RISK MANAGEMENT: MENENTUKAN PROFIL RISIKO INVESTASI GENERASI MUDA MENGGUNAKAN VAR DAN PSIKOLOGIS

Abstract

Investment is an activity of managing assets in order to make profit. The number of investors in Indonesia is increased significantly. According to KSEI data on August 2023, the 80% investors come from the younger generation due to technological developments and increasing levels of financial literacy. Young generation has more risk and needs risk management to be aware their risk profile and minimize losses. Risk management are influenced by knowledge, capital, and psychological condition regarding the risk level of instruments. One method for determining the risk level is using Monte Carlo Simulation which shows the Value at Risk. Risk management is also influenced by psychological factors, like fomo. This research uses quantitative methods by calculating Value at Risk and qualitative literature studies to obtain risk profiles by comparing returns of shares, crypto, bonds, forex and mutual funds and their influence on investment decisions based on the young generation psychology. The research results stated that there are 2% of young investors have conservative risk, 20% at moderate risk, 40% at high risk, and 38% at very aggressive risk. This is in accordance with the psychological condition of the younger generation who like challenges and easily influenced by herding and anchoring behavior.