Czech and Slovak wealthy people were not disturbed by the advent of the coronary crisis, and generally adhered to their original investment plans. Since the last massive market declines in 2008, with a bit of exaggeration, millionaires have grown up in investment, did not panic and entered the crisis better prepared. About a quarter of them said they did not let themselves be pulled down even by the sale of other investors. On the contrary. With falling prices, they bought more. Global financial incentives also called for their strategies to strengthen their positions on both the foreign and Prague stock exchanges.
Approximately one third of the rich (32 percent in the Czech Republic, 38 percent in Slovakia) described foreign stocks as an interesting investment, in Slovakia even as the most attractive investment today. Every tenth Czech dollar millionaire described the shares of Czech companies as an interesting investment.
“Record-sized and promptly introduced fiscal and monetary stimuli helped stock markets return very quickly from the March koruna to the bull market and subsequently erase all pandemic losses on many stock indices,” said Petr Sklenář, chief economist at J&T Bank.
In addition, according to him, expectations of a high level of central bank intervention in the market with the tolerance of higher inflation, similar to expansionary fiscal policy, support the expected appreciation of shares in the future.
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Investment flats are holding on despite higher prices
According to approximately two-fifths of Czech and Slovak millionaires, one of the most interesting valuations is in building land. Investors have long believed in real assets as a means of securing wealth. About a fifth of them support agricultural land, and residential real estate is at the top of their portfolios, although their attractiveness has slightly decreased with the advent of the coronary crisis.
“The explanation may be the previous too sharp rise in prices and this year’s risk of rent shortfalls, which may reduce the return on investment. Even so, a quarter of Czech and 28 percent of Slovak dollar millionaires still expect an interesting return from residential real estate, “added Sklenář.
In addition to long-term low interest rates, weakening demand and a lack of vacant flats and houses on the market also add to the attractiveness of residential real estate in the future. This is mainly due to the administrative and time-consuming acquisition of a building permit. “In this area, our country is one of the worst in Europe,” says Sklenář.
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Corporate bonds failed
Czech millionaires do not resist investing in startups either. Thirty percent of them described them as promising with regard to the expected appreciation. Gold also received increased interest in both countries. More than a fifth of wealthy people believe in its further evaluation.
The largest year-on-year decline in expectations of appreciation was experienced by corporate bonds in the Czech Republic and Slovakia. Their attractiveness in the eyes of investors is reduced by falling interest rates and also by new experiences in the fact that it is not a risk-free instrument. Corporate bonds did not benefit from the cases of Zoot or Arca. Therefore, investors are much more interested in the quality of issuers than before.
| Investors whose disposable assets are worth at least one million dollars, about 22 million crowns. A total of 275 participants took part in the Wealth Report 2020 survey, of which 175 were Czechs and 100 were Slovaks. Compared to abroad, Czech and Slovak rich people are still active entrepreneurs, on average they are 54 years old. There are a tenth of women among them. |
