Over more than 20 years I was able to invest clients‘ money and my own money. Since my youth I was fascinated what makes stock markets move. But there was one moment I remember well: During my last year of studies in 1998 I focussed on „Banking & Finance“ at the University of Applied Sciences in Chur. I took the challenge to write a thesis on „Structured FX-Derivatives and their practical use“. In those days Structured Products were only used by institutions and it was difficult to find professionals who were able to give me insights on how such products are created and calculated. I spent nights calculating formulas to understand the pricing. In my final remarks I commented that some day such products could be purchased and of interest also for private individuals. I was far from any idea how big this business has become today with all the upsides and downsides included!
My firm belief is that you need to have discipline, a clear understanding of the risks involved and also the courage to take profits or losses at any point in time. Asset allocation and risk assessment matter!
One example to share:
In 2004 we bought our first family home. In those days I worked for a large Swiss Bank. Part of the compensation in earlier years were paid to us in stock options. At some point we were offered to convert them into regular shares. I decided to do so because I wanted to diversify my concentration risk and reduce the mortgage exposure. Against the majority of my colleagues holding stock options, I converted and sold about 6 times higher than currently traded. This transaction gave me a more balanced Asset Allocation & Liability distribution.
We sold the house in 2011 with nearly 35% of profit. Some call it luck, I call it calculated risk!
Under INVEST I will from time to time share my thoughts on markets, asset classes and investment trends.