How do you invest in investment portfolios?.. Ministers’ Information presents steps to achieve profit

When an investor decides to invest in stocks or in investment funds, he can choose from among the shares of many companies listed on the financial markets. These available investments usually carry different levels of risk and varying levels of returns.

Dr. Ahmed Al-Otaifi, professor of investment and finance, said that an investment portfolio means a diverse assortment of assets, meaning that if one asset is purchased it does not mean that you have a portfolio.

He pointed out that if you have an investment portfolio in stocks, this means that you have investments in different sectors of stocks; Meaning a share in the petrochemical or housing sector, and another in the banking sector, stressing that the idea of the portfolio is based on diversification.

Al-Otaifi pointed out in a video broadcast by the Information and Decision Support Center of the Council of Ministers, entitled “Simply,” that there may be a specialized portfolio; Meaning directing that portfolio to buy specific stocks or assets in a specific sector, saying: “It may be a portfolio in the housing sector or specialized in the petrochemical sector,” explaining that the most important thing in portfolio management is that it be based on diversification and risk management, saying: “It is not logical for it to be All assets in the portfolio move in one direction.”

Investment portfolio

He pointed out that if gains are achieved in one direction, it is possible to achieve a loss in another direction, and the most important thing is to know the importance of the investment portfolio, explaining that every economy is diversified and the sources of income are diverse, such as treasury bills or real estate, and investing in the investment portfolio will have assets in real estate, petrochemicals, banks, and assets. Others, advising to answer several questions before creating an investment portfolio, such as: Do you need income in the short, medium, or long term? The other question is: Am I a risk person or do I not like risk? He stressed that the more risk-inclined your personality is, the more you tend to invest in stocks. However, if you are risk-neutral, there will likely be diversification in the portfolio. Part in stocks and part in treasury bills or bonds.

Risk drivers

There are many factors that cause investment risk, the most common of which is volatility. Investment prices may fluctuate from the highest to the lowest level without warning, meaning that the price may fall below the price paid by the buyer. What further complicates the problem of volatility is that it cannot be predicted, nor the effects it may have on investments.

What are financial market indicators?

He explained that the Egyptian Stock Exchange index egx30K, the American Stock Exchange Index DOWJONES and other financial market indices have indicators that reflect their movement, and the index is a mirror of the movement of the financial market, and in Egypt the main index of the financial market is the egx30K index, and there are other existing indices such as the EGX70 and EGX100, and each index has a methodology and method. Different account.