Should Cities Invest in Stocks? Kurikka Thinks So

The city of Kurikka, located in Finnish South Ostrobothnia, has managed to maintain a high level of public services, such as free early childhood education, gym service vouchers for retirees, and significant investments in infrastructure, primarily through successful stock investments. Despite this, Taloussanomat reported at the beginning of October that the city's 2022 financial statement ended with such a significant surplus that the city council decided to purchase additional stocks worth nearly a million euros.

There are plenty of other success stories as well, such as Bromarv and Nokia, or the investment funds from Norway and Abu Dhabi, to name just a few. So, why would a city or an individual consider entering the stock market for "speculation"? After all, stock investing can, in the worst case, be an efficient mechanism for the rapid redistribution of wealth.

The most compelling reason to participate is to engage in the growth of the global economy. In the end, stock markets follow the financial performance of companies. Good corporate performance has led to strong market growth, especially over the past four decades. By investing in stocks, you reduce your dependency on the economic growth of your own region and directly benefit from global growth sectors or areas, such as artificial intelligence. Even if the global economy slows down, the stock market will always offer individual growth stories.

What did Albert Einstein consider the most powerful force in the world? According to him, it was the phenomenon of compound interest. By participating in growing markets, saving, and reinvesting profits, you can harness this force to work on your behalf. What could be better than knowing that you’ve just hired the world’s most powerful force to work for you?

Develop a source of income independent of your salary. Over the long term, investing in stocks is the best way to save. Stocks belong in every investment portfolio. The direct costs of stock investing today are low, there are tax-saving investment options, and they don’t require maintenance like real estate. Shares in large companies can also be quickly converted into cash. You don’t need to be a millionaire to be a stock investor; anyone can start by investing as little as 20 euros a month.

Come join me in exploring the fascinating world of stock investing. In the next part, we’ll go over the basics of stock investing, which, by the way, can already take you quite far.

The original Finnish column text is available in the digital version of Salonjokilaakso, on page 15.