Slovak millionaires are better prepared for crisis

The regular Wealth Report by J&T Banka suggests that wealthy people in Slovakia want to invest mostly in real estate and plots, as well as gold.

Illustrative stock photoIllustrative stock photo(Source: AP/TASR)

Although more than a half of Slovak dollar millionaires expect the crisis to start in about two years, they are better prepared for the worsened conditions than in 2008.

As much as 70 percent of respondents in the recent Wealth Report 2019 survey carried out by J&T Banka say that they would not panic and sell their assets like they did during the previous crisis. Conversely, they would use it for investments.

The Wealth Report survey also suggests that nearly 80 percent of wealthy Slovaks has been investing regularly and over the long term.

“It’s good that our clients are investing systematically,” said Anna Macaláková, head of J&T Banka, as quoted in a press release, adding that in the case of one-off investments there is a risk that the investment will be made when the price is the highest. “The advantage of regular investments is the creation of an average price that is rising due to technological progress or demographic development.”

The survey also showed that their clients are more experienced than 10 years ago, Macaláková added.

Properties and plots interesting

Slovak millionaires expect investments to bring an interesting increase in value in the case of residential properties (39 percent) and building plots (36 percent).

“The reason is that the number of building plots on which new properties can be built located close to big towns is low,” Macaláková said, as quoted in a press release. “Those available are quickly being sold out. Moreover, the construction is prolonged by the demanding process of issuing building permissions.”

Regarding the specific economic fields, 49 percent of respondents expect IT services to grow the most. The second field is tourism and recreation (26 percent), affected mostly by the support of the state in the form of reduced VAT on accommodation and the introduction of recreational vouchers.

Trust in gold

Slovak millionaires agreed in the poll that it is more difficult to create and keep one’s wealth than a year ago. At a time of a slowing economy, geopolitical uncertainties and the release of monetary policies, they consider gold to be the best safeguard. As much as 12 percent of respondents expect an interesting increase in the value of this commodity in the future, which is twice as much as last year.

On the other hand, they do not much believe in investing in startups. Only 17 percent of respondents chose this option, down from last year’s one-quarter of respondents.

“The reason may be the expected economic slowdown and the fact that investments in new companies are often demanding in terms of time and finances, and don’t have to be necessarily successful,” Macaláková said.​​​​​​

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