Experts agree that the economic situation around the world will improve in the coming months. The world is slowly but steadily emerging from the coronavirus pandemic and, although we will probably face a few more surprises, the high vaccination rates in the world’s most economically important countries offer hope for a rapid improvement in the situation. Supply chains are also being systematically and permanently “patched up”—something that has been a millstone around the neck of the global economy over the past two years. The high level of inflation is a major challenge, however—it stands at 7.5% in the United States in January this year, while in Germany average annual inflation exceeded 3% last year—but it seems that central banks are prepared for this and willing to intervene cautiously so as not to stifle economic growth. The energy crisis and a possible rise in oil prices are also problems.
A possible slowdown will not harm stocks
Most economic experts nevertheless believe that the world is not threatened by a recession. Of course, some slowdown may occur, but this should not affect the stock market. This is also because there is currently virtually no alternative to stocks. We can see this in Poland, too. Although interest rates are rising rapidly, and lending rates are rising along with them, deposit rates remain low, failing to cover inflation or even come close to it. The same applies to bonds—their holders are not only failing to earn money, but high inflation is systematically eating away at their wealth.
There is no alternative to stocks
So if we want to defend our savings against inflation, the only widely available instrument protecting us from its high level is investment funds. Of course, not all of them, because carefully selecting them for a portfolio is always the investor’s responsibility, and this is particularly important when we are dealing with inflation.
A good example of a fund for difficult times is the subfund Skarbiec Spółek Wzrostowych, managed by Skarbiec TFI—one of Poland’s largest investment fund companies. Its advantage is that it invests in companies whose businesses are growing rapidly and which offer hope of dominating not the entire market, perhaps, but at least a significant part of it.
The selection of companies is the guarantee of success
The advantage of the Skarbiec Spółek Wzrostowych subfund is that it invests in companies whose market position is strong enough for them to pass on the increase in production costs resulting from rising inflation to customers, allowing their businesses to grow despite rising prices. This seems like a good umbrella that should extend over our savings.
Legal disclaimers
This publication does not constitute investment advice or any other form of investment recommendation concerning a particular financial instrument. This publication also does not constitute any other advice, in particular legal or tax advice.
F-Trust S.A. informs you that every investment involves risk. Funds do not guarantee the achievement of the assumed investment objective or a specific investment result. The possibility of partial loss of the funds paid in must be taken into account. The participant’s individual rate of return is not identical to the fund’s investment result and depends on the date on which participation units are sold and redeemed, the level of fees charged, and other charges on income from investments in funds, in particular capital gains tax. A detailed description of risk factors can be found in the information prospectus and key investor information applicable to the relevant fund.