buy. But when the trend is down, even though fair value has not been achieved, investors need to be alert. If the downward price trend is too strong, investors could suffer losses. We also need to understand that rising and falling price trends both provide good opportunities. What is riskier is the sideways price trend, because when price movements tend to be stagnant, they become very vulnerable to negative news, which in turn, can have an impact on falling stock prices.

Portfolio Basket

Another strategy we can use is to put investment funds into several portfolio baskets including mutual funds, stocks, gold trading and deposits.

We choose mutual funds because the benefits can be adjusted to the level of risk. In addition, investment managers who manage mutual funds will diversify risks.

Meanwhile, stocks can be instruments that provide the greatest returns compared to other instruments. Profits in shares can be in the form of capital gains and dividends.

I suggest investors can be more aggressive in utilizing shares, because the potential returns are high. Meanwhile, investors who tend to have a conservative and moderate risk profile can choose to invest in bonds. This instrument is more attractive, because a decrease in interest rates will cause bond yields to fall, so that bond prices will increase.

Even though the world has entered a period of economic recovery, investing in the stock market is still much more attractive than the bond market or money market. We can choose shares in sectors that are the government’s main focus and provide incentives, as well as shares that are still below their fair value due to the decline during the pandemic.

What is safe at this time, in my opinion, is perhaps that we continue to make short-term investments, while managing our portfolio by diversifying.

Ridwan J Zachrie is a Senior Advisor at Seven Stones Indonesia. He holds professional certification including Certified Business Valuer (CBV) issued by the Academy of Finance & Management, Australia and Brooker Dealer Representative (Wakil Perantara Pedagang Efek (WPPE), issued by Otoritas Jasa Keuangan (OJK) Indonesia/ Indonesian Authority for Financial Services. He was also awarded The Best Indonesian CFO in 2019.

Photo by Oren Elbaz on Unsplash

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Andrzej Barski

Director of Seven Stones Indonesia

Andrzej is Co-owner/ Founder and Director of Seven Stones Indonesia. He was born in the UK to Polish parents and has been living in Indonesia for more than 33-years. He is a skilled writer, trainer and marketer with a deep understanding of Indonesia and its many cultures after spending many years travelling across the archipelago from North Sumatra to Irian Jaya.

His experience covers Marketing, Branding, Advertising, Publishing, Real Estate and Training for 5-Star Hotels and Resorts in Bali and Jakarta, which has given him a passion for the customer experience. He’s a published author and a regular contributor to local and regional publications. His interests include conservation, eco-conscious initiatives, spirituality and motorcycles. Andrzej speaks English and Indonesian.

Terje H. Nilsen

Director of Seven Stones Indonesia

Terje is from Norway and has been living in Indonesia for over 20-years. He first came to Indonesia as a child and after earning his degree in Business Administration from the University of Agder in Norway, he moved to Indonesia in 1993, where he has worked in leading positions in education and the fitness/ wellness industries all over Indonesia including Jakarta, Banjarmasin, Medan and Bali.

He was Co-owner and CEO of the Paradise Property Group for 10-years and led the company to great success. He is now Co-owner/ Founder and Director of Seven Stones Indonesia offering market entry services for foreign investors, legal advice, sourcing of investments and in particular real estate investments. He has a soft spot for eco-friendly and socially sustainable projects and investments, while his personal business strengths are in property law, tourism trends, macroeconomics, Indonesian government and regulations. His personal interests are in sport, adventure, history and spiritual experiences.

Terje’s leadership, drive and knowledge are recognised across many industries and his unrivalled network of high level contacts in government and business spans the globe. He believes you do good and do well but always in that order. Terje speaks English, Indonesian and Norwegian.

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Ridwan Jasin Zachrie

CFO of Seven Stones Indonesia, Jakarta

Ridwan is one of Indonesia’s top executives with a long and illustrious career in the financial world. He holds several professional certifications including being a Certified Business Valuer (CBV) issued by the Australian Academy of Finance and Management; Broker-Dealer Representative (WPPE); and The Directorship Certification for Directors and Commissioners, issued by the Indonesian Institute of Commissioners and Directors.

His experience includes being the Managing Director at one of the top investment banking groups in the region, the Recapital Group, the CFO at State-owned enterprises in fishery industry and the CEO at Tanri Abeng & Son Holding. He’s also been an Independent Commissioner in several Financial Service companies and on the Audit and Risk Committee at Bank BTPN Tbk, Berau Coal Energy Tbk, Aetra Air Jakarta as well as working for Citibank, Bank Mandiri and HSBC. His last position was as CFO at PT Citra Putra Mandiri – OSO Group.

Ridwan has won a number of prestigious awards including the Best CFO Awards 2019 (Institute of Certified Management Accountant Australia-Indonesia); Asia Pacific Young Business Leader awarded by Asia 21 Network New York USA (Tokyo 2008); UK Alumni Business Awards 2008 awarded by the British Council; and The Most Inspiring Human Resources Practitioners’ version of Human Capital Magazine 2010.

He’s a member of the Board of Trustees of the Alumni Association of the Faculty of Law, Trisakti University, Co-Founder of the Paramadina Public Policy Institute and actively writes books, publications and articles in the mass media. He co-authored “Korupsi Mengorupsi Indonesia” in 2009, which helps those with an interest in understanding governance in Indonesia and the critical issue of corruption. Ridwan speaks Indonesian and English.

Per Fredrik Ecker

Managing Director of Seven Stones Indonesia, Jakarta

Per is the Managing Director of the Seven Stones Indonesia (SSI) Jakarta office and has more than 25-years’ experience in Indonesia, China, and Western Europe. He previously worked in senior management positions with Q-Free ASA, Siemens AG, and other companies in the telecom sector. Over the last six years, he has been the Chairman of the Indonesia-Norway Business Council (INBC) and recently become elected to be on the board of EuroCham Indonesia.

His most recent experience is within Intelligent Transport Solutions (ITS), Telecom, and other sectors within the Indonesian market. He is today through his position in SSI and by representing Norway Connect, promoting Nordic and European companies that would like to explore business opportunities in the Indonesian market. He’s also playing an active role to help create the Nordic House concept in Jakarta that will provide an excellent platform for Nordic companies entering Indonesia, where they’ll find a community that can offer support with trusted information and affordable services to enter this market.