Are they realistic? Investing for beginners at a time when the global and Ukrainian economies are operating amid constant financial volatility? Inflation, the devaluation of the national currency, changes in central bank interest rates and global economic crises are eroding the value of money every day – money that is simply kept “under the mattress” or in ordinary current accounts. In such circumstances, basic capital accumulation ceases to be effective — money must be put to work.
Building a personal investment portfolio is no longer a luxury reserved for the wealthy, but an essential part of financial hygiene for anyone seeking to secure a stable future, build a financial safety net or generate passive income. Where should a beginner start when investing, which instruments are the safest, and how can risks be minimised?
Step 0: A financial safety net and a budget review
The main mistake made by novice investors is to invest their last savings – or, worse still, borrowed money – in high-risk assets. Before entering the stock market, two conditions must be met:
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To completely cancel consumer loans with high interest rates.
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Build up a financial safety net — an emergency fund equivalent to 3–6 months’ worth of your expenses. These funds should be as liquid as possible (for example, in a short-term deposit or an interest-bearing current account) so that you can access them in the event of an emergency.
To invest successfully, it is important to continually improve your financial literacy and analyse market trends. Read financial analysis, economic reviews and technology news regularly on reputable websites, including the portal ukrmedia.news, in order to understand which sectors of the economy are showing growth and where capital should be directed.
Popular investment instruments: from low to high risk
To build a balanced portfolio, an investor should combine different asset classes depending on their level of risk and potential return.
1. Domestic government bonds (OVDP)
It is one of the most reliable investment instruments in Ukraine. When buying OVDPs (government bonds), you are effectively lending money to the state at a fixed interest rate.
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Pros: 100%: a government-backed money-back guarantee; no personal income tax (PIT) on profits earned (only the military levy is payable); high liquidity.
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Yield: fully offsets or exceeds the current rate of inflation.
2. Bank deposits
A traditional way of saving money. It won’t yield a large profit, but it will help protect your capital from being completely eroded. It is advisable to choose banks that are members of the Deposit Guarantee Fund for Private Individuals and to diversify your deposits across different currencies (hryvnia, US dollar, euro).
3. The stock market: Shares and ETFs
For long-term investment (3–5 years or more), buying shares in global giants (Apple, Microsoft, Alphabet) or exchange-traded funds (ETFs) is ideal.
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The most popular is S&P 500 Index ETF, which comprises the 500 largest US companies. By investing in such a fund, you automatically acquire a tiny share of the entire US business sector, which significantly reduces the risk of any individual company going bankrupt. Over the long term, the S&P 500 has delivered an average annual return of around 8–10% in local currency.
4. Property
A traditional way of investing in Ukraine. This could be residential property property to let or commercial premises. However, this investment requires a high barrier to entry (significant start-up capital) and has low liquidity — it would not be possible to sell a flat quickly at market price in the event of an urgent need for cash.
The investor’s golden rule: Diversification
The fundamental law of the financial market is as follows: never put all your eggs in one basket. Diversification is the allocation of capital across different assets, economic sectors and countries in order to reduce the overall risk of a portfolio.
If one company makes a loss or one market sector (such as the technology sector) experiences a downturn, other assets (gold, bonds or energy sector shares) will offset these losses. The ideal portfolio for a beginner should consist of 60–70% of conservative, reliable instruments (government bonds, deposits, ETFs) and only 10–15% of high-risk assets (cryptocurrencies, shares in individual start-ups).
Conclusion.
Investing is not a casino game, nor is it a quick way to get rich in a month. It is a disciplined, systematic process that requires time, patience and constant control over one’s emotions (panic and greed). You can start investing even with small amounts (for example, buying a single government bond via a mobile app costs around 1,000 hryvnias). The key is to take that first step, top up your account regularly, and let the magic of compound interest work towards your financial well-being.
