Financial Advice
Six-Step Approach to Investing
Financial Analysis - Understand your financial situation (Balance sheet & liquidity statement)
Risk Profile - Understand your personal appetite for investing
Asset Allocation - Understand how to diversify your investment portfolio
​Product Selection - Understand the best products for investment
​Investment Plan - Understand how much to invest in each product and understand the potential returns
Invest - Learn how to open your online trading account and make your first purchase
investian leads you systematically through the investment jungle and helps you become an independent investor!
1. Financial Analysis
During the first step of the investment process, I collate your financial data to gain an overall understanding of your current financial situation.
Based on the data provided, I create a customer balance sheet and a liquidity statement.
The balance sheet highlights your overall wealth while the liquidity statement highlights your savings quota.
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The savings quota indicates the amount per annum you have available for investment.
2. Risk Profile
During the second step, you complete a questionnaire to determine your personal risk profile.
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There are 9 questions in total where you select the option which best fits your current personal situation.
Each question has between 3 & 5 different options to choose from and each option has a score rating corresponding to the level of risk involved.
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There are 6 levels of risk: Low Risk, Conservative, Balanced, Dynamic, Growth and Capital Gains.
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The risk profile tool highlights your personal appetite for risk and automatically determines your risk level for investment.
3. Asset Allocation
Asset classes for investment include cash, bonds, real estate, equity, crypto, etc.
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The results of your risk profile are used to determine the percentages of the various asset classes in your target asset allocation.
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Lower risk profile scores result in a lower percentage allocation in equities and a higher percentage allocation in bonds.
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Higher risk profile scores result in a higher percentage allocation in equities and a lower (or zero) percentage allocation in bonds.
4. Product Selection
Once the target asset allocation has been determined, we focus our attention on the selection of suitable investment products.
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Based on 6 key selection criteria (Fund management, Total Expense Ratio (TER), Use of Income, Replication Method, Age of ETF and ETF size, I have identified a list of low-cost ETFs appropriate for investment.
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Every quarter, I screen the ETF market according to the criteria above and update the list of ETFs where relevant.
5. Investment Plan
In the fifth stage of the investment process, I create an an investment plan using the products selected in stage 4.
The investment plan is set up and aligned with your short, mid- and long-term goals.
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Taking realistic target returns for each asset class into consideration, the investment plan indicates the returns after broker and product fees that can be expected over the selected time horizons.
6. Invest
In the sixth and final stage, you set up your low-cost online trading account and we purchase your first investment product together.
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You purchase your ETF products on a regular basis e.g. monthly according to your target asset allocation.
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The Investment Dashboard tool highlights the overall portfolio performance and provides visual guidance for product rebalancing.
