CAPITAL MARKET INVESTMENT GUIDELINES FOR LESS LITERATE INVESTOR IN INDONESIA

• Main Author: Auditya (19015229), Jane
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/28223
• Institution: Institut Teknologi Bandung

Financial literacy is important to overcome todays Indonesia’s development that gives more investment <br /> <br /> opportunities to society. However, many Indonesian are less literate and instead choose the wrong <br /> <br /> investment and this what makes less literate investor become the concern in this study. OJK has always <br /> <br /> made programs to make people become more literate due to its importance but they also suggest people <br /> <br /> to start investing in the non-bank institutions especially in capital market sector. Meanwhile, there is <br /> <br /> no guidance that state the suitable capital market investment for less literate investor including the <br /> <br /> investment criteria that is needed to remedy their problem. <br /> <br /> There are several capital market investments available in Indonesia, and the decision to select the “right <br /> <br /> investment” usually involves numbers of investment criteria. Investment criteria in this study are the <br /> <br /> criteria that are preferred by and recommended to less literate investors. This study initiated the idea <br /> <br /> to use the analytic hierarchy process for solving the problem. The proposed model determines capital <br /> <br /> market investment suitable for less literate investors, given the importance of each investment criteria. <br /> <br /> The data are all come from the experts, which are chosen carefully according to their professionalism <br /> <br /> in the field of investment, literacy, and capital market so that the data are enough to represent a great <br /> <br /> result. <br /> <br /> The result shows that “Easiness to get the initial information” before buying is the most essential criteria <br /> <br /> that should be had by investment products, especially for less literate investors. This study also <br /> <br /> provides the priority result according to its appropriateness for less literate investors. The ranking of <br /> <br /> investment instrument is Money Market Funds followed by Fixed Income Funds, Stocks, Balanced <br /> <br /> Funds, Equity Funds, Bonds, Sukuk, Real Estate Investment Trust, and Asset-backed Security. <br /> <br /> The application of this study can be by prioritizing the investment criteria with the highest weight. It is <br /> <br /> expected for financial institutions to focus more on the urgency of less literate investors and do some <br /> <br /> development and evaluation on their products and programs. This study also gives less literate <br /> <br /> investors investment guideline by providing suitability ranking of the alternative investments itself. <br /> <br /> Substantially, this study facilitates better investment for less literate investor.