5 Golden Rules

Five Golden Rules of Investment...

1. Long Term Perspective...

Recommended investment duration should be evaluated in a longer term perspective (at least 6 months) for investment instruments excepting money market funds. Thus, it is very important for investment decision to be correlated with liquidity preference.

2. Do not focus on the past but on the future!... 

The same returns should not be always expected from the same investment instrument. Referring to past performance might not be the right approach. Cyclical markets will lead to different investment themes. For this reason, it is required not to focus on the past, but on the expectations of the market.

3. Diversify!...

By investing in different asset classes, it is possible to increase the potential return of investment instruments. No investment product is able to meet all of the investor’s needs and no investment fund alone is an alternative to deposit, or other investment products.

4. Avoid from concentration risk...

Diversifying asset classes in the portfolio in line with risk preferences, the concentration risk (in a single asset / fund given more weight) might be prevented. In this manner, you are less affected by volatility that can occur in certain asset classes.

5. Risk perception and investor profile... 

Variables such as individual investor’s perception of risk, liquidity preference and level of knowledge of investment instruments, are the most important factors determining the “personal investment universe”.

In line with the risk profiles and preferences of investors, diversifying the portfolio with different asset classes (funds) could be an ideal strategy to increase potential returns.