! The beginner’s guide to building an investment portfolio

How to build your first investment portfolio: Investment portfolios are no longer reserved for wealthy or seasoned investors. High inflation and the EGP’s depreciation have pushed people from a very young age to look beyond traditional saving, while fintech has opened access to investment tools that were difficult or inaccessible just a few years ago. Many people learn investing through trial and error, but there are a few core principles that can save you significant time and losses as you work toward your financial goals.

Start with clear life goals

Investment should serve real-life objectives. “It’s not just that I have EGP 1 mn and I want to turn it into EGP 10 mn”, what’s the point of it?” Azimut Egypt CEO Ahmed Abul Saad says. “Do you want to buy a house? A car? Do you want to travel?” Those are real goals,” he explains.

Be consistent and disciplined

“Tool accessibility should be complemented by a basic understanding of consistent saving and long-term investing,” Ahmed Waly, MD, Global Head of Brokerage at EFG Hermes tells us. Discipline and consistency help investors survive volatility and reach their objectives over time, Abul Saad adds.

Avoid going “all in” at once

“One of the key principles is avoiding investing all your money at once,” Ebrahim Anwar, CEO of precious metals investment app Sabika, tells us. Instead, he advocates gradual investing over regular intervals through what is known as dollar-cost averaging. “Don’t invest all your money at once — invest gradually every month in installments,” Anwar notes. This approach helps reduce the impact of market volatility and avoids emotional reactions driven by fear or hype, Abul Saad says.

Diversify

“There is no such thing as a risk-free investment, which is why diversification is a core principle for mitigating risk,” Abul Saad tells us. “Every asset class — equities, gold, real estate, etc — can also be diversified within itself … equity investing, for example, can take the form of a stock portfolio, an equity fund, or even a portfolio of equity funds,” he adds.

Liquidity should always be available

"Generally, the rule of thumb should always be: am I liquid enough, well diversified?" Waly says. Part of the portfolio should remain in cash or cash equivalents, such as money market funds, to provide flexibility and allow investors to seize opportunities when they appear unexpectedly.

Follow trusted guidance

Having the right mentor or source of guidance early can help young investors avoid rushing into markets before fully understanding risk or how investing actually works, Waly and Anwar tell us. Waly warns that many beginners are drawn toward speculation and “word-of-mouth investing” rather than informed decision-making. “They don’t learn, or they don’t have a mentor or advisor,” Anwar notes, arguing that young investors should first understand money management, follow experienced investors, and invest in developing their own skills before taking larger financial risks.

Invest in what you understand first

Investment decisions should be tied to what a person actually understands, rather than fixed formulas or trendy asset classes, Anwar says. Someone with a strong understanding of stocks or real estate can allocate more heavily toward those assets, while beginners may be better off starting with simpler and more liquid investments such as gold and silver until they build enough knowledge to expand into other areas, he suggests.

Start now

A young person beginning to invest between the ages of 16 and 20 generally has the advantage of time being on their side, Waly notes. “This, in turn, would entail looking more towards investing in assets such as equities or stock funds, while continuing to invest in this over time without being alarmed by market ups and downs,” he adds.