Investment protects us from inflation
Even the most veteran investors fear and respect inflation, because inflation is a negative thing, it will always take away the value of your money, that is why Warren Buffett calls it an inflation tax, poorly managed inflation is capable of devastating a country and Venezuela is The proof of that, the truth is that it seems that a significant inflation is about to hit the entire planet, so we are going to analyze how to make money while the majority lose it due to inflation.
We must invest, the word investment is never a guarantee of success, there will always be risk, so we must analyze very well in which asset we are going to invest, it can be company stocks, cryptocurrencies, real estate, whatever it is, we must analyze it well, but invest it is a way to defeat inflation.
Cash investments in money market funds, currently do not pay much, but during inflationary crises they are the type of investment that many prefer because if there is an inflationary crisis the interest rate adjusts and this type of investment also benefits from the adjustment of the interest rate. So the interest is adjusted above inflation giving little profit, but great peace of mind to those who have this type of investment.
Treasury bonds protected against inflation or tips bonds, this type of bond is purchased in multiples of 100, is available in terms of 5, 10 or 30 years, they make annual adjustments to capital depending on consumer indexes, it does not offer great returns but it does offer the stability of the inflationary adjustment.
Inflation and real estate good match, credits help to compensate for inflationary losses, you can invest through trusts if you do not have enough capital to buy a home on your own, this type of investment is the most profitable during an inflationary crisis.
Savings accounts are the worst investments in an inflationary crisis, as are long-term fixed rate bonds, since a 30-year bond with 3% interest will lose value because after an interest adjustment due to inflation the new bonds will have a better interest rate.
As for the shares of companies, those linked to energy and mining can be a good option, those of technology maybe not, although they pay good dividends you must understand that the value of the shares can fall and if this happens you lose money, it is more if your investment does not grow more than inflation you are losing money
These are some tips for you to protect yourself from the inflation that is coming. Analysts and experts are sure that it will happen, although a miracle may happen and it will not happen only time will tell.
Thank you for reading
Hello @ramsesuchiha.
Very good article my friend, inflation will always be an aspect to respect and fear in any economy either at personal or business level, you share interesting and smart tips to mitigate the possible effects of inflation, thanks for sharing such extraordinary content with all of us, success my friend.
I'm glad you enjoyed it, thanks for reading
Finance literacy is an important investment for your future.
that's right friend thanks for reading
@tipu curate
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@tipu curate 7
For sure, investment is the best tool to be saved in the system we are living in. Many say that money is not that important, but it's for sure a very important thing to care about by investing it for our future.
If we do not invest we are condemned not to generate money, thanks for reading
I am a faithful witness of the consequences of hyperinflation in Venezuela and the best way to combat it is with investment, as a market analyst, trader and passionate about cryptocurrency I am a supporter of investments in cryptoassets. To invest we need capital, and how can we find it? With dedication, thanks to @projectHOPE I managed to accumulate my first capitalization. With good management and management I multiplied that fund, I found some financial freedom and how to combat that inflation.... I witness many men and women of science where a month's salary doesn't compare to a week on the blockchain
great contribution @ramsesuchiha I invite you to take a look in my technical analysis.
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I am also Venezuelan friend like you, project hope came to save my life from the misfortune of the economy that we live, I hope you enjoy this experience, read a daily publication that makes you more intelligent when facing life, I did not know you Until today, welcome to PH, your life will improve
Thanks for that warm welcome, I met ph a couple of months ago, but the lack of internet did not allow me to practice, I try to read every content posted, as many have high level of quality and knowledge.
Excellent and very interesting article @ramsesuchiha Inflation is one of the most pernicious economic phenomena for any society. In the case of Venezuela, its level is such that it has already reached the level of hyperinflation, a situation in which literally any financial investment loses meaning since there is no interest rate that can reach or exceed the speed with which the inflationary spiral grows. In these types of circumstances, tangible values (gold, jewelry, securities, foreign currency or any material good that increases its exchange value) are the most viable option to protect capital. A big greeting!
Your way of protecting capital with jewelry and material goods, it's a great idea, thanks for reading
Dear @ramsesuchiha
Another interesting choice of topic buddy. Very on time. Talks about inflation in current days and age are attracting wider and wider audience. Hopefully people will open their eyes and finally learn how we're all screwed by Central Banks.
Out of curiousity: would you rather go through inflation or deflation? I wonder if you've ever experienced deflation in your life. Many experts seem to believe, that deflation can be even worse than inflation. I wonder if you have any view on that?
This time around it may be exteremly difficult for FED to adjust (indrease) interest rates. It would send entire stock market into oblivion and probably panic sell would crash it. And US administration doesn't want that.
Wouldn't you agree?
Upvote on the way :)
Yours, Piotr
Hi dear buddy @crypto.piotr
I think the Fed has been busy trying to keep the population unaware that a financial crisis is coming, recently they started investigating Michael Blurry, who became famous and was played in the movie The Big Short by Cristian Bale, for put a few tweets warning of a crisis, so the Fed silenced it.
As for deflation vs inflation, I would rather live something more normal, here in Venezuela inflation is exaggerated, so since I have already lived 20 years in inflation, I would like to experience deflation for a change hahaha
p.s. your comments are always a great honor for me, thank you for saving my life dear angel