Telluride Market News

Impact of the global financial crisis were increasingly felt in the financial system in the country. But fear not, please continue to invest. However, the rational action is required. Do not forget to also understand the characteristics of the product to be utilized.

Bank Indonesia gives special tips in addressing the global financial conditions. The main one is to consider the risks that are not only appear on the product itself, but also external risk given the financial system of a country which no longer stand alone but is integrated with financial systems of other countries globally.

Here are tips to consider potential investors:

Risk Investing

1. Inherent risk (inherent risk)
Every product offered by banks, including Islamic banking products, have advantages and limitations of each. These products promise results in addition to certain advantages, it also contains inherent risks, so it is necessary to understand the characteristics of the product before use.

Please note, not all products offered by banks pure bank products. The product is pure banking, for example, savings, current accounts, deposits, krefit and sharia financing. While mutual funds and bancassurance products are an investment and insurance products issued by other financial institutions and marketed through the bank as a sales agent (selling agent). As a sales agent, the bank is not responsible ata skinerja rensadana and bancassurance products are.

Risks inherent pda savings, current accounts, deposits, for example, the possibility of withdrawal or disbursement difficulties if there are problems at the bank where the deposit funds.

Risks inherent in other products such as mutual funds, for example reduction of Net Asset Value (NAV)-based mutual fund shares because of the decline in the price of the stock portfolios for mutual funds.

2. External Risk
Apart from the inherent risks, each product also has influenced the risk of external economic conditions domestically and abroad, as well as the psychological condition of society. External risks, among others, can be derived from:

- The movement of stock price index
- The movement of currency exchange rates
- The movement of interest rates
- The financial crisis in other countries
- The level of public confidence in the financial condition
- The level of public confidence in political stability
- Rumors are growing

Derivative transactions requiring expertise. This transaction can only be done client who understands the true risk will be experienced. Unfortunately, Bank Indonesia has no criteria for this question.

According to the Economist of Bank Rakyat Indonesia Djoko Retnadi, derivative transactions are usually done between two parties, or bilateral. It causes no supervision or oversight. For that for which derivative transactions must understand the risks and benefits to be in the can.

“If you want to go to learn it first, if you need to have financial experts from banking,” he said in Jakarta on Monday, March 23, 2009.

In such transactions is not true if the position of the bank is higher (superior) than the customer, because they both agree on the agreement / contract. So far, the bank would be superior because the bank will not allow to have an open contract positions or loss would be greater than the number of transactions. “The position of the bank is not superior, equal to the initial position,” he said.

Therefore in case of default could have taken a variety of ways, depending on the agreement. Banks can change the customer in the form of credit losses. This is better than no solution at all if the customer fails to make payment. Banks could also make an agreement under hand for the completion of derivative transactions.

“It’s commonly called uncommited credit facility, is to anticipate if the customer fails to pay. This is important because if not be recorded as non-performing loans,” he said.

In the settlement of derivative transactions or restructuring, said Djoko high integrity is required. Because in terms of derivatives transactions, usually if you have a profit, which enjoy the advantages not say anything, but if it suffers losses scream.

Many insurance products offered. But be careful, not every product fits your needs. “Must see products,” said Chairman of the Insurance Council of Indonesia, Cornelius Simanjuntak to VIVAnews.com, Thursday, July 14, 2011.

According to him, the consumer must be keen to see the product, must not buy. Because, life insurance consists of several products. Each type has different benefits, in order to serve a variety of customer needs and capabilities.

Not only that, Corlelius suggested that prospective clients see the track record of insurance companies. “Does the insurance company was registered at the Ministry of Finance or not,” said Cornelius.

If any insurance product is different, then what other types of insurance products? The following types of insurance under the Life Insurance Association of Indonesia  in the official website:

1. Term life insurance (Term)
Characteristic of this lies in the maximum protection with a relatively low premiums. Therefore, this type of product attractive to the prospective insured who have large insurance needs, but their purchasing power is limited.

Who fits with this policy?
- Prospective policyholders who want to protect the future of their children.
- Candidate new policyholders career.

2. Lifetime life insurance (Whole Life)
Characteristic of this insurance is the basic type of permanent life insurance provides lifetime insurance protection.

Who fits with this product?
- Prospective policyholders who want to have the protection of the soul as well as generating savings fund that can be used for emergency needs.
- Prospective policyholders who need permanent income protection (hospital bill).
- Prospective policyholders who want to get some capital growth investment.

3. Endowment life insurance (Endowment)
Characteristic of this insurance is protection that gives the amount of insurance money when the insured dies within a specified period, and provide the entire sum insured if he was still alive at the end of the coverage.

Because it provides two benefits, the insurance is called the endowment or unit-linked. This product is useful for prospective policyholders who want to be protected from the financial impact due to premature death.

Who fits with this product?
- Candidates for policyholders who require funds for children’s education.
- Prospective policyholders who want to have some funds for future needs.
- Prospective policyholders who want to have a pension fund.

Insurance is divided into two types, single unit-linked life insurance (single premium) and regular unit-linked life insurance (regular premium). Characteristic of single premium insurance premium is paid at once. Usually this insurance premiums for policyholders who want to invest long term.

Meanwhile, typical of regular premium insurance is a long-term investment that the policy is set periodically. Policyholders are usually people who choose the investment yet remain protected.

Want to develop the business? You’ll need a capital. There are many sources of funds that you can get. As of close friends, parents, cooperative, or a bank.

But that needs to be remembered, certainly no requirement that always accompanies it. Well, if you want to borrow capital from banks, these tips from the Head of Small Business Development Bank Negara Indonesia Sari Ayu Wulandari.

He said the bank will assess compliance with the principle of 5 C, the character (the character), capital (capital), collateral (security), capacity (the capacity of business), and condition (business conditions).

For the character, the things seen include a commitment that was built, business records such as suppliers, customers, and the history of banking. The bank will see if your business has a history of troubled loans or not.

From the capital side, the bank saw the capital needed for business. Ayu said, the bank can not provide 100 percent financing to businesses that make capital. “There should be self-financing (own capital), whether it comes from paid-in capital or accumulated profits into capital,” said Ayu.

This capital include the composition of its holdings that anyone, who the dominant currency, and who the caretaker capital. This is important, because by knowing who is in control of this capital, the bank will know how to run a business continuity in the future.

Against this capital loans, Ayu said, the capacity of the proposed venture is also a contributing factor. Bank among others will see the results of sales, cost structure, cash flow, the velocity of bills and expenses to income.

“Banks lend capital, meaning the bank is generally also wanted the sustainability of return on that capital,” he said. In the preparation of proposals, the capacity of this proposed business is very important status.

For business conditions usually seen is the licensing. “Micro businesses generally, this will be from the village or subdistrict,” he said.

To guarantee what could be guaranteed, Ayu said, there are two types of collateral that can be used as collateral, ie, the intangible such as equipment, machinery, vehicles, buildings, or land.

As for the assurance that the intangibles such as personal guarantees or warranties given companies such as credit insurance

Before utilizing the product being offered the bank, it helps to understand the risks that may arise and to know how to reduce those risks.

The Government has provided a means to reduce the risk of product savings, current accounts and deposits through Panjamin Institute (LPS). One requirement is the interest rate guarantee money LPS applied in accordance with the established LPS.

For mutual funds and bancassurance products, need to understand the risks carefully and consider whether the magnitude of risk in accordance with the product expected.

As a potential investor, you are entitled to ask for clarification about the bank’s terms and conditions that apply regarding investment products that will be utilized.

Of particular interest in saving money and investing:

- Remember each type of savings and investments that provide high returns typically have a high risk anyway.
- Get familiar with the financial institution where you save or invest your money.
- Know and understand any risks inherent in financial products that you use for each type of savings and investment would be risky.
- Customize the type of deposits and investments with the level of risk you can accept.
- Be rational in the face of investment deals that give high yields in a short time.

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Getting a pay day loan is as simple as that. Before trying for a pay day loan you must have few things in mind , try to do some research on the company which offers you a pay day loan , whether it is legitimate , will you be able to repay your debt on time(to avoid uncomfortable situations) , and beware of the scam companies. Pay day loans was first introduced in USA and now its now spreading across seas, more than 2 million pay day loan companies exist in USA alone. The main benefit of a pay day loan is that you can avoid a bank to heal you in your pressure situations, you can avoid long waiting queue’s for a loan. Overall a pay day loan is a very good concept, unless it is tracked in the right direction.