Entering the fourth quarter of 2020, how should you manage your investment portfolio?

Reporter: Hikma Dirgantara | Editor: Khomarul Hidayat

KONTAN.CO.ID – JAKARTA. Financial markets are experiencing very high volatility due to the corona virus pandemic. Especially in the third quarter of 2020, the impact of the pandemic and the threat of an economic slowdown was increasingly real. The stock market had a chance rebound hit again, the bond market is also experiencing increased risk.

Entering the fourth quarter of 2020, how should investors arrange their investment portfolios?

Avrist Asset Management Head of Investment Farash Farich said stock instruments are still one of the attractive investment options for collection today. It’s just that stocks are an option for the long term. The reason is, if the Covid-19 case decreases, business improves, and inflation rises in the future, stock instruments will get better.

In addition, in general, the current stock valuation is still considered not too expensive. In preparing stock investment instruments, Farash assessed that investors should be able to use a combination of stocks that are defensive and have opportunities rebound significant.

“Defensive stocks can be like consumer goods and telecommunications. While for stocks that will rebound significant when the economic recovery includes banking, automotive, commodities, cement, and retail. Most importantly, choosing stocks with strong fundamentals and high liquidity, ”Farash told Kontan.co.id, Saturday (3/10).

Also Read: After becoming the winning instrument until the third quarter, the price of gold is predicted to continue to rise

As for the bond market, Farash recommends using bonds as a portfolio with medium-term investment targets. Of the various options available, Farash assessed the 5-year bond Exchange Trade Fund (ETF) could be an option. This is because bond ETFs have low volatility, high liquidity, and offer coupons every six months.

Farash noted that the mutual fund market is currently in a good condition. Moreover, the growth of individual investors was very high at a time of slowing down in institutional and foreign investors.

“It seems that on the one hand, this pandemic also raises awareness of the importance of individual investors to face the uncertainty of making ends meet in the future. Mutual fund investments that are easy and affordable in the end become an option for the community, “added Farash.

Entering the fourth quarter of 2020, Farash assessed that the sentiment that will affect the investment market includes the announcement of an economic recession in various countries, the United States election, as well as developments in the Covid-19 case and its vaccines. Nevertheless, Farash is optimistic that at the end of the year, around November-December will occur rebound.

As for the portfolio of investors, Farash recommends that young people focus more on long-term investment with a share portion of 80% -90%, while the money market and fixed income are 5% -10% respectively.

Meanwhile, for middle age, it can be more balanced with a 50% -60% share portion, 30% fixed income, and 10% -20% money market. Then for old age, you should focus on the money market with a share of 80% -90%, money market and fixed income 5% -10% each.