Investment BasicsWhereas Caam Saudi Fransi seeks to attract more investors, it exerts the best possible efforts to deliver the best services, strengthen the long-term relationship with its clients, and enhance their role in the investment process and its role as a financial advisor. Therefore, we include this presentation to provide you with a foundation to help you make the right Investment decisions. It covers the basics of Investments, the concept of risk management and introduces the principal asset classes: stocks, bonds and cash equivalents. However, this presentation is not intended to give you advice, but rather to introduce you to basic Investment fundamentals such as:
What is investing? When you invest, you are sacrificing your effort, time and money now in the hope of gaining something greater in the future. Your goal is to have your money work harder for you. Why should you invest? The answer is simply in order for you to secure your financial future as well as your family's. You will acknowledge the benefits of investing early and of investing regularly. Towards a Diversified Portfolio
This presentation will include some illustrations that help you:
Building Your Portfolio We take you through the steps of building your portfolio. You will set your goals, determine your asset allocation strategy, identify which Investment vehicles you want in your portfolio and start investing. You will be able to construct and monitor your own portfolio. When to invest? Investing early allows your Investments more time to grow, and means your earnings and dividends have the opportunity to grow at a faster rate because of compounding. Compounding is the growth that results from the re-investment of income, it has a snowball effect because you earn income not only on the original Investments, but also on the income accumulated in earlier years. Investing regularly puts you on the road to financial well-being. Investment choice. When you invest, you have generally three main asset classes available to you, i.e. cash, bonds and stocks. Cash Equivalents Cash equivalents usually provide ready access to your money when you need it, because they can easily be converted to cash. A portion of your portfolio should always be invested in them to provide liquidity as they are referred to as 'liquid assets', that is they are easily accessible for sudden cash needs, and are intended for short-term use. Bonds Bonds are issued by companies and governments as a way of borrowing money. They are referred to as 'fixed income' Investments because your earnings are usually predetermined by a fixed rate of interest. They can bring a certain amount of stability to a portfolio. Stocks When you invest in stocks, in the form of shares, you are buying part of a company. Stocks and shares provide capital appreciation, and over time, they have outperformed all other types of Investments. There are two ways you can make money investing in stocks:
Mutual Funds A mutual fund pools the money of many investors and buys stocks, bonds, money market instruments, or a combination of these securities. You delegate your day to day Investment decisions to a team of professional fund managers. It is an easy and convenient way to diversify by spreading money across asset classes.
Towards a Diversified Portfolio There are many factors that affect how your Investments perform. One important element is risk. Every Investment decision involves a certain amount of risk. That is why you should understand how risk affects investing and the importance of diversification. Learn how you can manage risk by using the right asset allocation strategy. Risk One of the most important issues you face as an investor is determining how comfortable you are with risk. Your Investment risk tolerance means how much downturn you can handle without bailing out. There is a tradeoff between risk and reward. The higher the Investment risk, the higher the potential return and the better suited it is for long-term time horizons.There are two types of risk, i.e.
Diversification The importance of diversification stems from the old saying "don't put all your eggs in one basket". Indeed, different asset classes can respond differently to the same market conditions. That is why it is best to spread your Investments. Asset Allocation The best way to diversify your Investments is through an asset volatility allocation strategy. Asset allocation can reduce overall portfolio risks and enhance potential returns. The asset allocation decision is the most important an investor can make. It may be even more important than which securities you choose and when you decide to buy and sell. Building Your Portfolio We defined 4 steps for building your portfolio, which we will accompany you in the following paragraphs:
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Mutual Funds Caam Saudi Fransi offers you a wide range of open-ended Mutual Funds covering:
Advantages of Caam Saudi Fransi Mutual Funds: With our mutual funds, you can enjoy our professional services coupled with manyother advantages:
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The Red Apex - High Risk |
| The Orange Layer - Medium Risk | |
| The Green Layer - Low Risk | |
