You have accumulated savings of 10,000 riyals or its multiples, and you want to invest it in the stock market, looking forward to achieving many times more in one year or in a few years, after I researched, read, and heard that making profits is by relying on yourself and learning to manage your investment by yourself. This may be true, but it will take a lot of time and effort from you, in addition to losing your money during the learning period.

In fact, the advice you get is to manage your own money not because it is the profitable way! Rather, it is due to the low confidence of the Saudi investor (as a result of the consequences of the collapse of February 2006 AD) in investment funds and local financial institutions on the one hand, and on the other hand due to their weak confidence in the performance of the companies listed on the Tadawul stock market during the past years in general and their inability as minority shareholders to influence the management of the company from In order to achieve profits and sustainable growth reflected in their wealth.

Features of low confidence

You can imagine the size of the investments of individuals and public investment funds in the Saudi stock market, as the value of investments of public investment funds in the market is supposed to be much greater than the direct investments of individuals in the market. However, according to the latest market statistics during the year 2019 AD, the direct investment value of individuals in the Saudi stock market exceeds 500 billion riyals, while the investment value of open public investment funds does not exceed 16 billion riyals.

In addition, when you review the performance of the listed Saudi companies during the past ten years, you will find that the general index of the Saudi stock market TASI recently returned to its same levels during the year 2010 AD for the second time and lost all its gains that it achieved during the year 2014 AD and also during 2019 AD. To clarify better, the number of companies that maintained part of their price gains during the same period since 2010 does not exceed 33 companies out of the total number of market companies that reach 180 companies so far, which means that those who invested in the remaining 147 companies since 2010 did not achieve a return. Little on his investment.

appropriate investment strategy

As noted, investing in the Saudi stock market requires an active investment strategy that is concerned with research, analysis and continuous follow-up to ensure that you choose the right company or sector for investment in the long term. This method can be done by establishing a portfolio with savings for investment, focusing on the shares of companies listed on Tadawul and Nomu, especially if the savings for investment are worth 100,000 riyals or less.

At the same time, it is supposed to commit to deducting a monthly amount that feeds the portfolio. The main purpose of investing in the capital markets is to build wealth for several reasons, the most important of which is in order to rely on it and benefit from it upon retirement. In order to determine the deducted amount, it is assumed that the amount to be achieved at the end of the investment period, which usually ranges from 10 to 30 years, depending on the age of the portfolio holder. For example, if the investment portfolio is built with 100,000 riyals as a start and a monthly deduction of 1,000 riyals, with an annual return of 5%, then the target wealth within ten years will be 297,858 riyals. (See the attached table for different scenarios for monthly deduction)

To expand further in the field of portfolio management and the advantages of investment or speculation, you can review the following list of workshops that have been announced in cooperation with a trading company: