23.06.2022

Deividas Urbanovičius: if changes in financial markets seem frightening, there are still predictable markets

Deividas Urbanovičius

Deividas Urbanovičius: if changes in financial markets seem frightening, there are still predictable markets

While 2021 was a successful year for many financial markets, 2022 is a bear market (down year). We have compiled data that presents the developments in financial markets over the last few years, and we also provide insights into what has had the biggest impact.

2021: financial markets overview

  • The main US stock index - the S&P 500 - recorded more than +26% gain.
  • The main European stock index, the STOXX Europe 600, gained more than +18%.
  • The most popular cryptocurrency - Bitcoin - recorded a price increase of +58% over 2021.

There are several reasons for this strong performance:

  • Stimulative monetary policy measures by central banks - low interest rates, various bond, and asset purchase programs, which have increased the money supply and made it cheaper on the market.
  • Attractive fiscal policy measures by governments - subsidies, bailouts, tax provisions.
  • The intensifying vaccine campaign around the world has led to the lifting of mild or total quarantines.
  • Producers' and consumers' expectations of the future outlook were at a high. This boosted consumption, created jobs, and raised the economic level of countries.


2022: financial markets overview

  • The main US stock index - the S&P 500 - has fallen by more than -21% since the beginning of the year.
  • The main European stock - the STOXX Europe 600 - has lost more than -17% over the same period.
  • The most popular cryptocurrency - Bitcoin - has fallen more than -54% since the beginning of the year.

In 2022, the situation in financial markets has changed for several key reasons:

  • Problems related to the disruption of global supply chains continue.
  • The highly rapid appreciation of raw materials.
  • Ultra-loose monetary and fiscal policies have led to the highest inflation levels in decades.
  • War in Ukraine.

Seeking more predictability when investing?

Here are the overall figures (based on Swedbank data) that real estate investors get from their rental properties

Average rental yields are currently in:

- Vilnius: 5.8%;
- Vilnius Old Town: 4.7%;
- Kaunas: 7%;
- Klaipėda: 7%.

At the beginning of 2021, the average rental yields in:

- Vilnius: 5.8%;
- Vilnius Old Town: 4.9%;
- Kaunas: 7.2%;
- Klaipėda: 6.6%.

In comparison, since first property on InRento until now, no project has been late, the average total return is close to 8% p.a., and completed projects have an average annual return of 19.49% p.a. (interest from rent and capital gains).

It is up to you to decide which investment opportunity you find most attractive.

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