Abdulmohsin Al Omran, Founder and CEO of The Family Office, Emphasizes to Argaam the Importance of Investment Planning for Retirement

“Better late than never” is the proverb Abdulmohsin cited to start answering Argaam’s question about the best time for an individual to start planning for retirement by building a diversified investment portfolio.

“It’s important to be ready for retirement. Some might delay planning for this stage or rely completely on the pension system provided by their employer in the public or private sector. But every individual must save and implement almost the same investment and governance policy as pension funds and investment institutions do,” said Abdulmohsin Al Omran, Founder and CEO of The Family Office.

He noted that many investors seek to outperform institutions that rely on scientific foundations to allocate assets and maintain the balance of investment portfolios in volatile markets.

“Pension funds and financial institutions manage portfolios structurally where the investment is allocated to various asset classes like cash, bonds and sukuk, local or international stocks, private assets like real estate and credit, and new sectors like technology and others,” he added. 

When asked about the level of returns that would constitute good performance, Al Omran answered, “There is the 7/10 or 10/7 rule. If investors achieve 7% annual returns, their capital will double in 10 years. If they achieve 10% returns, their capital will double in seven years.”

“Everyone aspires to achieve 10% or more, but it’s difficult. If investors achieve between 7% to 10% annual returns over a long term up to 20 years, this would be an excellent return,” he continued.

He stressed that achieving much higher returns is possible over six months, a year, or two years as we’ve witnessed in international markets in the last two years, noting that the big correction in markets this year made some investors loose more than 70% of their investments.

Al Omran also explained that a sophisticated investor benefits from market fluctuations to build a portfolio and invests during bearish markets and exits investments in bull markets. He mentioned that the best solution, especially for retirement, is to invest continuously every month, quarter, semester or year while monitoring portfolio fluctuations.

Regarded expectations for retirement portfolios built at different stages, Al Omran said, “There is no major difference in the returns of those who invest for 10, 20 or 30 years before retirement, but volatility might vary.”

He concluded with a reference to “Black Monday” in 1987, when the US market declined by 25%. "If we look at the historical US market performance chart today, we would need a magnifier to find this correction because investors continued investing and remained patient. This is the biggest insurance to investors’ wealth, especially if the retirement portfolio aims at maintaining the same lifestyle as before retirement,” he said.

The Family Office helps individuals plan for retirement and make the right choices from the very beginning. Use our interactive tool and start your investment journey.

About The Family Office:

The Family Office in Bahrain and its Riyadh-based wealth manager, The Family Office International Investment Company, are regulated by the Central Bank of Bahrain and the Capital Market Authority of Saudi Arabia, respectively, serving hundreds of families, individuals and investors. The firm helps clients achieve their wealth goals through custom-made investment strategies that cater to their unique needs.

Disclaimer:

The Family Office Co. BSC (c) is a Category 1 Investment Firm regulated by the Central Bank of Bahrain, C.R. No. 53871 dated 21/6/2004. Paid Up Capital: $10.000.000. The Family Office Co. BSC (c) only offers products and services to ‘accredited investors’ as defined by the Central Bank of Bahrain.
 

The Family Office International Investment is a joint-stock closed company owned by one person. Paid-up capital: SAR 20 million. CR No. 7007701696.  It was licensed by the Capital Market Authority (No. 17-182-30) to carry out arranging, advisory and managing investments and operating funds, with respect to securities.