Savings and investing spare funds have gradually become commonplace, and more and more people are taking advantage of the opportunity to “outpace” inflation. Latvian residents can be characterized as extremely cautious in this regard – compared to our Baltic neighbors, we are much more reserved in terms of investing in shares, writes Elza Rudzīte, head of the Individual segment of SEB banka.
Most likely, this will be felt in the next few years, as younger people look at the financial markets in Latvia with more confidence and are more open to new investment opportunities, according to a population survey on investment habits*.
Among the investment leaders – pension, real estate and life insurance
Currently, every second resident of Latvia (56%) between the ages of 18 and 74 makes investments for their future. The most popular investment goals are similar in all Baltic countries, however, the methods and goals of using investment instruments are different in different age groups. Most often, residents of the Baltic States invest in pension savings (inhabitants between the ages of 40 and 59 do this most actively). The “leader” of investments in Latvia is the 3rd level of pensions (27%), followed by life insurance with savings (14%) and investments in real estate (11%). On average, people in Latvia set aside from 20 to 100 euros per month for future savings and make contributions regularly – every month. This is generally good news because it means that people are gradually getting used to saving and it is becoming a valuable habit.
When evaluating the types of investments in the Baltics, there is a noticeable difference – if in Latvia only about a tenth of people invest in shares and bonds, in Estonia it is almost half of all investors. It is expected that this indicator could change in the future, as investments in shares (as well as cryptocurrency) are also popular among young people (18-29 years) in Latvia. Investors will have appreciated the long-term returns of this financial instrument over time, so the total number of investors will increase year by year. For now, older people do not trust stock markets and cryptocurrencies, preferring pension level 3. It must be said that most Latvian savers can be considered conservative, as more than a third of all choose less risky investments.
Four types of investors
By summarizing the investment habits of Latvian citizens, four main groups of Latvian investors are crystallized, which characterize people’s attitude towards investments and the acceptable level of risk.
2023-12-13 15:51:15
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