Updated: Sep 21
This is part of an ongoing series of articles based on a Startup Grind Muscat interview with Nadine Mezher of Sarwa. For more reading about the lessons from her journey, please click here, and for Nadine's advice for founders, click here.
This is the last installment of articles covering my conversation with Nadine Mezher, Co-founder of Sarwa. The previous two covered lessons from her journey and advice for entrepreneurs starting their journey.
This article is focused more about Sarwa, their investment strategy and tips for first time investors with them.
Sarwa is a hybrid robo-investment advisory platform, and their investment strategy is based on passive investment, so they only use Exchange Traded Funds (ETFs) that are combined into a portfolio that are traded on the New York and London Stock Exchanges. If you want to learn more about ETFs you can read more here.
Sarwa offers a different portfolio options at varied risk levels to suit different people's needs, and they also offer valued-based investment with Socially Responsible and Halal portfolios.
"Our ideal customer is anyone who wants to invest their hard earned money to improve their futures. Right now the majority of our customers are young professionals. "
When talking about her tips for first time investors, Nadine is very clear on the fact that the most important factor is time spent on the market. She says:
"The most important advice is start investing. Being our of the market, you're losing time and money".
She explains further, saying for example there were two sisters, a 25 year old and a 35 year old. They both started investing at the same time, putting in the same amount of money every month, and they both want to retire at 60.
Let's assume they both put in $5,000, at 7% return for each of them.
The ten year difference in their age when they started investing, becomes a $500,000 difference in returns, for the advantage of the younger sister. $500,000!
So it's clear, the earlier you start, the better advantage you have.
Stay in the market.
Being a good investor means you're playing the long game, and you're in it for the long haul. Exiting the market when it's low only leads to losing more money over the long term. Every time your money is off the market, you're losing time and returns.
Experts agree that trying to time the market only ends up reducing your returns as an investor over the long term. Jeremy DeGroot says in the conclusion of his most recent quarterly commentary for Litman Gregory:
As a long-term investor, trying to time market tops and bottoms is a fool’s errand. The evidence is overwhelming that most investors diminish their long-term returns trying to do so. They are more likely to chase the market up and down, and get whipsawed, buying high and selling low.
Dollar-Cost Averaging Investment.
Instead of trying to time the market, Nadine suggests to follow Dollar-Cost Averaging.
This is a good strategy to get over the nerves when you start investing. Instead of investing all your money at once you can divide it into equal chunks to invest over a fixed period of time.
Let's say you have $10,000 you'd like to invest. You can divide it into four equal chunks of $2,500 to invest, and spread that over four months or four quarters.
Whether the market is low or high, following this strategy will help ensure you're always buying stocks at an average price.
Ultimately Nadine's recommendation is to make monthly contributions, so it turns into an automatic savings plan.
Just to summarize, this is what Sarwa offers their customers:
Low minimum account starting point at $500.
It is free for accounts below $2500 so you can try them out.
Value based investments through Socially Responsible and Halal portfolio are available.
Transparent pricing: They have a pricing page where they detail what the advisory fee is and what you pay for: 0.85% and goes down to 0.5%
Simple and easy on-boarding.
No entry, or account closing fee. No trading fees. No Lock-in.
Smart Re-balancing: When your asset allocations move away from your desired portfolio allocation, Sarwa will automatically re-balance your portfolio.
Automatic dividend reinvesting and tax optimization.
Customer service: you can access financial advisors and our customer support team when needed.
Great free Educational content and financial planning tools that you can find on their website blog.
Their on-boarding process is relatively straightforward. As a new customer you fill in a form that helps assess your level of risk and you'll have to upload a few documents, then you're good to start investing!
One last thing to mention is that Sarwa is regulated by two entities, in Dubai by the Dubai Financial Services Authority (DFSA) and in Abu Dhabi by the Abu Dhabi Authority ADGM by the FSRA.
They also work with very trusted brokerage partners, US based Interactive Brokers.
Working with Interactive Brokers, gives all Sarwa's customers SIPC coverage which protects their investments in case the company fails, covering up to $500,000.
Sarwa has financial advisors which Nadine recommends you talk to, who will help guide you based on your individual situation and risk profile. You can reach out to them here.
This view is not to be interpreted as giving one-on-one financial advice and may differ from person to person based on unique situations. Do your due diligence before making any decision that may impact your financial well-being.