Where do Albanians invest their money? - Tafa: ETFs, investment funds and private pensions remain little-known alternatives
Albanians have historically invested their money either in deposits, a safe investment but with very low returns, or in real estate, as they see it as a tangible asset that brings long-term benefits and can be passed down to future generations.
According to lecturer Besarta Tafa, other financial alternatives such as ETFs, government bonds, investment funds or stocks are not very developed in Albania, mainly because Albanians do not have the knowledge to use them.
"We can say that Albanians do not have the courage to invest in financial alternatives, such as investment funds or stock funds, because, firstly, they do not have sufficient information, but on the other hand, the Albanian market has not offered sufficient opportunities to have access to different types of investments," the pedagogue said.
Pedagogy also explains another form of investment, ETFs, which is simpler, has lower costs, and extremely high returns.
"The first instrument, which in my opinion is very important, taking into account the development it has received in the European market and beyond, is the ETF. An ETF is a fund that collects shares from different businesses. One of the main advantages of ETFs is diversification. So, a consumer does not invest his funds entirely in one company, where the risk is higher, but diversifies his funds in different companies, with different levels of risk, which protects him as an investor. It is one of the simplest formats for the investor who intends to invest. The costs are relatively low, the transparency is greater, you can enter this investment fund with a small amount and the return is relatively high. Also, the diversification towards risk is high," she said.
According to the lecturer, private pension funds are also a good investment opportunity, where with government intervention through lower and more favorable taxes for the investor, the provision of infrastructure for participation in these funds, as well as participation by both parties, both the employer and the employee, to contribute to the pension fund, which will guarantee a return after several years, it can become more attractive.
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