Investment Guide

 What is an investment portfolio


An investment consists of acquisitions or the use of financial instruments and money to get gains from interest and dividends. This category includes: money market instruments, capital market securities, current accounts, collective investment instruments and deposit accounts.


An investment portfolio is the acquisition of securities on organized and regulated capital markets, which do not permit direct participation in managing the company (e.g. capital market securities, money market instruments, collective investment instruments, operations current accounts, deposit accounts operations).


How to build an investment portfolio


Defining financial objectives, portfolio allocation, diversification, portfolio nucleus, finding less traditional areas, monitoring and reinvestment risks are the main steps for an investment portfolio.


Defining financial goals - Before anything, it must put three simple questions: How much money do I need to invest? When I need money and for how long? What is my risk tolerance?. According to experts, these objectives can be on short (travel, a car loan, a house loan  etc.) or long term (education of children, vacation home, retirement, charities etc.).

Determining the allocation assets, portfolio investment objective is to balance risk and return, consistent with personal objectives, risk tolerance and time horizon. It must be considered the personal expectations and those of the market in terms of future yields and resource allocation depending on how you estimate the evolution of the assets. Financial assets most commonly used in the portfolios are shares, bonds and money market instruments.

Diversification – As nobody can predict its future, it is important to diversify your investment portfolio; the basic idea is to not put all our eggs in one basket, but neither have too many baskets that are too hard to protect, metaphorically speaking. If someone holds shares in social networks, for example, diversification is reduced because they are all part of one sector aka the social networks.

Identifying the core portfolio is the most important portfolio component. Usually it consists of local assets (shares, bonds and fixed income instruments in the short term). To define core should be evaluated investment cycle, GDP growth and credit cycle where you belong.

Establishing investment - These satellites are those investments that help diversifying alternative. For example, in addition to traditional stock and bond portfolios may invest in commodities, art, private equity, real estate,  etc.

Monitoring risks - in this moment you have to wonder who is and who runs the company's history, if the investment is liquid and easy, if managers have done what they promised, so you might get out of this investment, or whether the company, although excellent, it is overrated. Of course, it is necessary to constantly monitor the company and the share price. Investing regularly is the key to success. There are several reasons why a constant investment program is helpful. Among the most important is a compound interest that accumulates in the portfolio and also the purchase of assets from average prices in time.


Any investment capital in the financial market requires a strategy, a strong investment portfolio and efficient risk management. In the context of the stock market greatly depreciated yearly, especially after the big crisis, the risk appetite was slightly decreased; above all is recommended a punctual analysis of each potential investment opportunities in existing macroeconomic context.


Different type of investments




Stocks represent material goods owned by a company in order to be sold (goods) or to be used in the production process (raw materials, consumables). In its structure includes: raw materials and consumables (for the production process which can be found in the final product fully or partially - raw materials - or the objection cannot be found in the final product, consumables); production in progress; finished products and goods (purchased by the company for resale); advances for purchases of stocks. You can choose all kinds of stocks, bonds and other complex instruments; failure to raise a criterion of liquidity have much greater risk now than before, because of buyers prudence.




Investments in bonds have become attractive lately and the buyer should take into account every possible examination of the investment opportunities existing in macroeconomic context. For investors with a greater aversion to risk a greater weight in their portfolio will have bank deposits and eventually bonds. Holdings of shares and bonds must be accompanied by a more active management of the portfolio, because otherwise it can lead to losses. Internationally the bonds will enjoy success, especially in those countries where National banks will cut the benchmark interest rates, making them the best saving instruments in good investment placements. Bond funds (or fixed income instruments) displace at least 90% of the money in bonds and other fixed income instruments. The risks of investment will remain low, but at a slightly higher level than the specific monetary funds. The bonds involve a greater risk than government bonds and bank deposits, but may offer slightly higher returns.

Unlike units issued by equity funds, bond funds those issued have a much more stable from day to day and offer investors with regular returns. Such annual return on the bonds will be positive. This makes bonds an instrument in excellent preservation of capital and achieving real growth. Investing in bond funds is extremely simple and requires only a form of ownership and transfer money.



o   Commercial

o   Residential


Whether referring to investment in real estate property, either is commercial or residential, one of the most important aspects of their risk level. From this point of view investments are classified into two categories: those guaranteed (that there is someone who guarantees you that you will get your money back plus profit, regardless if this "someone" is the state, a particular company or other institution) and are not guaranteed. At its most general, guaranteed investments bring lower profits than unsecured, although there are notable exceptions.


Real estate investments fall clearly into the category of those who are not guaranteed. However, they are often considered to be low risk, but very much depends on the each particular characteristic. Property investment means an apartment, a house or a commercial space owned and from which you get some income, or intend to later sell it at a price higher than you bought it. These properties are subject to a limited number of risks, the main ones being those that could lead to their destruction: earthquake, fire, flood, landslides etc. The big advantage is that these events are rare and insurance is very common, easily contracted and reasonable costs.


Often the risk of a particular investment which is not guaranteed compares with the risk of investing in shares. This is because stock exchanges are considered to be among the most risky (and profitable) investment types, for two reasons: on the one hand exchanges of shares can fluctuate very large (which can result in substantial decreases in certain periods) and on the other hand those companies are always subject to many risks, including bankruptcy.


Well, this is why many believe that real estate investments are "safe" compared with the exchanges of shares. Beyond the catastrophic risks that would lead to their destruction,  real estate will continue to have a certain intrinsic value, regardless of economic conditions, so there will never be "bankruptcy" (as long as people will need housing) .

This does not mean, however, that there may also be affected by these economic cycles. In recent years, housing prices have shown that are very much influenced by these factors. In conclusion, the nature of the faced risks, real estate investments seem to be safer than other types of investments. But during any crisis, they are very much affected, even if less than stock shares.

It follows that the most important aspect of an investment is actually the moment that carried them beyond the category of risk. And during this period real estate are at that level, which recommends it as a good buying opportunity.




The information key to the success of businesses, focusing on seven factors: inheritance, women leaders, corporate governance, communication and conflict resolution, branding, corporate social responsibility, philanthropy and sustainability, information security. Currently there is a wide range of options available, adapted both for those whose financial goals are short-term investments and for those whose financial goals are placed on the long term.

Precious Objects


Although buying precious objects is considered a safe investment rather, it is not without risks; the risk depends on how people invested these funds. If the funds are used to buy shares in a gold mining company, they will generally have a substantially higher risk, compared with the funds used for the purchase of gold bullion.

Advantages of investment in precious objects are:

  1. Stability - over time gold/precious objects has preserved its purchasing power and is considered an unquestionable instrument of protection against inflation. They’re durable and tangible, and its value is indisputable compared to paper money.
  2. Liquidity – for example, gold is an international currency that can be sold anywhere and at any time, therefore precious objects can be deposited as pledge, sell and quickly turned into liquidity.
  3. At the moment experts recommend as a percentage between 5-10% of long-term investment portfolio to be in precious metals.
  4. Diversification – though, as independent investment, gold/precious objects presents a risk, with conventional investments (stocks, bonds, etc.) reduce the risk that gold has reverse correlation with the investments on the capital market.


Lending Investments


Buying buildings, machinery or equipment require the enterprise attracting large sums. For these needs, banks make available lending investments, which are granted in longer periods to reduce the financial effort required to refund. Duration of funding for loans of this type reaches a maximum of 10 years. Most times, there is a grace period of 6-12 months and the amount granted can cover the full amount of the investment. The use of money is monitored by the bank, so the company must submit after each drawing document proving that the amounts were spent according to contractual agreement. For the acquisition or construction of buildings, banks designed real estate loans for microenterprises. The repayment period is extended from 15 years to allow borrowing more money, with no advance minimum.


Cash Equivalents


Cash equivalents are short-term financial investments, highly liquid, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. The cash flow statement shows how the entity generates and uses cash and cash equivalents. Cash flows are inflows and outflows of cash and cash equivalents and comprise cash and demand deposits.

The cash flow statement must show the entity's cash flows during the period classified by operating, investing and financing. Operating activities are the main revenue generating activities of the entity and other activities that are not investing activities or financing activities. Investment activities are the acquisition and disposal of fixed assets and other investments not included in cash equivalents.

Cash flows exclude movements between items that constitute cash or cash equivalents because these components are part of the cash management of an entity rather than part of its operating, investing and financing. Cash management includes the investment of excess cash in cash equivalents. Cash flows are useful in assessing the ability of an enterprise to generate cash and cash equivalents and enables users to develop models to assess and compare the present value of future cash flows of different enterprises, treasury information available on the balance sheet. Also, this information increases the comparability of the reporting of operating performance by different enterprises because it eliminates the effects of using different accounting treatments for the same transactions and events.




You can find that risk decreases as the number of assets in the portfolio increases; so diversification benefit applies when the criterion by which this is achieved is one particular, very simple and very practical: asset liquidity component. These investment portfolios must be characterized by very low risk and yields comparable to bank deposits. Also, access to money need to be very fast, being honored withdrawal requests with maximum efficiency and low cost.