The expert explained how you can protect your savings

One of the main questions that any investor asks is how to preserve their savings. This is especially true during periods of high inflation. Among the variety of instruments with full protection, today you can also take a closer look at investment bonds. Alexander Shepelev, an expert on the stock market at BCS World of Investments, spoke about the advantages and risks of such decisions.

– It may seem that current deposit rates of 14–15% already solve this problem. However, such attractive interest rates are only available for a relatively short period. The reason is that the rise in deposits was largely due to the increase in the key rate, the size of which, according to many experts, has already reached its peak. And its likely decline this year will be followed by deposit rates.

But for the Russian stock market, the beginning of a key rate reduction cycle will be a positive factor. Largely based on this, analysts are talking about a possible increase in the Moscow Exchange index by 20, or even 30% during the year. This is already significantly higher than current rates on bank deposits or inflation. True, the risks when directly purchasing shares on a brokerage account are somewhat higher. How to minimize them?

Instruments such as investment bonds with full capital protection are designed not only to help the investor make money if the market rises, but also not to lose the invested amount if it declines. The point is that even if a “black swan” suddenly happens and, contrary to all the brokers’ forecasts, the shares of the Russian market do not rise or fall, the investor will in no case go into the red, that is, he will definitely return the invested amount in full. This is set out in the terms of such instruments in the prospectus and cannot change. The issue of such instruments is closely monitored by the Central Bank.

An investment bond is also an exchange-traded instrument. This means that you can look at its market value (quote), buy additionally or sell ahead of schedule. The most interesting assets for investment bonds today are not specific shares, but the entire Russian market at once. In other words, when the profitability of an investor who bought such a bond will be tied to the Moscow Exchange index. If the key indicator of the Russian stock market grows, then the investor’s income will be exactly the same amount. And if at the end of the bond’s life the index does not change or decreases, then the investor will not lose anything, since full protection of the invested funds will work.

Speaking about the risks of investment bonds, first of all, the following should be noted: if the asset does not grow by the end of the bond’s life or remains at the initial level, then the investor will only get back the invested amount (in the case of full protection, it will be returned in full). It is also important to remember that the conditions for obtaining potential profitability and protection of invested funds work provided that the investor does not sell the bond before maturity, and the amount of the income itself depends on the conditions of the issuer. We should not forget about the reliability of the issuer of the bond itself, since investment bonds, like any securities, are not insured.