What to do with savings? Six ready-made strategies from an investment expert

— The value of the invested funds is only one of the factors determining the way we invest. Other illustrative but important variables include, but are not limited to the value of the investment in relation to financial assets of a given person, his or her level debtneeds in terms of liquidity funds and the length of the period for which they can be invested [horyzont inwestycyjny]. The answer to the question of how much loss a given person is willing to accept is also important (risk tolerance) and what it has knowledge about investments – explains the president of VIG/C-QUADRAT TFI, Michał Szymański.

He emphasizes that the risk of loss is an integral part of investing and should be taken into account in decisions made. It's easier to do this by investing in something we understand. The expert points out that it is now becoming easier to verify or obtain knowledge on this subject. For this purpose, you can use, among others: the latest, widely available AI models, such as ChatGPT, Gemini, Grok, etc. – but they can be helpful in investment education – e.g. in explaining concepts, analyzing historical data or simulations, but they should definitely not be used to make specific investment decisions.

Below we present two investment proposals (simpler and more aggressive) depending on the available capital for investment. Three assumptions are important here:

• In each case, we assume that these are investment funds
• The investor does not plan any important expenses in the near future that would be covered by these funds
• Any loss is acceptable

The asset class ranges given below are indicative and the sum of their allocation should not exceed 100%.

What to invest 10 thousand in? zloty?

We assume that this amount does not constitute a significant part of the investor's wealth. In this case, the goal we could outline is to increase the value of savings while maintaining liquidity and an educational element. So it's about simple learning of investing and diversification while gradually building capital.

Examples:

Simpler version:

• 30-40 percent — shares
• 15-20 percent — corporate bonds
• 25-40 percent — treasury bonds
• up to 5 percent – cash

A more aggressive versionfocusing on higher diversification – including international – and broader investment education:

• 15-25 percent — domestic shares
• 15-25 percent — global foreign equities
• 20-25 percent — corporate bonds
• 20-25 percent — treasury bonds
• up to 5 percent – cash

Since we are talking about a low portfolio value, it is more advisable to gain exposure to different asset classes investment funds or ETFs than direct investments – due to the need for diversification, transaction costs (especially in the case of foreign investments) and, for example, the possible need to independently select shares or bonds of individual companies. In the case of treasury bonds, you can also use State Treasury bonds offered directly to individual investors.

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What to invest 100,000 in? zloty?

In this case, the situation can be very different. For some people, this value may constitute a significant part of their liquid financial resources, for others it may be so limited that it may constitute dedicated funds for aggressive investments.

Let us assume the characteristics of a portfolio focused on sustainable growth and risk management through diversification. Practical investor education also remains important.

Simpler version:

• 15-20 percent — domestic shares
• 15-20 percent — global foreign equities
• 20-30 percent — corporate bonds
• 20-30 percent — treasury bonds
• up to 10 percent – cash

A more aggressive version, showing greater diversification and practical education:

• 10-20 percent — domestic shares
• 10-20 percent — global shares
• 5-10 percent — technology stocks
• up to 5 percent — emerging markets stocks
• 20-25 percent — corporate bonds
• 15-20 percent — treasury bonds
• up to 10 percent – cash

In the case of people for whom the amount of PLN 100,000 zloty. constitutes a large part of their financial assets, or when there are high liquidity needs or a short investment horizon, the share of treasury bonds and potentially cash or bank deposits should be much larger than in the proposals presented above.

What to invest PLN 1 million in?

We assume that in this case we are dealing with a much more conscious investor the goal is long-term wealth accumulation and diversification while maintaining some liquidity.

Simpler version:

• 10-20 percent — domestic shares
• 10-20 percent — global foreign equities
• 20-30 percent — corporate bonds
• 15-25 percent — treasury bonds
• up to 5 percent — commodity funds
• up to 10 percent — cash/deposits

A more aggressive version

• 10-15 percent — domestic shares
• 10-15 percent — global foreign equities
• 5-10 percent — technology stocks
• 5-10 percent — alternative assets (private transactions, gold, etc.)
• 15-25 percent — corporate bonds
• 15-25 percent — treasury bonds
• up to 10 percent — cash/deposits

Allocation to cash or deposits can be treated as a liquidity element and at the same time a reserve in case interesting investment opportunities arise.

In the case of a person with liquid investment assets worth PLN 1 million, a potential issue also arises real estate investment. Due to the high unit value of such an investment and the potential use of a loan, it should be treated as a separate investment project next to a diversified portfolio of financial instruments.

It is worth re-emphasizing the importance of an individual's actual risk profile. If, for example, the amount of PLN 1 million constitutes all the funds accumulated for the retirement of a person close to retirement age, the method of investing should be much more conservative – with a strong emphasis on protection against inflation and less on achieving high capital gains and the accompanying risk.

Beware of costs and risks

— Basically, when investing, we should also pay attention to the effectiveness of the way it is conducted – so that the costs and complexity did not outweigh the potential benefits or increase risks uncontrollablye.g. as a result of low diversification or settlement problems – notes the president of VIG/C-QUADRAT TFI, Michał Szymański.

He adds that the note regarding the portfolio with the lowest value of PLN 10,000 PLN, stating the preference for investment funds or ETFs over direct investments in shares or corporate bonds, often remains adequate also in the case of higher value portfolios.

– Let's always be guided by knowledge, not the mirage of quick and large profits, and let's use the services of recognized financial institutions – he points out.

*Michał Szymański is a doctor of economics, a licensed investment advisor, CFA. He has 25 years of experience in the capital market, especially in the area of ​​asset management. He is the co-founder of the current Alior Towarzystwo Funduszy Inwestycyjnych and its long-time president. Previously, he held the position of, among others, investment director and president of Aviva Powszechne Towarzystwo Emerytalne. He also worked at ING Investment Management and in the portfolio management department of Creditanstalt Securities.

Author: Damian Słomski, journalist of Business Insider Polska

Note: the information contained in the text is for informational purposes only and does not constitute an investment recommendation, information recommending or suggesting an investment strategy within the meaning of applicable regulations, or any other form of advice regarding the purchase or sale of financial products.