Sameh Temraz: What Are The Fundamentals That Investors Need To Evaluate When They Want To Invest The

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

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. Such as:

- Retirement

- 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 would like to invest. They've 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 have to think more long term as an alternative to short term to see beneficial returns on their investment decisions.

The criteria which they need 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 these types of investment schemes.

4- The relationship manager, that will take care of their accounts and provide them with the investments that are suitable for their financial attitude.(investment decisions).

5- The logical and tangible returns the investors really should expect depending on their decisions to buy such investments.

We are going to take every part stand alone and clarify it further in simple manner.

1. The invested capital

Investors really should think of the money which they would like to invest. It needs to be carefully calculated as a percentage from the total wealth, so the investment decision would be the best one. They have to think of what is need for their families (expenses), and then decide about the sum of money to invest. We have to calculate the amount depending on the investor's current financial situation as well as the time horizon for this investment to expand (short or long term).

Then we can start the whole process for the investor. We have to spend this money in accordance with two major factors that may impact 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 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 might 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 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 for the investor and enhance the dealing with the bank or the financial institution.

2. Which bank to do business with?

This can be a vital element once investors would like to invest their money. After the global financial crisis, investors were extremely confused and didn't know which banks to trust and do business with again. What have happened worldwide with the banking industry have taught us and made us realize some facts. The fact that the banking system and policies are extremely fragile. The system has caused us a disaster for all it matters.

On the other hand, the super visionary associations have taken an extremely 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'll 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 demands and wants. 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 negative financial and investment sentiments in the market place.

5. The management that's 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 all those factors pointed out above.

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

A relationship supervisor really should have certain elements 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 field, and know the how to do practice.

C. Experience for certain number of years, so they'll 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 solutions 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 are eligible to manage investors funds with their banks.

4. The expected and total 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 have to be calculated with the investor. The financial returns should be calculated depending on specific aspects:

1. The investment scheme by itself. (bonds, equities, private equity, trusts, cash, etc)

2. The financial returns have to be achievable and real.

3. The financial returns have to be calculated depending on the investment time horizon.(short/long term).

4. The financial returns should be calculated net of inflation rate, fees associated with the investment, and any other investment aspects that may be added to the investment scheme.

5. The financial returns should also be calculated depending on 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 aspects that we talked about above. This would be the NET financial returns.

2. Expected returns, is what the investor would expect to get in financial returns above the investment when the process is initiated, prior to the actual investment is bought.

Finally, bankers really should have one very 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.