Posts by Paul Petrus

Young Professional Interesting in Banking and Investment

The Future of Investing – Two ETF Brothers – B&V

Hello All! I am back! I had to take a significant break from writing. Had some life-changing activities to complete, which were very exciting but little related to investment. Thus, unfortunately for you, I will not be covering those here :).

I have decided to produce a series on the Future of Investing. The first topic will investigate two big passive investment players.  The subject is particularly interesting to me, in that it combines technology and investment.

I have not only passed Level III CFA but have also worked as a business analyst in the investment and banking industries. The impact of technology on the investment world has not only directly affected my work but shaped the world.

This topic will not investigate Alternative Investment, which I plan to do in the future due to the specific expertise it requires and the complexity of the topic. So, I will cover Alternative Investment as a future topic. Having said all of this, let’s start!

Equity and bond asset management is going passive. There are two big players providing a passive investment service, BlackRock and Vanguard (the ‘B&V’ of the title). There are multiple reasons why these two are at the top, but the most obvious one is that they have just been better than other providers at managing their costs with the help of technology. Quite simply they can provide ETFs and other passive funds with lower fees.

Continue reading →

ETF (Exchange Traded Funds) – What is this!?!

I am back, had some busy weekends. Moved to a new place. Hope new home will help to deliver even better content to this blog. Today, we will continue with the subject of various assets. The particular asset we will be reviewing will be ETFs. I personally believe that this is one of the best options for many retail customers and is a fantastic tool to diversify your portfolio with minimal time, cost and effort. Also one of the easiest way to invest in foreign countries with minimal cost.

ETF Definition:

There are many options for ETFs in the market. It can be a bit overwhelming, they can cover various assets, regions, sectors and markets. The key thing to keep in mind, you what to minimise cost and get good diversification, also need to look into your overall portfolio and make sure that there are no considerable overlapping. For example, if you have a significant investment in technology stocks, you need to ensure that your ETF has lower exposure in this sector. Of course, if you like more exposure opposite is true.

Let’s go now via name and what means:

Exchange – The asset class is traded on some exchange like LSE or NYSE. This is a venue, where buyers and sellers can exchange financial products like ETFs, stocks, bonds.

Traded – You can buy and sell this product in exchanges any time while these are open.

Fund – Mean that include multiple assets in a particular combination.

ETFs are run by computers, thus, low running cost (0.2%-0.8%). You can have ETF tracking FTSE 100, small-cap stocks in all over the world, world index, bond index, etc.

Continue reading →

UPDATED: Stock, Equity and Shares how do you choose them?! :o

So you have learned about stocks in my previous blog. But how do you choose them?! This part of the blog will look into a very basic of how to make your decision on shares.

I have to warn you, it takes years to master stock picking if you expect extraordinary returns. However, a basic understanding will let you create a portfolio with a reasonable return, and this part of the blog will be a starting point.

Everyone whats to find out whether the stock will go up or down. Guess what, there is no easy answer to this question because everyone would be rich then. Although it is prudent to start with fundamentals. The idea is to try to decide what is a good price to pay for a stock-based on underlining company and not just some speculation.

So let’s begin. There are thousands of stocks traded on international exchanges and around 3K in London. Most of them will not be a suitable investment for you due to various reasons. One could be due to significant transaction costs buying from international exchanges, or the company may have a lot of debt, and when times go bad, it will go broke. It could be simple as stocks became too popular and overvalued.

Based on your needs, risk and expectation you will need to choose between growth stocks or dull-but-worthy and often safer income shares. The difference between the two broadly are as follows:

Continue reading →

Shares, Stocks, Equity – What are they? Where do they come from?!

This is the first blog, that will start to look into a building block of Asset Allocation in more detail. This will be exciting series that will cover bonds, equity, alternatives, funds, etc.

Please keep in mind that blog is about investing and not trading. We aim to buy low (or when the price is going down) and sell high (or when the price is going up). Opposite to trading, where you buy when the price increase and sell when the price goes down.

From previous blogs, you may have decided, how much you would like to invest in stock, but before you start, we should understand these a little better.

You may have heard before that when you buy a share, you buy part of the company. Easy to remember, no? Of course, it is a quite small part in the beginning. But why do companies sell their shares? Well,  it is all to do with the capital structure of the company, they do not want to take more debt and could raise funds by offering part of the company to the public. This is also what is called IPS (Initial public offering). Companies’ usually use funds for expansion or paying back some debt. In UK, companies are broadly classed as Limited (Ltd) or Public (PLC). Both can sell shares to investors, but as retail investors, we are interested in PLCs, these companies offer their share via the stock exchange, which is called London Stock Exchange. For the reader, who is not in  UK structures are still very similar.

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Simple and Sustainable Asset Allocation solution in just 5x6min videos!


After I have created my blog and started writing about investment, I, also, started investigated what else is available on the internet. Pages like Investopedia, which is a great source. Also, I come about the same name book as my blog, with some great short videos from the author. Therefore, I have decided to share these with you.

Have fun watching. This will help you better understand subjects we will review in the future blogs. Also, keep your mind open there isn’t just one investment strategy. Continue reading →

We are but human!!! This applies to investment too.

In my last blog, we looked into what kind of investor you are and slightly touched on some errors Link. Now it is time to see how our minds play with us and affect our decision making as well as look into judgment errors/biases. In investment management, there is traditional finance theory, which assumes that all individuals act rationally and is opposed by behaviour finance. As there is a large quantity of information available online around traditional finance and it is not very applicable in real life, we will spend most of the time talking about behavioural finance.


Part 1

Bounded Rationality

As you know life is not perfect, we will never be in a position where we know everything about the entity/investment or able to process all available information in the market. Our next subject is based on this idea.

Bounded rationality is looking into individuals decision making with incomplete information. When we start looking into stocks, we will need to make a huge amount of research to be comfortable with investment. However, eventually, we come to the point, where additional information does not help us to make a better investment decision, and it is entirely okay. So you have to satisfy yourself with what you have. Of course, if you feel that there is more fundamental information that needs to be researched, please, do so. Some examples could be that you have reviewed market, company fundamentals, and all directors. However, you cannot get information about inside changes in the business. If you are happy with your research and feel confident about the company’s future prospect, you can invest without knowing this additional info. The decision will not be optimal in traditional finance sense, but acceptable. You should make sure that the price is right as well and you leave some room for error, but we will speak in future blogs about stock selection. Continue reading →

Discover Inner Investor

Everyone loves to learn something about himself/herself. This is exactly what we will do in this blog. We will look into your inner investor. Learn what kind of investor you are and what biases you may hold. I am really enthusiastic about this topic and cannot wait to share this knowledge with you. We will start with reviewing standard classification and definitions and then look into some alternative classification. When you look through them you will notice that they are quite similar and based on ability to take a decision, risk tolerance and handle information.

Please keep in mind that with age and change in financial situation your personality type may shift and will not stay the same over whole life.

What you should take from Part 1 and Part 2 approximate investor type you are and start self analysing some personal biases that my cloud your investment jugment. Also start to think, how you could avoid these errors. Quite a few can be avoided with preparing IPS, which I have reviewed in my previous blog (Link)


Part 1

What type of investor you are?

There are four generic personality types:

  • Cautious Investors
  • Methodical Investors
  • Spontaneous Investors
  • Individualist Investors

Cautious Investors:
Cautious investors are generally averse to potential losses. This aversion may be a consequence of your current financial situation or of various life experiences, but mostly you may exhibit a strong need for financial security. Being a Cautious investor usually results in a desire for low-volatility investments with little potential for loss of principal. Although you generally do not like making your own decisions, you are not easily persuaded by others and often choose not to seek professional advice. You dislike losing even small amounts of money and seldom rush into investments. As a result, you may often miss opportunities because of over analysis or fear of taking action. Your investment portfolios generally exhibit low turnover and low volatility.

Methodical Investors: Continue reading →

From Zero to Professional Investment (IPS)!

This part of the blog is to help you to stick with your goals and help to create a customised portfolio for you.

When you come first time to wealth adviser Investment Policy Statement (IPS) needs to be prepared. To finds out more information about you and help adviser to provide products that are most suitable for your current needs. The statement is usually reviewed yearly or if your financial situation changes. So we will create one for you…

The primary goal is for you to be decisive and stick to your goals. However, also we will determine what reasonable goals are. Create IPS, and you will remove most of the stress from the investment. The result will be a gift you will make to yourself when you start investing. You will not need concern yourself with market volatility. We will try to get you to a position where your money is working for you within given boundaries, which we will create.

True, it will take some time at first. However, you do it once and later you will need just updating it. You can download a simple copy of IPS here (IPS).

At end I have also attached document form The Great Life Assurance Company. It is quite good summary document for our dicsussion and can be used for your decsion making.


What will be considering in IPS?!?


  • Return
  • Risk


  • Time
  • Liquidity
  • Tax
  • Legal
  • Unique circumstances

Additional information:

  • Target Asset Allocation
  • Diversification
  • Financial Goals
  • Any additional information which is relevant to investment decision making. Like, where you would like to invest.

Now we will go into more detail on each element to help you to learn more about yourself and potential investment portfolio, which you can construct.


Return: Continue reading →

The practical way to create investment Portfolio!

Here we go my first blog, where I will be providing some useful information on how to start investing! We will touch on bonds, stocks and exchange traded products. This particular Blog will be very efficient and practical. Multiple subjects will be mentioned without expanding for now. Thought I will prepare linked blogs to expand these.

So shall we make some investment! What will we need to create our first investment portfolio?!?

Ingredient 1: Savings:

No way around it. You need to start saving. You cannot invest safely without any initial capital, even if this is just minimal. If you have any debt, you should pay it back first as debt is outflow with certainty in your life. Make sure you have sufficient cash flow after paying your debt & other expenses. When all is considered you start saving and can start allocating residual to your investment portfolio.

So how much cash flow we will need to start? Well as little as £20 pounds a month will do in the beginning. However, more you save higher your portfolio in the future as all powerful cumulative interest will kick in. Also, your transaction cost will be the lower percentage of the overall portfolio.  I would recommend saving anywhere from few hundreds (100,200 etc.) to few thousands a month.

Simple example on Cumulative interest rate:

Save £20 a month with the annual return of 5%, time period 5 years.

>>> After five-year:  Portfolio Value £1,385.79, Profit  £185.79.

Save £500 a month with the annual return of 5%, time period 5 years.

>>> After five-year: Portfolio Value £34,644.72, Profit £4,644.72.

Ingredient 2: Portfolio allocation decision: Continue reading →



My name is Paul. I am a consultant in banking. Few years, ago I have started earning more money than I really needed in life. So I thought, it was time for me to make my money work for me!

Therefore, I have started to educate myself and picked up to study Charted Financial Analyst qualification. Some would say that this is the most challenging portfolio management qualification consisting of 3 level exams, which are testing everything from Ethics to Derivative. At first, there were some downturns in my investment portfolio and still remember my first stock I bought in London Stock Exchange… It was quite thrilling, and scary. I have learned a lot since then about my emotions, decision making, wider portfolio. in this blog, I will my experience and education to help you to make wiser decisions than me. At least initially :). Thus, improve your financial situation and future.

In this blog, I will be providing information sources, training materials, ideas, etc. to simplify investment decision making. Investment is definitely easier than you think. Of course, there will be some work required initially to setup everything. Trust me if you play safe, it is straightforward!!!

We will determine differences between company sizes, risk… Learn about VALUE and GROWTH stocks and everything in between.

This is not a blog, how to trade and make millions in two days, but a blog, where you can start educate yourself and become a smarter investor, save for your pension or eventually buy that dream car/house. All will be done based on logic and emotionless but constructive way! In investment objectivity is everything.

With time… I will discuss subjects:

  • 101 Investment in UK with real website and resources, which will cover all investment information needs you may have and more.
  • Behavioural Finance, will discuss some most important behavioural issues in investment. Trust me if you are going to make it, this is one of the most important subjects. On paper, everyone can make money/save for pensions, but just with the right mindset, you can do this in the real world.
  • I will look into traditional investment theories and ratios and provide further reading material.
  • Discuss Risk and Return as well as your life constraints, which will help you better understand yourself and investment capabilities.
  •  Will discuss various portfolios, you can construct with minimal cost to ensure you have right diversification.
  • Will teach Alternative investment and how your house or small company plays in your portfolio.
  • Share some content that I enjoy reading and watching about investment

Shall we start our adventure on becoming an independent investor and start saving for your future!!! Let’s becoming demystified with all fancy words the financial world is using. Everything is much simpler when you go step by step… Let me guide you.