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Economic expert: 2018 expected to be good for investors

Gints Belēvičs/twitter.com.
«This year promises to be good for investors, because global economy is on a rise and profits of businesses have a tendency to grow,» says Luminor economic expert Gints Belēvičs.

He notes that 2017 passed with a fat plus sign for stock markets – investments in this asset category secured much larger returns than the average in the past three decades.

Belēvičs also notes that it is important to keep in mind that the economy develops in a cyclic manner – growth is usually followed up by decline. «Fundamental factors do not point to a potential decline around the corner. Nevertheless, the geopolitical situation in the world can still change and have an effect. Growing fuel prices could potentially slow down economic development, especially in Europe.»

People talked a lot about the development of crypto currencies. Their price benefited from people’s rising interest in crypto currencies as a form of investments, says the economist. «It should be said, however, that investments in crypto currencies are not regulated in any way. This means there are certain risks. Price-forming mechanisms are so unclear that price fluctuations within a single day can be enormous. It is entirely possible that one of the existing crypto currencies could potentially become strong enough to serve as an official means of payment.»

The expert also mentioned the fact that capital securities provided three times larger returns in 2017 than average in the past 30 years can be considered the most significant finance market trend.

Euro value growth in relation to US dollar by 13.8% was a serious blowback to euro-based investors, reducing their profits. Most bonds in euro currency provided low or negative yield because of negative course change.

«It is expected that the value of stocks will grow in 2018. At the same time, however, so will their volatility. Global stocks experience a decline of 7.1% on average every year. Still, returns are positive in 73% of cases. Bonds mainly provide the bonus of diversification, because their value will likely be low in 2018,» says Belēvičs.


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