Long Term Investment, One Form Of Investment

In economics, investment are words commonly used and often translated as planting money with the aim of searching for profit. In Indonesia, investment topics listed in the statement of Financial Accounting Standards (PSAK No. 13) which is a company’s assets are used for the growth of wealth (accreation of wealth) through the distribution of proceeds of investment, such as royalties, interest, dividends, and rent.

Reviewed in terms of time (duration), the investment can be divided into two groups, namely Investment Smoothly and long-term investments. Current investment, the investment is easy and can be immediately disbursed. This investment is intended to be held for a year or less than a year. In the interim, long term investment is an investment that is implemented in the long term is intended as a reserve fund.

For some companies or peorangan, the activity of an investment is an important element in the operations of the company or individual. And assessment of the performance of the company or individual may entirely rely on the results reported on the activities of the investment.

Some companies make investments as a form to store the excess funds. And, a few other companies make investments to deepen business relationship or getting an advantage from the planting of the investment.

An investment may take the form of debt, both short term debt or debt instruments, equities, or trade. Generally, financial investment has the right to exist, such as building, land, gold, diamonds, or commodities-commodities-commodities that can be marketed.

For some types of investments, there is an active market that can shape the market value. For these types of investments, market value is used as a benchmark-setting reasonable value.

Long-term Investment Goals

A company or individual doing long-term investment based on a specific purpose. These goals may differ between one company and another company. One of the objectives of the investment is for profit.

Basically, the investment aims to find the maximum profit. However, for certain companies or individuals may have a primary purpose other than the search for profit. Here are some of your investment objectives.

Gain fixed income in each period, such as interest, dividends, royalties, or rent, and others.Establish a special fund. For example, funds for the benefit of the company or individual business expansion and social interests.Control or control of another company or individual to another through ownership of a portion of equity or stock companies or individuals.Ensure the availability of raw materials and markets for the products produced.Reduce competition between the companies of its kind.

Other forms of long-term investment

Many options for companies or companies to select and set the form of long-term investment. There are companies that choose to invest in land or buildings (not for the operation of the company) is called with property investment.

There are also companies that choose the investments in the form of savings, deposits, or other forms of investment options, such as the purchase of bonds or shares. Long-term investments a company can be done in the form of stock or bonds. In comparison, the second form of investment has advantages and disadvantages.

Long-term investment in the form of bonds gave a clear and definite assurance of acceptance rates within a certain time. If interest rates in the market is declining, interest rates on bonds will not change following the market because the interest rates are already set out in the initial agreement.

In the interim, long term investment in the form of purchase of stocks can provide income higher than the interest rate the bond if the company gets a high profit. And conversely, if the value of the shares owned by the fall in the market, the company or individual will suffer losses.