Jakarta, CNBC Indonesia – For those of you who own mutual funds, have you ever felt that your investments are not experiencing significant growth or are even making losses? So what should be done?
Although you can buy mutual funds today and sell them a few days later, like a stock trader, this is actually not recommended because there are other cost components in this investment that you have to pay close attention to.
In the world of mutual fund investment, the term trading does not apply. However, if investors need to change mutual funds in their portfolio, they can switch.
Switching is carried out to mitigate the risk of fluctuations in mutual fund values when market conditions do not match expectations. So, how do you do the switching and what do you need to pay attention to? The following is the explanation.
Switching mutual funds
Switching is done by looking at market momentum, for example, if you think it is time to reduce some portions of stock mutual funds, then you can switch the mutual funds to fixed income or the money market.
Switching should also be done to a different type of mutual fund, for example from a stock mutual fund to another or vice versa and, not from one type of mutual fund.
Switching mutual funds also cannot be done on the same day because changes in mutual fund prices occur in one day.
Therefore, it is best to carry out the switching process over several months to see whether the performance of the mutual fund can outperform the reference index or vice versa.
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