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Personal finance and investment during the war - S&P Agency

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Personal finance and investment during the war


With the outbreak of the war, everyone believed that our economy would almost immediately come to an end. But the expected halving did not happen, but reached only 35%, so everything is not so bad. So if you think that making money in the war is something from the science fiction section, then we are ready to argue with you.

Look at the ground

This recommendation was provided by Sergei Fursa, Deputy Director for Securities Trading at Dragon Capital investment company.

In general, in his commentary, he was quite restrained. Fursa drew attention to the fact that cryptocurrencies have never been an asset for investment.

Personal finance and investment during the war

“And in a crisis, in principle, an important rule is Cash is the King – (from the English “Cash is the king.” – Ed.). If prices have dropped sharply, you can think about agricultural land. And look towards Eurobonds. But only if you have money abroad,” he told Finance.ua.

According to Andrey Usenko, CEO and founder of Your Kolo company, investing in land has several significant advantages over other assets:

  • The investor immediately gets ownership of the real estate – no need to wait, this is a real physical asset that you own right away;
  • land is an asset that works from the very first day of acquisition, because 95% of Ukraine’s land is cultivated by agricultural companies. You purchase a land plot that already has a lease agreement;
  • from 8% per annum – guaranteed rental income for the investor;
  • The price of land will increase by 70% in the next 3 years – according to analysts. And as the experience of other countries shows;
  • land is a reliable asset, even in the event of hostilities it is quickly returned to a state suitable for processing;
  • Agricultural business is less susceptible to crises than any other.

What you need to know about investing in land:

  • only citizens of Ukraine can purchase land;
  • maximum investment: 100 ha;
  • mandatory notarization of the transaction;
  • payment is made exclusively in non-cash form;
  • notarial verification of the source of funds is required.

Five non-obvious directions

Five areas that are now interesting for investment in the realities in which Ukraine has been living since February 24.

Property

As strange as it may sound, given the permanent threat of rocket attacks, but the real estate market will develop, especially when it comes to the housing sector.

A significant part of the housing stock was destroyed as a result of hostilities, but the state plans to restore it – appropriate programs are being developed.

In addition, damaged infrastructure facilities will also need to be restored.

There are two types of investments here:

  • investment in the secondary market, where prices have fallen significantly compared to the pre-war period;
  • real investment in the creation of construction enterprises that will renew these objects.

Interestingly, here we can talk about the emergence, among other things, of new forms of interaction “state-private entrepreneur”, which in the post-war reconstruction will lead to the achievement of not only economic and social effects (construction of social housing), but also ensure the implementation of sustainable development goals and opportunities entry into a rather “closed” real estate market of new players.

Of course, such investments today are too risky, but this does not mean at all that there is no investor exposed to such risk.

Personal finance and investment during the war

Logistics

Many logistics facilities were destroyed, but the need for them has not decreased.

Again, if we talk about the post-war reconstruction, the need for a developed logistics chain capable of providing a full cycle of a logistics (especially international) operation will constantly grow.

At the same time, the emphasis in such logistics networks should also shift from classical transport and warehouse logistics to a broader, innovative service provision.

It is clear that such logistics networks will be mainly localized in the relatively safe territories of western Ukraine.

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Alternative Energy

Installing, for example, banal solar panels on the roofs of one’s own houses can be considered not only as an opportunity to independently provide electricity or heat a house, but also as an investment with the possibility of obtaining additional profit.

If compared with investments, say, in real estate, then the rate of return / risk of this type of investment is much higher, capital costs are lower + we have personal “bonuses”.

Fintech and Medtech

For Ukraine, this is a new segment, which, at the same time, is developing quite quickly and qualitatively.

Moreover, according to some indicators, it is these segments that are far ahead of European markets.

World practice shows that they However, these segments not only did not “suffer” from the impact of the covid pandemic, but also continued to develop, remaining interesting for global investors.

Online education

Of course, this trend has intensified during the covid pandemic, and, obviously, in the context of hostilities and post-war reconstruction, it will only develop: the main thing is to understand how to choose the “right car” and how to “jump into it”.

Also interesting are investments in sustainable development and financial instruments.

But about traditional investment instruments – stocks, bonds, derivatives, indices, funds, etc. we urge you to be careful, because these markets are still very volatile and especially sensitive to changes in the international financial and investment environment.

US stock market

This, according to the financier, asset manager of 1st Family Office Vasily Matiy, is the best investment option for a long-term investor from Ukraine at the moment.

“This allows you to hedge (limit. – Ed.) currency risks associated with the national payment unit – the hryvnia, which, due to the war, has a tangible threat of devaluation, which we can already observe.

The second is investment in another jurisdiction that ensures the diversification of the investor according to this principle. It is also a liquid asset that can be sold at any time to use these funds,” he explained.

According to Matia, the current correction of the stock market in the region of 20%, on the contrary, is a good opportunity for those investors who have free funds and are thinking of starting to invest.

“The return of funds that copy the US S & P 500 index, which includes the 500 largest US companies, has been about 10% per annum over the past hundred years. For a long-term passive investor, a 20% correction is irrelevant. Indeed, thanks to volatility, that is, fluctuations in the value of assets in price, we can count on a long-term return of 10%. When there is no volatility, it is impossible to count on such profitability,” the expert noted.

However, it is necessary to immediately make a reservation that it is impossible to directly purchase foreign securities in Ukraine, because since May 10, the NBU restrictions have been in effect in the country.

“Calculations abroad for the purpose of buying securities, shares, bonds and paying for brokerage services for these operations, carried out using cards issued by Ukrainian banks, are temporarily prohibited. The corresponding changes are aimed at limiting the unproductive outflow of capital and protecting Ukraine’s international reserves,” the regulator explained his decision.

Therefore, this tool is suitable for those who have funds abroad, or risk circumventing the NBU restriction.

According to the Ministry of Finance website for investors, you can replenish your brokerage account with Freedom Finance by card transfer through Oschadbank (other banks do not carry out such operations).

Accounts with Interactive Brokers and Art Capital will be funded through Wise and Payoneer financial services.

But there is a catch here too: Wise has not issued new digital cards in Ukraine since August 12. Existing ones will work until their expiration date.

Output

All these tips will help you, even at the beginning of the path called “investing”, become a successful investor and make money during the war.

Personal finance and investment during the war

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Name: Mykola

Surname: Siutkin

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