Investing in Serbia traditionally involves savings in banks or real estate, but with the growth of capital markets and crypto investments, there are now more options for investors. Bloomberg Adria examined several ways to invest 10,000 euros and the conditions surrounding each option.
Key factors for investment decisions
Before deciding where to invest, experts recommend considering your investment goals—whether short-term (6–12 months) or long-term (5–10 years)—and your risk tolerance. Higher risk can yield higher returns, but it’s important to align your strategy with your financial goals. Diversifying investments across different assets is advised for reducing risk.
Investment options
1. Stocks and ETFs
Investment analyst Mihailo Đurđević suggests that Serbian investors have access to a wide range of investment options, including stocks and exchange-traded funds (ETFs). ETFs offer exposure to specific sectors or indices, such as the S&P 500 or Nasdaq 100. This option provides diversification, helping to spread risk. For those interested in crypto, Bitcoin is a popular choice, but it carries a high risk.
2. Bonds and balanced funds
For those looking for lower risk, bonds or balanced funds (which combine stocks and bonds) are suitable medium-term investments. Bonds from governments or corporations may offer stable returns, but typically yield only a few percentage points per year.
3. Cryptocurrencies
Cryptocurrencies, particularly Bitcoin, have gained popularity, especially after Donald Trump’s US presidential victory. However, they are considered high-risk investments, and investors should be prepared for volatility. Marko Mijatović of Fifth Quarter Ventures advises caution, noting that while crypto might see growth, it carries significant risk.
4. Alternative investment funds
Alternative investment funds, including venture capital funds, are becoming more accessible in Serbia due to changes in regulations. The minimum investment threshold will soon drop from 50,000 to 5,000 euros, allowing more people to invest in these higher-risk, higher-reward opportunities. These funds typically invest in startups, which may fail but could yield substantial returns from successful ventures.
5. Crowdfunding
Crowdfunding offers an entry-level option for investment. In Serbia, the minimum investment for crowdfunding campaigns is as low as 100 euros, allowing small investors to participate in projects with high potential risk and reward. Digital tokens also offer similar opportunities.
6. Money Funds and Savings
For lower-risk investments, money funds, which invest in short-term government bonds or bank deposits, provide stable returns of around 3-5% annually. While savings accounts offer guaranteed safety, their returns are minimal compared to money funds.
Building an Investment Strategy
Rade Rakočević, an investment advisor, stresses the importance of defining your investment goals and risk profile before making decisions. For long-term investments, he recommends a diversified portfolio that includes stocks, ETFs, bonds and even small investments in riskier companies or cryptocurrencies.
Legal and Tax Considerations
Investing in cryptocurrencies, stocks, and bonds is legal in Serbia, and such investments are typically made through licensed brokers or authorized crypto exchanges. Unlike real estate, these financial instruments are not subject to property tax and capital gains tax does not apply to investments held for over 10 years.
Conclusion
Experts agree that there is no one-size-fits-all solution. The key is to diversify investments and match choices with your financial goals and risk tolerance. While initial investments may seem complex, they become easier over time, and the potential for higher returns grows with educated, strategic decisions.
