How does Selma invest my money?

Updated by Kevin Linser

When setting up your investment mix, Selma has a look at your current financial situation, your future savings potential and how much risk you are comfortable with. This is all included in your Selma investor profile and provides Selma with the basis to structure your investments.

What Selma has a look at:

  1. Your current financial situation 
    Selma looks at your existing investments, be it real estate, stocks, bonds, jewelry, luxury cars or ownership of a company.

    Besides to that, Selma takes a look at how much debt you currently have, if you have a mortgage to pay back, or if you already know certain expenses you will have in the close future. Eg. buying a car, apartment, an around-the-world-trip, or elite private school for your children.

  2. Your savings potential
    How much money your savings until retirement are worth today. This is calculated based on how much you are able to save currently.

    Selma calculates the total savings including a growth rate dependent on your age, the type of your work and the stability of your income. The savings potential of a 27-year-old freelancer with fluctuating income is quite a bit different in comparison to a 43-year-old university professor with fixed monthly salary.

  3. Your relationship with risk
    Beyond your ability to take risk, Selma evaluates how comfortable you are in taking risk. We make sure you don’t take much more risk than you like and refine your investment planet. Selma does this by combining an initial self-assessment with your emotions and reactions to loss scenarios. To better account for your relationship with risk, Selma compares your risk willingness to statistical average in your home country.

What Selma measures:


Based on your investor profile, Selma calculates:

  • Your net wealth
  • Net financial assets
  • Your ability to take risk
  • Your risk willingness  
  • combined risk score

Besides that Selma automatically takes first decisions on how to invest or which types of investments need to be excluded to avoid cluster risks. E.g. If you already have invested in real estate, you should not further invest into that area.

Selma’s investment strategy

Selma uses proven financial models and research of the Nobel prize winners William Sharpe, James Tobin and Robert Merton to provide you the optimal investment mix based on your investor profile.

At Selma, we work with a passive investment strategy. This means that Selma doesn't try to find stocks and bonds that will beat the market but rather buys shares in the whole market. This optimizes the returns, spreads risks and keeps the costs low.

Based on your investor profile Selma calculates how your investments should be structured and classifies your strategic investments into:

  • a global risky portfolio -  reflecting global investments. This Includes global stocks, bonds, high-yield bonds, commodities (excl. precious metals), private equity and real estate (excl. domestic real estate)

  • and a “risk-free” portfolio - This includes assets classes which have a long-term preservation of value: government bonds of developed countries (currency hedged in investment currency), domestic real estate, cash in home currency and precious metals.  

The composition of each portfolio is based on current market capitalizations. Selma regularly checks and adjusts to changes in market capitalizations.  


How Selma selects investment products

To create the strategic allocation Selma uses exchange-traded funds. They are selected based on qualitative and quantitative criteria. Selma has a no-kickback policy and is 100% dedicated to your best interest. Selma always chooses the products which it finds to be best and most efficient, independent of the product provider.  Read here how Selma selects products.


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