If oročite 100,000 Kuna for 10 years you have 170,000!
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However, no money is no longer safe! The U.S. can naštampati dollars to a euro area can be dissolved. The only alternative to save you a typical Croat knows - Investing in real estate. Stocks are generally perceived as more sophisticated and more dangerous variant of betting. Popularity of them is particularly messy break down after the stock market 2008th - 2009th, and all the circumstances that accompanied it: the collapse of investment funds, "cracking" mortgages, exposing poor business models of some stock panache ... Meanwhile, reputed analysts - with no real investment knowledge and experience - the people fear the sensational narrative of negative news from the world's stock exchanges. For the easiest way is to draw attention to dramatizing the negative.Weakened Interest
Many wealthy people are not satisfied with squats money in deposits. They feel that the interest in Croatia - by 2.5% higher than in Germany - just a valid compensation for the somewhat higher risk of Croatian, and the actual yield, adjusted for risk, actually no. A problem with this euro, the solution did not take him abroad for a miserable interest.Ads by Google
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Therefore some, upset over the options, the long-term savings segment, ie investment, however, opt for the property. They find it a bit risky investment "guaranteed" long-term returns, "especially if it is a first class property." Because of ideological dogma conditioned wrongly allocated assets: too much property and too little in stocks! I'll show the rest of this article why it is increasing investment in equities seems uncertain actually rational investment decisions. But let us stick to real estate.
First, ideological conditioning.
In socialism were the only way to gain some well-off, without the clutter of "why". Then, socialism is based on the distribution of value created elsewhere. He formed the consciousness of adults in it, and they even aware of their children. And many still do not understand that the value creating activities of capital in conjunction with the work - a profitable business activities. People do not understand that the share of firms can be more profitable and safer than real estate, and the socialist indoctrination and do not understand the concept of allocation of investment classes, or a reduction in dispersion of investment risks. I would mention the annuitant mentality of many wealthy people, which follows from the way they acquired wealth in the new Croatia. They, therefore, primarily in order to protect their capital, real estate seems to be ideal for this. It is true: you can touch it, look at and rely on it. One only has to wait for it "for itself". However, the risky real estate investment class, as we see now in Croatia. Many hope that this is only a short-term disorder. But it could be that it is not. Let's look at the following conditions.Reduction in population
It is important to note that this analysis is in principle, there are some places on the Adriatic, or really special properties that do not obey the general market trends.
For starters - Megatrend reduction in population. He has several aspects. The first is to reduce the population itself. There is less people in Croatia and it will continue. Then, the older people die or are moving into homes and exempt property in better areas. The heirs are often sold. The disorder in middle or upper class property is transferred and the highest class. Third, with entry into the EU the most promising Croats in the labor market will be easier to move out, so will this, the most potent of the first layer of customer property falter.
The most important aspect however is a marked reduction in the number of marriages and children born in the last two years. The correlation with the number of required new housing can easily be detected (Fig. 1).
This is not about being the first, the chicken or the egg. These variables are interdependent, jointly depend on the growth of GDP, and about them, and form a trend that is reversing hard.
A decline in births, the main impetus "to create a family nest", is even greater decrease in the number of marriages (Figure 2).
The state is well known. Official projections of the Central Bureau of Statistics as in Figure 3 Other reasons for not favoring the market. For example, much of the demand is met at the time of false prosperity and cheap credit, and many unsold flats. However, still being built! In the mass segment, often because of the already incurred costs, choosing the lesser evil. In fact, for some projects, land purchases, licenses, paid and free the construction industry, in abundance. Therefore, it is better to build than to wait and do nothing. Builds up in the villa segment, but probably because some of the richer citizens, "itchy" money in the bank now offers a lower interest rate than before, so you want to fertilize, and that is what they know. Many were the first time in my life seen that prices can fall, so the middle class became more cautious in buying. On the other hand, rent luxury houses are all less because it was all over. This, of course, lowers the price of houses themselves.
Unfortunately, the party alleged to be "bought" our real estate when "we join the EU" is actually a mirage. Increasingly difficult to acquire "big hunt", that she needed to buy the second, third or n-, and "better" properties. Domestic demand and in this segment decreases.The threat of tax
Legalization of property will significantly increase the supply in many market segments, particularly in the Adriatic. And finally, the threat of property tax is hanging over our heads to those with more property and more cautious among them probably already thinking about selling. When it all boils down, the property does not look particularly attractive.
As for stocks, so who is it crazy to think about them in these times, is not it?
But let's look at what was recently written by Dr. Konrad Hummler, Managing Director of the oldest Swiss Bank Wegelin & Co.., A partner who is liable for the personal property of the bank, and also president of the Association of Swiss private bankers. We would say: certainly informed and conservative type! In July this year, Hummler said: "As far as possible (worst) scenario 'blood-red abyss', stand by its recommendation that 30% of total assets, as a form of insurance, holding invested in real assets," and for those who do not know how to explain that these are companies (certain types), or shares in them. Hey! It is not possible to najkonzervatniji type in the world recommends that as a form of insurance buy shares?
The shares are an excellent investment instrument, which - in the context of the dispersed, especially long-term portfolios - can significantly increase yields, but also reduce the risk, know virtually all professionals in the developed world. Allocation of pension fund assets in some countries of Europe, according to the latest available research Mercer, we can see in Figure 4
Fuse risk
For Germany, the guaranteed payments to exclude funds that are not relevant because the payments must be accurately defined the majority of assets invested in bonds. As we see, although these funds may invest in real estate, stocks them is much more important investment class. And yes, they have much more stock in the portfolios of our pension funds.
But even supposing that it was reasonable to invest in stocks, do not ZSE particularly uncertain, speculative position, low liquidity, subject to the vagaries of pension funds and mindless lamatanju speculative traders who behave like lemmings, but it determines the prices of individual stocks, regardless of their real value? I do not claim the right to regular columnists, financial experts? It's all true. But most important is to know: low price is the best circuit of the risks, not the alleged "first class".
Precisely because of the irregular fracture on the Zagreb Stock Exchange, prices of many stocks are incoherent. Some are still too expensive. Others are probably too little, and also a great circuit and against the most radical outcome of the crisis.
Some of them are very profitable, with excellent growth prospects and the majority of export earnings and the assets or income that does not depend significantly on the risk Croatian, as in the case of credit rating downgrades or even bankruptcy of the state. The top five stocks in CROBEX grew this year to the day of this writing, between 25% and 92%, if we consider the dividend! And, believe me, they were with a little logic, relatively easy to recognize in advance because it is the companies which manufacture, tourism and agriculture, where there is a significant positive change, and according to many parameters, price is much lower than comparable companies in the EU.Leader in the growing
For illustration, we quote only the absolute leader in the growth rates, Valamar Adria Holding (VAH), the former home of a holding company, trading symbol KORF-RA, which this year is appreciated entire 92% - it should not be confused with its majority shareholder Valamar holding. For objectivity, I should point out that a significant shareholder in the company and this is not a recommendation to buy or sell these shares. VAH has more than 70% stake in Adria Riviera, Croatia's largest tourist firms with 12% of all categorized accommodation capacity in Croatia, which operates in Istria, Dubrovnik and the island of Krk. There are also some financial assets and little debt. These financial assets, net of debt, worth about 200 million. And how is the exchange value of the whole VAH-and below 500 million, it follows that more than 70% in Adria Riviera evaluated with only 300 million! Adria Riviera, of course, with all the tourist facilities, perhaps the most valuable real estate company in Croatia. But she has a huge profit. In the first nine months of its actual income is less-formal accounting for pretumbacija the merger - was almost 150 million, more than 60% above the comparable profit last year!
Do you see the absurdity of the situation now? Many will say that even the expensive real estate a safe investment, and therefore will not consider a stock-VAH, "because the shares are unsafe," and it's actually very cheap, considering the book value, and highly productive property, which would probably even in the event of bankruptcy Croatian soon found its buyer. Germans, Russians or Chinese, whatever. Unlike many "first class" property in the Croatian cities. And these stocks, which are significantly cheaper than comparable companies abroad, in which significant changes occur, and that depends a little on the sovereign risk is more. I think that is dispersed portfolio invested in such companies are the best protection against the risk and also provides excellent potential for yield.
