Sameh Temraz: What are the fundamentals that investors need to consider once they would like to invest nowadays.

I believe that investors should take into consideration what happened globally;(financial crisis), when they want to invest their money today. This money or capital invested should be for a financial goal and an investment objective purpose, which will add positive value to their portfolios. For example: - Retirement plan - Capital gains - Financial planning - Trust funds, real estate - Mutual funds, and product structuring All those are some examples, but the list go for longer. Mainly investors look for such investment schemes. Investors have to think of certain aspects when they want 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 current financial situation and where they wish to be with their investments in the future. Most investors should think more long term as opposed to short term to see beneficial returns on their investment selections. The factors that they need to look after is the following speaking in general: 1- The invested capital. 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. 4- The relationship manager, that will handle their accounts and offer them with the investments that are suitable for their financial attitude.(investment decisions). 5- The logical and tangible returns the investors should expect based on their decisions to buy this kind of investments. We will take every part stand alone and explain it further in simple manner. 1. The invested capital Investors really should think of the capital that they wish to invest. It has to be carefully calculated as a percentage from the total wealth, so the investment decision would be the right one. They have to think of what is need for their families (expenses), and then make a decision on the sum of money to invest. We have to calculate the amount depending on the investor's current financial situation and the time horizon for this investment to increase (short or long term). Then we are able to begin the whole process for the investor. We have to invest this money in accordance with 2 important factors that will affect the output of this investment: A. The investors risk tolerance. Risk tolerance, is how much the investor can take or to which level he/ she can take of a lose on their invested capital. This possibility has to be very well calculated in order to know when to stop if we gone over a certain level or before even reaching that level of lose. There is specific mechanism that may be applied to do so by professionals in the field. The risk should be calculated, so we can 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 need 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 improve the dealing with the bank or the financial institution. 2. Which bank to do business with? This can be a crucial aspect when investors would like to invest their capital. After the global financial crisis, investors were really confused and didn't know which banks to rely on and do business with again. What have happened worldwide with the banking sector have taught us and made us realize some facts. The fact that the banking system and policies are very fragile. The system has caused us a disaster for all it matters. Nevertheless, the super visionary associations have taken an incredibly big role in adding to our problems 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 should 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 apply their cash flow and balance sheet statements. 2. Understand the investors demands 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 running the bank. 6. Excellent customer service and care. The bank to work with and invest your money with should at a minimal level have those criteria mentioned above. 3. The relationship manager that handles investors’ accounts and investments. A relationship supervisor really should have certain factors that will support and qualify them to manage the investors’ money: A. Educated. (Business school, certifications in the field). B. Experienced 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 best financial solutions depending on 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 are eligible to manage investors’ money with their banks. 4. The expected and overall returns on the investment schemes The financial returns and rewards on investments should be tangible and logical to be accomplished. The expected rate of return should be calculated with the investor. The financial returns should be calculated based on certain variables: 1. The investment scheme itself. (bonds, equities, private equity, trusts, cash, etc) 2. The financial returns must be doable and accurate. 3. The financial returns should be calculated according to the investment time horizon.(short/long term). 4. The financial returns should be calculated net of inflation rate, fees related to the investment, and any other investment aspects that might be added to the investment scheme. 5. The financial returns also needs to be calculated according to geography, industry, sector and economic policies that might have an effect on the entire investment returns. Financial returns have 2 factors: 1. Total returns, the final financial returns on the investment after subtracting all factors that we talked about above. This would be the NET financial returns. 2. Expected returns, is what the investor would be expecting to get in financial returns over the investment once the process is initiated, prior to the actual investment is bought. Finally, bankers should have 1 important thought when dealing with investors. They've 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 have to work very hard for their clients. The level of ethics and professionalism 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 others money. Bankers need 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