Investment is defined as money or investment in a company or project for purposes of profit. Basically, the investment is to buy an asset that is expected in the future be resold with a higher value.
Investments can also be regarded as a delay current consumption for future consumption. Expectations on future profit is compensation for time and risk associated with any investment made.
Someone would have to think about the future at which time the needs of living continue to rise, demand is meant to be educational, transportation, health, shelter, the need for recreation, worship, until the need for a period not productive. With this background, the person aside a portion of its income in the productive and to invest for the period in which they become less productive.
There are many choices in investing, including the opening of deposit, saving, buying land and buildings, bonds, buy gold, stocks, and others. In general the form of assets at Invest divided into two types:
1. Real Investment
Invest a certain amount and in tangible assets, like land, gold, buildings, gold, and others.
2. Financial Investment
That is a certain amount of funds invested in financial assets, such as deposits, stocks, bonds, and others. In this case the securities traded or which often referred to is the effect of stock. According to Law No. 8 of 1995 on the capital market, the definition of the stock exchange is the party that held a sale and purchase of securities offerings other parties for the purpose of trading in such securities. In Indonesia, the stock trading done at the Indonesian Stock Exchange. Not all companies can immediately issue a securities (stocks), so the companies that want to issue securities must meet the criteria or rules that existed prior to issuing any securities.
Determinants of Investment
For an investor who wanted to make an investment, should perform a first analysis in determining investment decisions. To perform an investment analysis, at least there are three factors that must be analyzed, namely:
1. Analysis of macroeconomic conditions
2. Analysis on the type of industry
3. Fundamental analysis of a company
The first stage is carried out by an investor in an investment is to analyze the macro variables, the analysis phase was conducted to analyze the condition of a country's macro economy in the process of an investment. Macroeconomic variables are analyzed such as inflation, current account, exchange rate / exchange rate (exchange rate of a country's currency against the currencies of other countries), and others.
In the second phase, carried out the analysis on a variety of industries. At this stage, we select the type of industry provides the most benefit if performed investment prospects. Which sectors will be an investment can be seen from the movement in the sectoral indices on a capital market industry. Sectors that have a good index for long-term investments would be selected. In the third stage of analysis, fundamental analysis on companies, using financial ratios of a company.
In the financial ratios, divided into five ratios, namely:
1. Liquidity Ratio, expressed the company's ability to meet short term obligations with maturities.
2. Activity ratio, shows the ability and efficiency in utilizing assets companies owned or rotation (turnover) assets a company.
3. Debt, serves to show company effort to meet its long-term liabilities.
4. Profitability Ratio, indicates the level of the company's success in generating profit.
5. Market Ratios, describe how the market value of shares of a company.