Wednesday May 25, 2022

Where to pay twice as much, not on a bank deposit?

In the past, the people used to raise pensions in various exotic cities, which they were convinced could not drink there. Over time, the situation has changed somewhat, today the people imagine the concept of safe retirement of pensions in the bank. As in the past, the bag was diluted. In both cases, they are late, and they don’t even know about it.

The conservatism of domestic investors is not a recent novelty and, given the past experience, I am not surprised. The problem is that the investors themselves somehow do not want to realize that it is safe and high entry do not go hand in hand. Then, wonder if inflation and fees will be swallowed up by the bank on the term deposit, not how much they spent. Neither money market funds u are not what they used to be, although for a short time it is not again and so bad npad.

A positive signal is that after a long time, horse investors have realized that they can earn money in the long run on futures or money market funds. This was certainly helped by all the results of domestic and Central European actions, and in connection with this the very good performance of mutual funds. Due to the fact that domestic investors are very likely to be influenced by past performance, they are currently risky equity funds quite in the course.

About risky investments, it is worth spending on pensions long horizon, we wrote the bag last week. Today, we will take a look at where to store pensions for a short time, when it is not so much a matter of input as of elimination. risks. Dleit is therefore quite stable, although its return and high level of liquidity. Of course, a relatively safe number of relatively safe investments is available, not all bags meet the liquidity condition, so they cannot figure here, for example. hedge funds, pp. real estate, etc. Due to the conservatism, it is necessary to exclude from investment the investment in foreign mnovmu risk talk about conservative investments.

Bonds are a security feature

Bonds have long been considered one of the safest investment instruments. They are valuable mainly because of their relatively interesting ratio of input, risk and input. Bonds At present, it takes some work in practically every portfolio, and the approach of the investor is conservative or dynamic.


Will the capital market opt ​​spn this year? Vce HERE.

The bonds themselves are not easy for small investors. Although they are currently traded on the stock exchange, as the issuers are in large volumes and the minimum investment is in the millions of crowns, the hunter will not get to them in any way. The investor had to invest in the bond through other investment products, in particular through mutual funds.

And the funds again

Depending on the bonds in which the individual funds invest, or in what proportion they are to other types of securities, they are divided into individual groups. Not all types of mutual funds are intended for conservative investors with a short investment horizon, although in addition to equity funds, there are funds in each group that can meet this criterion.

Such a typical representative of conservative mutual funds are money market funds. You can invest your fixed income in highly safe bonds, the money market tool and a large amount of cash. They are very popular in our home, although their popularity has fallen sharply recently. They are especially suitable for investors who do not want to invest pensions for more than one year, the period of which is ineffective in their case. Their advantage is, in addition to relative safety, so evaluated, not u termnovanch vklad. On the contrary, the disadvantages are low inputs, which do not even change the inflation rate.

Average ron returns of individual fund types compared to ron inflation (in%)
Year 2001 2002 2003 2004 2005
Inflation 4,7 1,8 0,1 2,8 1,9
Penn fondy 3,87 3,18 1,38 2,21 1,18
Bond funds 2,47 5,87 -0,39 5,46 3,33
Shift defensive funds 2,14 2,91 3,69 5,84 5,8
source: esk statistick ad, AFAM, investin companies

The second group of funds that invest most of their resources in safe tools are bond funds. It follows from the name that bonds have the greatest role in their portfolio, but bonds are not like bonds. There is a difference between government bonds issued by governments in economically developed countries and government bonds of developing countries. These are, of course, among the safest investments on the market, and a high return cannot be expected from them. Bonds of developing countries, on the other hand, offer you higher returns, the volatility of their returns and the risk of short-term losses are yours.

In addition to sttnch bonds, it is possible to invest in corporate bonds. You are so spilled on the bonds of the company with rating at the investment level, which are considered to be very safe and issue a large one, introduced by the company. The second group are high-yield bonds, only issued by companies that are rated speculative (BB and up). They offer you, similarly to bonds of developing countries, but you have to take some risk. According to the changed criteria, the bond funds themselves are divided, for which an investment horizon of two or three years is recommended.

Mchat pay off

Not an uninteresting alternative to changes in conservative mutual funds may be some exchange funds, which invest the vast majority of their funds in debt securities, in addition to a certain amount of money (maximum 30%). action. Although they increase the risk (but also the return), due to the better diversification, which comes from various assets, their return potential is very interesting while maintaining a low risk.

Recently, the so-called fund profiles have grown in the Czech Republic, through which the company’s investment allows investors to deposit pensions at once in the number of mutual funds. They are intended mainly for investors who do not have long-term experience with investment and choosing the right fund could be a problem for them. The selection is mostly one or three funds that are designed to meet the investor’s ideas about the risk, expected returns, or investment horizon. The names of individual funds are in most cases the same, for conservative investors it is recommended to choose especially funds marked Caution, or Conservative.

For some of the types of investments described, due to their low expected return, it is necessary to take inflation into account. In some cases, the achieved input may not even exceed the inflation rate. Although the investor has nominally issued some percentage, in the end, after taking into account inflation (possibly the fee for the first and the purchase), its relative return is questionable. So that’s not a game. First of all, therefore, when choosing them, it is advisable to pay close attention to the fact that after some time the investor does not have to decide to revise his decision, because the investment does not meet his requirements.

Are products for conservative investin products interesting? Do you think that their input is sufficient? Drink from above, we will read.

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