The Nezavisimaya Gazeta daily has decided to find out how much money the Russians have earned and lost on various financial instruments in the past 10 years. Yevgeny Goryunov, Candidate of Economic Sciences, Senior Researcher of the Gaidar Institute spoke about the instruments which might be worthwhile for ordinary citizens.

This year has turned upside-down the outlooks which investment strategists used to present to the Russians. Over ten years the US dollar has doubled in value, but it has become a questionable store of value because of the tumbles in the spring. Foreign currency deposits used to be profitable, but not now. Interest rates on deposits in roubles lag behind the rate of inflation. Prices for gold have recently collapsed. Housing prices are appreciating, but in the US dollar equivalent their value has fallen on average by 20% over 10 years. Though according to various surveys the Russians still believe in real estate, bank deposits and gold, they are already disappointed in cash foreign currency.

According to the data of the NAFI Research Center’s survey based in particular on Russian citizens’ opinions, the top-3 most reliable investments include real property, deposits with state-owned banks and gold. With 1600 respondents surveyed, it was specified that the top-3 instruments remained unchanged during the past 5 years. In September 2022, over 40% of respondents said they preferred investments in property both in terms of reliability and profitability, while over 20% of respondents each spoke in favor of deposits with state-owned banks and gold.

According to the NAFI Research Center, over the past few years the share of the Russians who regarded purchasing of cash foreign currency as a profitable or reliable investment fell threefold from 17% in 2017 to 6% in September 2022.

“It is worth mentioning that the Russians widely believe that investments in gold and property are highly reliable. They often set investments in gold and square meters which “can be touched” against “ephemeral” financial investments, say, equities or bonds. But this year gold has depreciated by a third and the real estate market, including leasehold, plunged significantly,” Yevgeny Goryunov noted.

Nevertheless, real estate market representatives insist that investments in square meters look reasonable and reliable in any situation.

The developments of 2022 – both in February and September – have changed the situation on the market: investors intend to leave the country temporarily or permanently and sell off property; some tenants have either been called up for the army or are concerned about it.

An ambiguous situation can be observed with securities. According to the Central Bank of Russia, the worth of individuals’ blocked foreign equities surpassed Rb320bn. On the Russian financial market, individual investment accounts (IIA) have become the most popular financial instrument for the mass investor in the past few years. An advantage of this instrument is flexibility in terms of selection of an investment strategy, the amount of investment, as well as an option to receive a tax deduction. “However, the Russian financial market crash brought about substantial losses to Russian investors. Over the past year, the Moscow Exchange Index has nearly halved. Consumer prices have jumped upward. Equities have lost much of their investment appeal on the back of these developments,” Yevgeny Goryunov said.

And, finally, gold. “Unfortunately, the Russian economy has entered the period of high volatility which is expected to be quite long. For private investors with a modest amount of savings it means that there are actually no options for protecting their savings from devaluation,” Yevgeny Goryunov concludes.

This period requires more safety nets. It is good if one has something to invest in.