YEREVAN, November 21. /ARKA/. Interest in financial markets is growing in Armenia, and more and more people are thinking about how to build long-term capital. Many don’t know where to start or how to avoid mistakes. To understand approaches to long-term investing, ARKA spoke with Ashot Martirosyan, a financial consultant at Freedom Broker Armenia.
ARKA – Long-term investment management is often discussed these days. What time horizon do you consider truly long-term – 5, 10, 20 years?
A. Martirosyan – It all depends on your goals. By starting to save at age 20, by age 40, a person can accumulate capital that they can use to their advantage. Therefore, I consider a 20-year horizon truly long-term.
ARKA – Where should someone considering long-term investing for the first time begin, and what are the most common goals of investors choosing a long-term strategy?
A. Martirosyan – It’s important to understand the available instruments and assess their risks. Beginners should start only with low-risk instruments and not expect quick results. Discipline, consistency, gradual investment increases, and reinvestment of profits are key.
ARKA – How has the investment philosophy in Armenia changed in recent years, and what role have brokers, including Freedom Broker Armenia, played in shaping new investor habits?
A. Martirosyan – Previously, clients were only interested in deposits, then bonds. Now, even conservative investors are considering riskier instruments. The growth of financial literacy is evident, and we, together with Freedom Academy Armenia, have made a significant contribution to this.
ARKA – What does a “balanced risk level” mean in professional practice? What parameters do you consider when determining this level for a client?
A. Martirosyan – Let’s look at bonds as an example: government bonds are a low-risk instrument, but part of the portfolio can also be invested in corporate bonds for diversification. Bonds in various currencies are available on the market, and the right combination of instruments helps balance return and risk.
ARKA – What typical mistakes do investors make when trying to independently determine their risk profile?
A. Martirosyan –The main misconception is expecting quick profits. Beginners don’t stick to the investment deadline and, having seen no income for several months, withdraw their funds. However, the main income usually begins to form in the fourth year.
ARKA: Which instruments today effectively minimize risks without significantly reducing potential returns—ETFs, bonds, diversified portfolios?
A. Martirosyan – A diversified portfolio can include bonds and stocks. When mitigating risks, it’s important to focus on credit ratings. In 2022–2024, early exits from ETFs resulted in negative returns, demonstrating the importance of instrument selection and time horizon.
ARKA – How critical is diversification in long-term strategies? Do you have basic principles for constructing a diversified portfolio?
A. Martirosyan – If you choose a bond with a high credit rating, you don’t need to diversify your portfolio. But if the goal is to achieve returns above benchmark rates, it’s worth including corporate bonds in the portfolio.
ARKA – Are there universal asset allocation ratios (e.g., 60/40), or is everything strictly individual in the current environment?
A. Martirosyan – It’s individual. But I recommend investing only in bonds for the first two years, reinvesting the interest, and then adding riskier instruments, depending on the portfolio’s size and performance.
ARKA – How do global factors—geopolitics, inflation, interest rates—affect the long-term strategies of Armenian investors?
A. Martirosyan – Geopolitics can influence long-term investments, so geographic diversification is important: some funds can be placed on exchanges in France, England, the US, and other regions.
ARKA – Is it worth revising the portfolio when market conditions change, or is it better to maintain the strategy until the end of the horizon?
A. Martirosyan – It needs to be reviewed. Investor income fluctuates over time, and the portfolio must be adjusted. The horizon can be maintained, but the risk level and portfolio structure must be reconsidered.
ARKA – What behavioral mistakes most often prevent investors from maintaining discipline during periods of high volatility?
A. Martirosyan – The main problem is emotional decisions. Success comes to those who maintain discipline and understand that value is created over time, not in a matter of weeks.
ARKA – What tools, technologies, or analytical services does Freedom Broker Armenia use to help clients maintain a balanced strategy and manage risk?
A. Martirosyan – This involves ongoing market analysis, international exchange data, and macroeconomic indicators. Comparing economies allows us to assess the situation and make the right decisions. But the decision is always made by the client.
ARKA – How can you calculate the results of long-term investments?
A. Martirosyan – Using the Future Value (FV) formula, you can calculate the investment result taking into account your financial capabilities, as well as monthly and expected interest rates. For example, a 20-year-old who invests $100 monthly at 10% per annum could accumulate approximately $76,000 by age 40, of which $24,000 is their own money and the rest comes from market returns.
ARKA – And finally, what are the three key principles essential to successful long-term capital management?
A. Martirosyan – First, maintain a connection to reality and don’t expect instant profits. Second, discipline. Third, continuity: regular investments and reinvestment ensure capital growth.
Freedom Finance Armenia LLC is regulated by the Central Bank of the Republic of Armenia.
The materials posted in this section are published for informational purposes only, are addressed to the Company’s clients, and do not constitute individual investment advice or an offer to invest in financial instruments of various companies.
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Past investment results do not guarantee future returns. In accordance with applicable law, the Company does not guarantee or promise future investment returns, nor does it guarantee the reliability of potential investments or the stability of potential income.
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