Dec 4, 2022|Management Insights- 1 min
o It’s important to be ready for retirement. Some might delay planning for this stage or rely completely on the pension system, but every individual must save and implement almost the same investment and governance policy as pension funds and investment institutions that rely on scientific foundations to allocate assets and maintain the balance of investment portfolios in volatile markets.
o Pension funds and financial institutions manage portfolios structurally where the investment is allocated to various asset classes like cash, bonds and sukuk, local or international stocks, private assets like real estate and credit, and new sectors like technology and others.
o There is the 7/10 or 10/7 rule. If investors achieve 7% annual returns, their capital will double in 10 years. If they achieve 10% returns, their capital will double in seven years.
o Everyone aspires to achieve 10% or more, but it’s difficult. If investors achieve between 7% to 10% annual returns over a long term up to 20 years, this would be an excellent return.
o A sophisticated investor benefits from market fluctuations to build a portfolio and invests during bearish markets and exits investments in bull markets. He mentioned that the best solution, especially for retirement, is to invest continuously every month, quarter, semester or year while monitoring portfolio fluctuations.
Watch the full interview to learn more about the importance of long-term investment planning for retirement.