Freedom Holding Corp (FRHC)

[Quintessence]

Good interview with Liliya Logunova, director of the Chelyabinsk branch.

"Learn the subtleties of stock trading? - no more difficult than learning to ride a bicycle, I'm sure", said the director of the branch of IC "Freedom Finance" in Chelyabinsk, Liliya Logunova.

http://chel.dk.ru/news/idealnogo-portfelya-net-liliya-logunova-fridom-finans-237110905

Today, Freedom Finance is the leading company in the sphere of providing brokerage and investment services. Consultants act as real guides to the world of securities: they provide support for investors in access to foreign exchanges, where the shares of companies of global brands appeal, help them choose the most promising stocks and form their own portfolio. Here you can also get an alternative economic education: for those who want to keep abreast of all the nuances and get involved in the process of exchange trades as much as possible, the specialists have developed an intensive rate of financial literacy "Exchange University", within which investment and trading training is provided.

What underlies the concept of "Freedom Finance", what distinguishes it from a number of other broker companies?

- One of the key competencies that has made it possible to achieve and become leaders is specialization in foreign stock markets. We are probably one of the best experts on the US securities market in Russia. Thanks to convenient access to trading, investors were able to invest in the shares of the most dynamically growing companies: Amazon, Netflex, Google, Apple, Facebook, Twitter, Ferrari.

I must say that before Freedom Finance I worked more than 13 years in private banking in one of the largest international financial groups. I am close to the approach adopted by Freedom Finance, aimed at building long-term relations through a 3D vision of the investment portfolio. No template approach. It is significant that the company gives "stuffing", and the task of the client manager to carry out the most fine-tuning depending on the investor's expectations, his readiness for risk, liquidity requirements - the ability to quickly sell paper. There is no "ideal" portfolio that fits all without exception. Each client has its own financial plan, a specific goal, different income, consumer spending. And the pillow of financial security that they managed to create, it is necessary to save and multiply in different ways. And the task of the manager when talking to the client is to correctly and fully appreciate these nuances, and of course, it's simply impossible for one meeting.

Is the American securities market is still a novelty for domestic investors?

- In fact, in recent years, many are starting to leave the Russian stock market, changing it to American or European stock exchanges. Russian stocks have always, and especially now, been characterized by sharp and unpredictable changes in quotations. Still, our market remains largely insider, and the classical fundamental analysis that applies to a particular paper or industry is often rendered useless. Even the immutable law, which financiers are taught at the university: if the ruble rate is growing, the cost of a barrel of oil is falling, and vice versa - it is not always tracked. So investors are forced to actually play blindly, and this inevitably affects the financial result. I do not argue, there are successful stories, but this does not cancel what was said. The American stock market in this regard is less volatile, you can trade at a more measured pace. Some investors have concerns related to the time difference, but due to the fact that there are not these fabulous fluctuations (ten percent plus, and a minute later 20 percent minus), it's not necessary to be online at all times. Although there is a layer of investors who choose such a strategy. The professional platform used by "Freedom Finance" allows you to participate in trading on foreign stock exchanges directly from your phone: applications are immediately executed, regardless of the time zone, including off-market. This platform is no longer provided by any Russian broker. And when the investor learns from his own experience that the American stock market is not painful or scary, but "delicious", that is, it is perspective from the point of view of profitability of investments, all doubts disappear.

How is the situation on the American stock market today?

- If you look at the graph of the S & P500 index change, it is clear that since 1993 there has been a steady growth, if there is a drop in quotations, it is insignificant. So, during the entire 2017 there was a sharp increase, and at the beginning of this year, the expected correction occurred. Not so long ago, the largest US companies published reports for the first half of the year, and although the forecasts were not too positive, most still managed to grow.

Investments in securities of US companies are available only for experienced investors?

- Investors who have long been independently engaged in securities transactions and are well versed in the market, the company is useful access to all stock exchanges - not only in the US, but also in Europe and Asia. If the investor adheres to a moderately conservative strategy, does not have practical experience of direct trading in the futures market and does not have free time to track stock quotes, he can use the advisory department. In this case our manager acts as a personal financial adviser and does all the black work for the investor: analyzes the news background, statistics, company reports, forecasts of the largest analytical and rating agencies - and gives recommendations. An investor can give an order to buy or sell a package of papers by phone or via e-mail. At the same time, there are models that make it possible to completely secure the portfolio in the event of a stock market fall and ensure a higher yield than a bank deposit. Portfolio managers take cash for trust management, and the rules clearly state how often the set of securities is viewed and varies depending on the market situation. In this model there is no speculative trade, only a fundamental analysis: one or another paper, as a rule, is included under a specific investment idea. For example, having information that a new model of the iPhone will be released in the autumn, it is possible to assume with a high degree of probability that on a wave of interest for a month or two before the presentation, the company's shares will noticeably grow. The yield of 10% in dollars per month is a good financial result, is not it? Similarly, in December last year, before the world premiere of the new film from the movie Star Wars, 15% of the price of the Walt Disney Pictures movie company immediately went up in price. Thus, the news background flows into strategic paper growth, and if the portfolio manager and the investor have full access to quality analytics, then it can be converted into money.

And on the contrary, when there is an understanding that all potential possibilities of this or that idea have already been realized, it makes no sense to keep it in the portfolio. Large analytical agencies that conduct a deep assessment of different markets, give an expert look at the dynamics of shares of a company, determining the so-called target price, that is, the projected price. If this bar has already been reached, the portfolio manager can give a recommendation to look closely: to fix profits or choose a different scenario.

But after all, and the option that the value of securities will decrease, it is impossible to exclude?

- Of course, and placing funds in the stock market, the investor should be ready for a certain risk. On the bike, too, do not learn at once: at first a three-wheeled, then a teenager, and only after long trainings it is possible to change to a mountain or a racing one. In finance, the same thing: no sudden movements. In the head of many novice investors, there is a certain substitution of concepts - today he says: yes, I am ready for risk, and at the weekend I went to the dacha and realized: no, still not ready. And the paper is already bought, and already either up or down. Therefore, the client manager should, as a good psychologist, try to understand the investor's thoughts. After all, if the portfolio is frozen for half a year, an incorrectly identified profile will result in negative consequences and loss of reputation. Some are on the way: to bring wealthy people to a business breakfast and under the slogan "Ege-gay!" To persuade them to invest in a structural note for three years. At this time, economic war between China and the US flares up, and the papers included in the note are rapidly depreciating - and the investor, without any practical experience, will not even be able to track this information. Of course, there is a bitter disappointment.

The same story was in 2008, when all were massively involved in mutual funds. And then a crisis broke out, and investors remained with illiquid securities on their hands. The consequences of financial negligence and illiteracy are still being hoarded, many investors who burned themselves then with great caution regard new investment tools. So, I repeat, none of the managers of Freedom Finance has the task to sell "here and then," we came to the market for a long time, the company is growing dynamically, the branch network is developing - we think strategically. And in my practice there was a case when the investor, having a negative experience of investing through trust management, long looked closely at eurobonds, went to the first deal for four years. And now, as they say, you can not delay the ears: it boasts to friends that the portfolio returns about 16% per year. The time lag for the transaction is different, and there is really no need to hurry here.

Why did you decide to stay away from the crypto currency?

- The company tries to feel and see all the key trends in the development of the market, but in the case of the crypto currency, I remain a skeptic. It seems to me that the society radically overestimates both the technological potential of the crypto currency and the range of tasks that it tries to solve with its help. The very idea of ??creating corporate currencies is certainly very interesting, but, in my opinion, now the principles and technologies that are laid in the modern crypto currency are much inferior to the classical monetary system. Although many adepts of this trend are ready to argue with me, still we have come to a modern monetary system as a result of a rather long evolution, and nothing better than mankind has yet come up with.

We do not provide access to this tool in its pure form, but at the same time there are financial instruments that allow you to receive income from the growth of the underlying asset - it can be not only bitcoin, but also the etherium and other crypto-currencies. At the same time, the investor, which is important, is protected from the legal point of view, there are no difficulties in entering and withdrawing capital, as he owns a security. For this year, analysts predicted the growth of the crypto currency in a half to two times, but so far in the past eight months, this scenario has not materialized.

And in what areas do you believe?

Speaking about the American market, it is primarily the financial sector, as well as the pharmaceutical sector, where the securities of a number of companies have already grown by 50% since the beginning of the year. The financial sector, of course, shows less impressive dynamics, but, for example, Visa has grown by 25%. In addition, companies that fulfill government contracts are steadily growing and are associated with the military industry, space exploration, and the construction of aircraft.

But in general there is such a thing as emotional attachment to the brand? When you become a co-owner of a brand that has become a part of everyday life, a sign from childhood?

- Probably, this is inherent mainly to investors who are just beginning to trade on the exchange - they take papers of companies whose name is on hearing. More experienced investors, on the contrary, rely on dark horses, which can become a new Google or Apple.

By the way, the story told in "Forest Gump", when the main character admits that a friend has invested his share in "some apple company" and now they can not think about money until the very end of life, is still possible in our time?

- IPO statistics confirm this: while the most successful large companies, whose securities are placed on the exchange for a long time, can show a profit of 40% for a year or two, beginners - for a month. Young companies that have unique technologies are growing dynamically, and American, European investors are actively investing in this story. IPO results are often shocking. In a good sense of the word.

Because of the constant increase in the tax burden, the decline in effective demand in many areas, the yield has seriously subsided. Business does not bring such profit as financial transactions. Therefore, many entrepreneurs today reduce the infusions into their own companies and gradually move into the ranks of investors. And an increasing number of companies do not keep temporarily available funds without moving on the account, but invest in securities and benefit.