Investment Canvas Academy

When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients.
Warren Buffett, American investor, CEO of Berkshire Hathaway, considered one of the most successful investors in the world

Most financial advisors and professional investors
perform below the market!

Why? Because they must justify their job by taking action. And taking action creates costs – costs to pay the salary of the person and costs for the trade.

So what do you learn in the Investment Canvas Academy?

Even as a beginner in investing, you are probably better off investing on your own! We put a lot of effort to provide you an on the point and interesting read, this website shall be a guide for everybody - investing for dummies and experienced investors. Enjoy and let our community know if you have ideas for the continuous improvement of the Investment Canvas. You are now a part of it!

Become financial independent

1. Everybody can learn to invest!

Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.
Peter Lynch, American investor, averaged 29.2% annual return, created the best performing mutual fund in the world

This homepage was built with the idea to help everyone understand his investments better and not to be solely dependent on advice from financial consultants or banks, who mainly optimize their own profits.

In my professional career, I developed many businesses drafting the first strategy with the Business Model Canvas. I started considering my own life to be a business but found that the tools available do not suit to make an investment strategy.

I talked to many friends who work in finance and started to find out which underlying mechanisms influence the market in the long-term and how to invest with the knowledge that an individual investor has. After all these talks, I found that the most important thing is to have a consistent strategy that you follow and not be misled by short-term market movements as well as using instruments that are cheap and reduce the risk.

Next, I started drafting my ideas and ended up with the Investment Canvas. I showed it to my friends and they told me it was too good not to bring it to other people, and this is how I ended up here. I am trying to follow some principles, they are:

  • Look at the long-term strategy and not be influenced by a downturn of the market
  • Accessibility and focus on investors who do not have all knowledge yet
  • Be independent, this is my special point of interest
  • Reduce costs to increase profits! Do not give your money to others who will sell you the most expensive stuff
  • Take diversification into account to reach the minimal level of risk possible

There is no alternative to investing if you don't want to lose money due to inflation

Inflation is the one form of taxation that can be imposed without legislation.
Milton Friedman, American economist who received the 1976 Nobel Memorial Prize in Economic Sciences

There is no alternative to investing, even if you only want to secure your money, not even make huge profits! Current bank interest rates do not allow you to build a fund saving strategy with cash deposits. Also, neither a bank account nor gold is 100% safe.

As we saw in the 2008 banking crisis, banks can go bankrupt and your money may sail away. And who knows if gold will remain the international standard? The real demand due to the application in electronics or jewelry is much lower than what is actually produced; the demand and price come from people who want to back-up their wealth. Therefore, there are two reasons why you need an investment strategy:

  1. You must diversify your wealth because you never know what will happen in the future, and if one asset goes down, usually another goes up!
  2. With the low interest rates and the inflation, your money on the bank account is actually devaluating, the only possibility to build up personal wealth is investing!

Financial consultants mostly look at their profit and not yours!

If you’re so smart, why aren’t you rich?
Introduction of The Riddler in Batman

For sure your financial consultant or bank will tell you the same, but what then happens is that they will try to sell you overpriced products, where they receive the highest margin. You might pay an additional 5% to buy a fund or an annual fee, which is too high. Therefore you must at least understand, what they are trying to sell you, even better is when you are independent of financial consultants (we can suggest you reliable financial consultants if you want to). It is quite surprising to see that there are so many people working in the financial industry which promise you great profits, meanwhile, most of them are not specifically rich. Most people in the financial industry do not achieve higher returns than any individual investor, therefore you are your best advisor yourself!

In my personal story, I went to a financial consultant at my bank in 1999, when I was 14 years old. I put all my savings that were given to me from my grandparents into stocks, about 4000 Deutsche Mark – at the worst possible moment in time at all-time-highs. The financial consultant did not even bother to explain to the 14-year-old guy what was happening and promised me that stock prices will continue to go up as they did before. The unenviable happened only about 3 months after I bought the stocks – the dot.com bubble burst and the money basically vanished. I went on to make my own investment strategies and went back again several times to banks to check if their behavior had changed – it has not changed until today. The bank and the financial consultant always act in their own interest, this means to sell you the financial products where they earn the most!

Financial consultants are more expensive than the additional return they (sometimes) bring!

If stock market experts were so expert, they would be buying stock, not selling advice.
Norman Ralph Augustine, U.S. aerospace businessman

It is proven, that there is literally no financial consultant in the world that has a performance that is higher than the average return on the market plus the extra costs that he charges you. What does this mean in return? To achieve over average results you have to save the costs on the financial consultant. So, if you want to work with a financial consultant, you for sure are going to pay for it. We will also support you to find trustful and worthy financial consultants if you wish so.

Technical chart analysis and historic evaluation do not predict the future!

Thousands of experts study overbought indicators, head-and-shoulder patterns, put-call ratios, the Fed’s policy on money supply…and they can’t predict markets with any useful consistency, any more than the gizzard squeezers could tell the Roman emperors when the Huns would attack.
Peter Lynch, American investor, averaged 29.2% annual return, created the best performing mutual fund in the world

Very often, you meet highly qualified engineers or natural scientists in the financial industry. By their background, they are used to solving any problem with a formula and as this is the reality for most problems in science and nature, it does not work in the financial market, they have overwhelmingly high self-esteem. Based on their thought pattern they make unrealistic assumptions and the formulae do not work anymore. However, this can only be proven when it is too late – when the algorithm did not work. The algorithms are usually based on the past and constructed to exactly replicate the data from the past, therefore at the moment of development they are a self-fulfilling prophecy. Furthermore, all published approaches that work are copied by many people which makes the strategy not work again. As Warren Buffet put it: “If past history was all that is needed to play the game of money, the richest people would be librarians.”

More complex financial products are not necessarily better!

Life is really simple, but we insist on making it complicated.
Confucius, Chinese teacher, editor, politician, and philosopher; his philosophy is known as Confucianism

Complexity is not only coming from decision makers but also from laws and regulations. Regulatory agencies have their function and are necessary but they also take away a part of the profit, this especially accounts for pension funds and insurances. In investing, the big ones do not eat the small ones but the faster the slower. Therefore, you as a single person have considerable advantages to achieve more than average returns in contrast to big organizations and funds.

2. Everybody can learn to invest online, but be aware of fraud!

Invest in yourself or no one else will.
Saying

Yes you can, but there are many scams on the internet, that want you to pay for stock newsletters or buy products that are not transparent. Other scams want to sell you courses in trading that you pay for. If they were so good, they would make their money in trading – and not in taking it from your account for courses that do not make sense – the money should be going into your investments, not into courses! We built this homepage with the intention to be a trustful source with advice on investment in different categories. We are completely free of charge, independent and objective.

The general advice for investing is that you should always look at the long-term perspective. In stocks, many are trying to sell technical chart analysis or day trading to you. There are considerable disadvantages to this and therefore you should not engage in this kind of activities:

  • You need access to the most up-to-date data – you can only lose this race against the big traders!
  • With every trade you have to pay fees for the trade, by nature this will reduce your profit considerably!

With the investment canvas, we want to encourage you into long-term investments. Besides stocks, we will also explain other means of diversification to give you an overview of all possibilities for you to invest – however stocks always play a role in this.

The skills necessary to invest are not extraordinary!

You only have to do a very few things right in your life so long as you don’t do too many things wrong.
Warren Buffett, American investor, CEO of Berkshire Hathaway, considered one of the most successful investors in the world

The following articles will show you that you can achieve results better than most fund managers or financial accountants. How does that work?

  • Emotional stability is important to not panic when a short-term event happens and your investments go down for a short time.
  • You do not have to be the smartest, it is enough if you are not the most stupid!
  • When you are relaxed and look at the long-term you can make much better decisions than a fund manager who has to make decisions under stress, has to justify his short-term results and is limited in his investments due to regulations.
  • Always be critical, many people make news in their own interest and not in yours! You are your own best friend!
  • Understand how people think: Prices are made by people and machines. People follow other people so tendencies in the market tend to be more extreme than they should be based on the facts. This is called the “momentum effect”. Also, many algorithms are used quite widely in industry to predict prices, when everybody uses the same tools, the prices are made by the tool and not the market. Therefore it is crucial to not only rely on a number but also on feelings on what is happening on the market at the moment.

You do not need expensive online courses to learn investing

It is not necessary to do extraordinary things to get extraordinary results.
Warren Buffett, American investor, CEO of Berkshire Hathaway, considered one of the most successful investors in the world

First of all, you ended up at investmentcanvas.com, we are here to give you all the knowledge that you need to start your investment. We do not believe in all the providers of services that want to sell you courses, if they knew how to make money in the market, they would not need to set-up these courses. Secondly, you always need some level of knowledge, however, we will find a strategy that suits your level of knowledge as well as the spare time that you have left. There are always investment strategies that will let you allow to go with little knowledge and little time and over time they do not perform so much worse than other strategies. So after all, with any level of knowledge and very little spare time you are in the right spot!

3. Investmentcanvas.com explains to you how to do your strategy, investment and controlling!

Contents of the investment canvas tool
Crafting a business model is no different. Ideas placed in the Canvas trigger new ones. The Canvas becomes a tool for facilitating the idea dialogue—for individuals sketching out their ideas and for groups developing ideas together.
Alexander Osterwalder about Business Model Generation that inspired the Investment Canvas

Until we started with this homepage, it was very difficult for us to understand how we can diversify our money and how we can have the minimum amount of costs associated. Therefore we started to do our own research and based on this we established investmentcanvas.com. Therefore what you will find here is the following:

  1. Firstly, we will show you how to build your personalized investment strategy with the investment canvas. You can build up several canvases with different goals and time horizons and address the differences by the risks that you are willing to take.
  2. Secondly, we will show you how to use the Investment Canvas in the Academy.
  3. Thirdly, we will explain all relevant terms in the encyclopedia.
  4. Fourthly, we will bring articles about how to actually implement your strategy as well as the latest developments in the Guide.

To get you into the topic, we structured the Investment Canvas and the academy in three topics:

  1. Strategy: Understand what you want and define how you can get there
  2. Investment: Choose the investments, rules and platforms that you want to use
  3. Controlling: Get into a regular process in which you check and revise your decisions frequently. If you wish, we will remind you, when to do so!

4. Summary

Infographic with a summary of this page

Let's sum it up! It is just better to have your finances under your control, advisors tend to sell you overpriced products as they receive more money if you buy a more expensive product. In the end, this will result in less return for you! Keep it simple, invest with a long-term view! You will see how to find your personal strategy in the Investment Academy that will explain to you how to define a strategy, how to invest and how to control the investments.

Learn in Chapter 1 about the basics of investing:

Chapter 1 "Basics of Investing"