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Where private investors find profit in 2020 - 15.07.2020

How are investments different from mere allocation of funds?

Investments are always aimed at making a profit.

Unfortunately, there are big problems with profit this year:

  • despite the measures taken, the coronavirus pandemic continues;
  • as a result, there is a recession in all world economies;
  • accordingly, a large number of companies ceases to operate, and the remaining ones will for some time balance on the verge of bankruptcy or beg governments to save them;
  • even the online industry, which experienced an influx of orders during the period of self-isolation, will continue in the environment where consumers’ demand is shrinking and competition is enormously growing;
  • in these conditions, the future of the stock market is, to put it mildly, vague;
  • attempts to save the economy with zero interest rates will finally finish off the bond market;
  • the third pillar - real estate - at least will remain standing and making a profit on the lease; but those who acquired objects for the purpose of resale will be forced to either fix losses or postpone the moment of real estate sale for an indefinite period of time.

Is there anything we can do about it?

The answer depends on the size of the portfolio - the higher it is, the more vulnerable the investor, since any attempt by a large investor to turn securities into money will result in significant losses for him.

However, even in such a critical situation, private investors can not only save, but also increase their capital by choosing the right country and the right instruments.

We suggest taking Australia as an example of the right country.

It is a country with a self-sufficient economy that has been growing for over 50 years. We assume that Australia's GDP will decline this year, as in other countries, but the fact that the Australian economy is developing largely due to domestic supply and demand gives a high chance of its rapid recovery.

How can a private investor take advantage of this?

We see two options:

1. Buying residential property in Sydney.

Sydney is the economic capital of Australia and its financial center. More than 20% of the country's population lives here and produces about 30% of Australia's GDP. This city is a nationwide centre of attraction for positive energy of all kinds - physical, emotional, monetary.

In simple words, the most energetic and talented Australian people wish to be in Sydney and are willing to pay for it.

Accordingly, the demand for buying and renting housing in Sydney is very stable, and buying real estate in the financial capital of Australia is an excellent money protection for those who can afford it: the cost of an apartment in a decent area starts at 500,000 euros.

What should those who have less savings do?

For these people there is also a solution:

2. Investing in private debt.

Private debt is non-bank lending. The recipients of such loans are small and medium-sized enterprises, which the four largest banks in Australia are not interested in as borrowers.

While 99% of the assets of the entire banking system of the country are concentrated within the biggest four banks, solutions for small borrowers are very in demand and have been in Australia for decades.

Usually, these are short-term loans (up to two years) with a monthly interest payment.

Such loans are more like bonds, as the repayment of the principal amount is made by the borrower at the end of the term.

Investments in Australian private debt now yield about 7.5% per annum in Australian dollars with minimal risks, since loans have collateral, and the average loan term is 12 months.

The minimum entry amount is 10,000 Australian Dollars, which is equivalent to USD7,000 /EUR 6,150/ SGD 9,750 as of middle of July 2020 exchange rates.

Contact us for details.

Thank you for your attention and see you soon!