The Bank of Russia believes that Russians are not at the risk of a high inflation rate. However, the global market has been warning about looming inflation risks and searching for ways to protect savings from loss.
Investing in the stock market could be one way. The stock market demonstrates significant potential in the long term, according to Viktor Shastin, Director of Investment Consulting at the Veles Capital investment company.
“There has been a lot of talking about the upcoming surge in inflation, which is supported by serious stimuli both in the dollar and euro zones. Stocks are an asset that can protect you in the long term,” Viktor Shastin comments.
Bank deposits, a common financial instrument among Russians, can’t protect savings from inflation, the expert notes. He also argues that, if we take dividends into account, the Russian stock market has grown by 180% in the past 10 years.
“If we convert the ruble-based profitability into dollars, we will get 25%, including dividends. It’s not a lot but this is the reality of the pro-Russian market. It is difficult for our economy to grow fast. It is unlikely our market will show more impressive results if our currency is strong,” Shastin explains.
The expert shared his opinion at the online meetup “Investing during a crisis: real estate or stock market.”