• A bank deposit is, in reality, too conservative a choice, depriving the investor of liquidity—early withdrawal will lead to a loss of interest.

• By relying on random broker recommendations and their own market views, an investor ends up with a random assortment of assets, not a portfolio in the investment sense. The key qualities of a sound investment portfolio are proper diversification and alignment with the investor's risk profile. A random assortment of assets, however, can result in portfolios that are either far riskier than the investor can afford or, conversely, far more conservative. When selecting assets independently, the investor gets bogged down in the meaningless media noise from analysts and brokers, reading uninformative analytical and broker reports. The investor moves away from the concept of index investing, whose returns are nearly impossible to beat in the long run. At best, this experience ends in a loss of time—one of the most crucial investment assets—which will then be needed to recover the portfolio's value or recoup missed opportunities.

• External investment products, such as mutual funds or structured products, are also not a good solution. In this case, the investor transfers control of the assets to third parties whose personal compensation is tied to the performance of the assets under management. Besides losing several percent per year in management fees within the fund, the investor faces a conflict of interest that pushes the fund manager to consistently take on higher risk, also deviating from the index investment model. As for structured products, they are options in essense. However, a long position in option is a hedging instrument, with a probability to expire in the money during its life being no more than 25-35%. Structured products are the most marginal products in the investment banks' hands, leaving investors with lost time and opportunities.

• Finally, premium services come with even higher fees and the obligatory use of other bank or insurance services, which are often far from optimal in terms of cost and quality.

Unfortunately, most investors make an irrational choice by channeling their savings into one of the paths mentioned above. Primarily, this is due to a natural lack of understanding regarding risk tolerance and how to select a portfolio that aligns with their risk profile. Other reasons include a lack of experience, exposure to aggressive advertising by brokerage companies, and the fear of losses. So, what choice is the most rational?

Rational investing has three key aspects. The first is to ensure the portfolio's risk fully corresponds to the investor's ability to bear it—both mentally and financially. Market crises should not come as a shock or force a change in one's lifestyle. The second aspect is that the investment portfolio should have the optimal risk-return trade-off. And the third is that the costs of maintaining the portfolio must be minimal. In rational investing, the first aspect is addressed through risk profiling, the second through mathematical optimization, and the third through the independent management and maintenance of the portfolio without relinquishing control over it.

The quality of a portfolio's mathematical optimization also depends on the asset groups to which it is applied. Index investing minimizes the impact of individual corporate events on the probabilistic parameters of the entire index, enhancing the predictability of investment modeling.

The IskraIndex investment approach seeks to rationalize the investment process by solving most of the problems an investor faces.

When working with Iskra Index, the investor will:

• Obtain a portfolio optimized for their risk profile.

• This portfolio will have the optimal risk-return trade-off.

• Avoid the influence of subjective factors in portfolio construction.

• Eliminate unnecessary intermediaries such as fund managers, financial advisors, and informational noise.

The IskraIndex solution leaves only two intermediaries in the investment process: itself and the broker, as an unavoidable element for portfolio formation. Furthermore, the cost of this solution becomes negligible for portfolio sizes comparable to the value of real estate in the center of any major city.