ASK AN EXPERT: Should I invest in Czechia or abroad?

In the complex and ever-changing world of investing, there’s often no right or wrong answer. What’s good for one investor may be bad for another, and expats in Czechia should evaluate their personal goals before deciding what type of investment is right for them.

A fundamental question is whether to invest in Czechia or abroad. The temptation to invest elsewhere, especially for those struggling with the language barrier, can be strong. But with Czechia offering a wealth of opportunities, we asked Jan Stránský, Wealth Manager at WOOD & Company, about the other factors that should influence your decision.

“One of the cardinal rules of investing is that diversification is key,” explains Stránský. “For expats living in the Czech Republic, two variables I would consider are in which currency you pay your expenses, and in which currency you have income. What you want to avoid, if possible, is the conversion of one currency into another, and the unnecessary paying of fees for such transactions.”

This means if your wage is being paid in Czech Crowns, it is “in your best advantage” to invest in Czechia. “Even if you are earning in a foreign currency, but are having to pay for expenses such as rent in Czech Crowns, I would also recommend investing in this country. Your potential profit from investing can then be directly utilized for the paying of your expenses without needing any currency conversion.”

Investing can be effective in helping you realize a wide range of financial goals, but success often requires patience. With the value of assets bound to go up and down over time, holding investments for longer increases your chance for overall gains.

“Investment strategies which have the highest probability for success are long-term, which means at the very least a five-year time horizon,” explains Stránský. “If you plan on residing in Czechia for the ‘long-term,’ then investing at least a portion of your money here simply makes sense.”

Investment products vary across different countries and regions, so it’s worth doing your research on the strengths of Czechia as an investment location.

“Different countries experience different economic states and trends, all of which present opportunities. At the end of the day, it is a good idea to invest your money if, after doing your research, you believe a particular product is a quality investment, regardless of where it is domiciled,” Stránský concludes.

Should you want to reach out to Jan Stránský at WOOD & Company directly for a free consultation, he can be reached at jan.stransky@wood.cz.