From shares to portfolios: How to build a resilient investment strategy

WHAT it really means to own a share?

- By Umair Ismail, CFA

Should one think like an owner or a speculator.But ownership of a single company isn't a plan. The real question is: how do you turn ownership into a strategy that grows with you over time?

When I advised clients in New York, one principle guided everything: Make sure your money lasts as long as you do. With life expectancy rising and living costs creeping up, most people underestimate what retirement truly requires. The biggest risk isn't a rough quarter in the market; it's running out of money while you still have decades ahead.

Where does risk actually come from?

Thinking like an owner is powerful, but ownership carries risk. A single stock can be hit by idiosyncratic (company-specific) risk, a product recall, a governance failure, or a debt problem. And that's only one layer. A practical way to think about risk is in four tiers:

Country risk - macro shocks that affect everything in the country. We saw this during the economic crisis: equities fell broadly, and the sovereign default drove bond prices down. The currency devalued, and overnight affordability was halved.

Market risk-Factors like inflation, interest rates, and recessions that move entire asset classes (equities vs. bonds) irrespective of the country. Holding cash during inflation will reduce your purchasing power.

Sector risk-Industry-level shocks. After the Easter attacks, tourism revenues plunged; hotel earnings fell; equity prices dropped; and lenders marked the sector debt down.