Create Your Investment Process

Happy Monday, wealthy people! 

Over my 15 years in the wealth management industry, I have interviewed thousands of fund managers to find the “best” managers who could outperform. I would evaluate these professional investors on their investment philosophy and process.

Investment philosophy is a fund manager’s belief about how to best profit from the financial markets. For example, it could mean investing in growth stocks, small companies with good valuations, or international real estate.

No matter what a manager’s investment philosophy is, they need a robust investment process to execute it.

Read more to find out how to create yours.

In today’s email:

👉 Stock Market Update 

👉 Investing Strategies - Create Your Investment Process

👉 Ask Me Anything - Can I buy shares in an IPO?

👉 Sip of Learning - 3 Ways to Invest in International Funds

Grab your latte and let’s get started!

Margarita T., CFA

Founder, Finance Latte

Join us in Stockholm for an in-person coffee chat discussion on how to create your investment process. Register here.

Want to join virtually? Drop us a note by responding to this email.


Create Your Investment Process

Let’s assume that our investment philosophy resembles Warren Buffet’s:

Buffet is a value investor, which means he want to pay a reasonable price for stocks, focuses on companies with straightforward business models and high free-cash-flow, and has a very long-term horizon.

That sums up the investment philosophy.

The investment process is about what steps we would take to consistently implement this philosophy.

👉 Find New Ideas

A good system to consistently find new ideas is a must in any investment process, whether you’re an individual investor or a professional one.

So how do we find new stock ideas?

There are the 11,000+ stocks listed in the US, 2,700+ stocks in the UK and thousands more across the world. How do we narrow down the list?

  • We can use “stock screeners( has an easy-to-use free screener) to filter the list by country, sector, low valuation ratios, high free-cash-flow, and any other “factor” that is relevant to our investment philosophy that we defined earlier.

  • Through investment research. Maybe when we were analyzing a beverage company we found that their staff raved about their brand new logistics company. That logistics company could become a new investment idea.

  • We read the news and write down stocks that catch our interest.

👉 Research & Due Diligence

Once we have a list of potential new ideas, it’s time to roll up our sleeves and do the fundamental analysis to find the best ones.

  • Understand their business model

  • Read their financial statements

  • Do valuation analysis

  • Speak to their end customers, suppliers, employees, etc.

👉 Portfolio Construction

Alright, let’s say we found 2 new stocks that we want to invest in. Next we need to think of these two stocks versus our existing portfolio.

  • If the new stocks are in tech, do we already have plenty of tech in our portfolio?

  • Is the upside potential from the new stocks higher than what we can get from our existing holdings?

  • What holdings must we sell to make room for these two new investments?

👉 Buy/ Monitor

Woop! We decide to buy them. Then it’s time to get practical:

  • Do we buy them at once or a few shares at a time?

  • Do we wait for a specific lower price?

  • Once we buy them, we monitor their performance vs. our expectations.

👉 Sell

Knowing when to sell is one of the hardest parts of the investment process. We sell when:

  • A stock or investment rises so much that there is little upside left.

  • A stock turns out different than what we expected.

  • We find better ideas with more upside.

How often do we take these steps?

How do we keep track of them?

Join our upcoming event to find out!


Question: “Can I buy shares in an IPO?”

– Margi M.

Answer: “Individual investors may be able to buy shares in an IPO, but it all depends on your country and the IPO in question.

In the US, typically IPOs are offered to “Accredited Investors,” who meet certain financial criteria, including more than $1m net worth, excluding their primary residence.

One exception could be when you work for a company that is going public and had been offered shares as an employee. Another exception is when you angel-invested in that company early on.

Outside the US, access to IPOs is somewhat easier for individuals but it still depends on each case.

If an IPO has high demand, then typically, institutional investors (e.g., fund managers, pension plans, etc.) will get priority, so access to individuals might be limited.

Individual brokers/ trading platforms will have their own periodic offerings. Check the website of your trading platform to see if they have any IPOs coming up.

And as always, ensure you read through the terms, such as price limits, lock-ups, etc. before you commit your capital.”

– Margarita T., CFA

Got a question for me? Ask it by simply responding to this email.


🗞️ Katie Tassin writes another excellent article on the hypocrisy of #Tradwifes. Google this hashtag if you want your jaw to drop. 😳

📚 Cool Dictionary of Blockchain and Internet Terms by VC firm Andreessen Horowitz.

🗞️ Former “crypto King” Sam Bankman-Fried will be sentenced on Thursday.

🎯 Free Resource: Try our Introduction to Investing digital course.

Finance Latte AB is not a registered investment advisor. This content is for informational purposes only and should not be interpreted as investment or tax advice. Investors should make investment decisions based on their unique investment objectives and financial situation. While the information is believed to be accurate, it is not guaranteed and is subject to change without notice. Past performance does not guarantee future results. Market indexes are unmanaged and cannot be invested into directly and are not meant to depict an actual investment. From time to time Finance Latte AB might include affiliate links in its newsletter or website where we might earn a commission if you subscribe to a publication, or purchase a product you found through us at no extra cost to you. We will not promote any type of investment product, and will only include non-investment/non-finance services or products we believe in. View our Privacy Policy and Terms of Service.

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