When it comes to investment decisions, inflation must be understood and taken into account at the same time, as it affects all aspects of the economy, from consumer spending, business investment and interest rates to the regulation of money in circulation by central banks, which reduces the return on investment. In May 2021, the monthly price growth rate in Slovenia was 0.9%, while at the annual rate inflation was 2.1%. Assuming an interest rate of 0.5% for a deposit of up to 1 year (nominal yield) and an inflation rate of 2%, the actual yield is negative and amounts to -1.5%. Even in real estate, where apartments for rent have an average annual return of 3-5%, the effect of 2% inflation achieves a real return of 1-3%.
On the other hand, investments in cryptocurrencies are very popular today, where price growth has recently attracted more and more investors. As this is an extremely speculative investment, it is necessary to have enough knowledge and discipline in investment decisions, and the key problem is that the investor does not know exactly what they are investing in. The cryptocurrency market is unregulated and is often influenced by various manipulations. Because emotions still play an important role in investors, the diversification of investments and consequently wrong decisions are often disregarded. Emotions should never influence investment decisions, and in the event of a lack of financial literacy, investors should entrust the management of their assets (i.e. wealth management) to financial professionals.
However, it is advisable to invest in alternative forms of investment, which include real estate and infrastructure funds, purchase of receivables and other investments. Less known are investments or funds that repurchase receivables in their investment policy. It is necessary to distinguish between receivables from companies and those from consumers, as the former are much riskier in terms of the possible deterioration of corporate liquidity than receivables from individuals, who are in lower amounts and individuals guarantee with all their assets. In addition, this type of financing is mostly insured with insurance companies, which further minimizes the risk. Superos Fund Management Ltd., manages the alternative investment fund Superos Stability Fund, which, according to its investment policy, invests the assets of well-informed investors exclusively in the consumer financing of Slovenian citizens. The investment in this fund is adequately diversified and consequently significantly safer than other investments with a similar risk profile, while offering monthly liquidity, which is a rarity for other alternative investments.
