The SAX index represents the index of the Bratislava Stock Exchange. Its value during the year 2021 rose from 348.74 points on January 4th to 397.34 points on December 30th, 2021. Thus, the value of the SAX index increased by 13.94 percent during 2021. Investment in this index ensured a significant appreciation, which far exceeded the average inflation rate in 2021. Therefore, anyone who invested 1000 euros at the beginning of the period received a return of 139.4 euros by the end of the year. Moreover, if they left their money invested for at least a year, they didn't have to pay tax on the returns, as they met the so-called time test, which represents one year in Slovakia. In such a case, the returns from investments in such assets are exempt from income tax. Of course, we also need to consider the average inflation rate of 3.2 percent.
Calculation:
Change in the SAX index
((397.34 – 348.74)/348.74)*100 – 100 = 13.94
percent Real return on investment in the SAX index
13.94 – 3.2 = 10.74
percent Real change in purchasing power of invested
1000 euros 1000 x 0.1074 = 107.4 euros
Unlike guaranteed deposits or investments, no one can guarantee returns to investors in stocks or their indexes. Furthermore, it's essential to realize that past returns do not indicate future returns. In other words, when you see growth in 2021, it doesn't mean you can expect growth in 2022.
