Where to Invest in Times of General Uncertainty?

In the conditions of general uncertainty, it has become difficult to make decisions on investing, especially in the markets where companies that were favorites until recently – tech companies which were not weakened even by the coronavirus pandemic – are now losing millions of dollars on a weekly basis.

Where do our investors invest?

When they invest in Serbia, local investors find investment in real estate the most interesting, such as apartments, office space and construction land, which is why a sudden growth of the real estate market, but also the prices in it, is recorded, Branislav Jorgic, the owner of one of our oldest brokerage houses, Jorgic Broker, says for B&F.

On the other hand, he adds, our portfolio investors mostly invest in securities abroad, which makes Serbia a net exporter of market capital. That means that Serbian citizens invest more abroad that foreigners invest in the Belgrade Stock Exchange.

Vaso Dulovic, the general manager of the brokerage-dealer company Ilirika Investments, is of a similar opinion. He explains that local investors most frequently invest in securities listed in American stock exchanges, and then in European ones. They also frequently invest in foreign commodities exchanges, where they mostly opt for oil, gold, metals and other goods in demand, and, according to Dulovic, some younger people are also active in crypto-markets.

Safe, but unprofitable investments

Experts agree that bank savings are the safest investment, which our citizens are obviously aware of too, since, in the past years, banks in Serbia, despite the low interest rates, have been recording a constant growth of savings.

In addition to savings, bonds are considered a relatively safe investment as well, especially in times of crisis. Dulovic says that it is precisely thanks to the security they offer during the pandemic that bonds have become even more popular, but Jorgic does not expect them to attract many investors in the future, because, like savings, they produce low yields, which are below the inflation rate.

Discreet charm of foreign stock exchanges

The charm of stock exchanges in Serbia is so discreet as to be nearly imperceptible. The reason, at least according to Dulovic, are “the insufficiently developed investment culture and not being informed about the potential alternatives for investments, except for those known to everyone, such as real estate”.

However, even those who want to invest in this way rarely opt for the Belgrade Stock Exchange, because a wider choice is offered to them in foreign stock exchanges, consisting of, among other things, transparent companies with good corporate management. However, not even the largest and the most important world stock exchanges are not in the best state right now.

Where to invest in the future?

Despite all the challenges that the world economy is facing at the moment, it is still possible to make money at foreign stock exchanges, with an adequate investment technique, Dulovic claims and tells investors that it’s best to take positions that they will not hold on to for a longer time period.

– Investors should focus on constant trading and catching shorter rising waves at the right moment – says the interviewee of B&F.

According to him, at the moment, it’s best to invest in companies which are less sensitive to recession periods, so, those that provide existential services or essential products, such as food, drinks, energy, communications, healthcare. Dulovic said that another good strategy is to invest in companies which have solid dividends, since a higher dividend usually attracts a larger number of investors, whereby the demand increases constantly.

Branislav Jorgic shares this opinion and adds that, in addition to companies which produce essential goods, he would also invest in the IT sector. The interviewee of B&F also emphasizes the importance of dividends, because, that way, “even if there is a fluctuation in the prices of shares, the investors will have regular dividend-based annual income”. Furthermore, it would be good to consider investing in agricultural exchange products, through the Commodities Market in Novi Sad. The growth of the prices of wheat, corn, sunflower, soybean, sugar and other goods is likely, which leaves room for a substantial profit, Jorgic concludes.