Sameh Temraz: the fundamentals that investors should remember once they would like to invest these d

I believe that investors need to take into consideration what happened globally;(financial crisis), when they want to invest their money today.

This money or capital invested has to be for a financial goal and an investment objective purpose, which will add positive value to their portfolios. Including:

- Retirement plan

- Capital gains

- Financial planning

- Trust funds, real estate

- Mutual funds, and product structuring

Those are some examples, however the list go for longer. Mainly investors search for such investment schemes. Investors have to think of certain aspects when they wish to invest. They have to think of their financial goals and objectives in the short and long terms. They've to take into consideration their present financial situation and exactly where they want to be with their investments in the future. Most investors should consider more long term rather than short term to see beneficial returns on their investment selections.

The factors that they have to look after is the following speaking in general:

1- The invested funds. How much to invest?

2- which bank or financial institution should they bank their assets with.

3- The risk/ reward ratio associated with such investment schemes.

We are going to take every single factor stand alone and describe it further in simple manner.

1. The invested capital

Investors should think of the money which they wish to invest. It has to be very carefully calculated as a percentage from the total wealth, so the investment decision would be the right one. They've to think of what is need for their families (expenses), and then decide on the amount of money to invest. We have to calculate the amount according to the investor's current financial situation and the time horizon for this investment to grow (short or long term).

Then we can start the whole process for the investor. We have to invest this money in accordance with 2 fundamental factors that will affect the output of this investment:

A. The investors risk tolerance.

Risk tolerance, is just how much the investor can take or to which level he/ she can take of a lose on their invested capital. This risk has to be very well calculated in order to know when to stop if we gone over a certain level or prior to even reaching that level of lose. There's specific mechanism that could be applied to do so by professionals in the field. The risk should be calculated, so we are able to calculate the rewards (returns).

B. The investment, financial schemes and the expected rate of return.

When the investor is investing the money, the investment schemes have to suit their investment experiences and risk tolerance. They have to realize what they ate getting themselves into. The investor's portfolio has to be understood and also getting involved in it all along the process. This methodology of doing business will add positive value to the investor and enhance the dealing with the bank or the financial institution.

2. Which bank to do business with?

This is a vital element when investors want to invest their money. After the global financial crisis, investors were really confused and did not know which banks to trust and do business with again. What have happened globally with the banking industry have taught us and made us understand some facts. The fact that the banking system and policies are very fragile. The system has caused us a disaster for all it matters.

On the other hand, the super visionary associations have taken a very big role in adding to our issues with the gaps and shortages that they have in their own terms and conditions of how the banking, financial and investment industry should and could be done.

Basically, the bank you would deal with should have some standards that will give the investor the strength of taking a decision to work with:

1. Conservatism, in the way in which they implement their cash flow and balance sheet statements.

2. Realize the investors needs and requirements. To work for the investor interest and not only for their own.

3. Cater to the investor investments, rather than think of their own profitability and stock price.

4. A track record bank in beneficial and bad financial and investment sentiments in the market place.

5. The management that is operating the bank.

6. Outstanding customer support and care.

The bank to work with and invest your money with should at a minimal level have those standards pointed out above.

3. The relationship manager that handles investors’ accounts and investments.

A relationship operator must have certain factors that will support and qualify them to manage the investors’ money:

A. Educated. (Business school, certifications in the field).

B. Skilled in the financial and investment area, and know the how to do practice.

C. Experience for certain number of years, so they can add value to the investor.

D. Trustworthy, so the investor trusts to invest with the bank they represent.

E. Provide investors with the very best financial alternatives according to their:

a. Financial situation

b. Risk tolerance

c. Investors attitude towards investment.

If and when the relationship manager has this kind of elements then they're eligible to manage investors’ funds with their banks.

Finally, bankers should have 1 very important thought when dealing with investors. They have to think first and for most in the investor best interest and then the banks or financial institutions that they represent. (profitability and bonuses).

Bankers, work hard for your clients, and not only for your banks and financial institutions.

Bankers should work very hard for their clients. The level of ethics and professionalism really should be unmatched by other industries. Bankers work with other people's capital and they've to be on the highest level of integrity and trustworthy so they can continue working and investing other people money. Bankers have to follow the frame work of the terms and conditions that are legally provided by their banks or financial institutions. By Sameh Temraz, LIFA, CWM, IDWM, MIMA