Investing in times of inflation
Well, the world has gone mad. New wars, economies hanging on by a thread, and times of record-high inflation rates.
It all has me wondering where to truly invest the money I have to see this all through.
In my lifetime, I never doubted there would be unique worldwide issues to deal with given the histories of my parents and their parents.
My grandparents were children during the great depression and grew to be young adults in world wars. Through all those bad times they managed to make it to an end in old age. I’m grateful for the time well spent with them.
Back then you bought assets like land, gold, bonds, livestock, and maybe a few stocks.
Today, it’s the opposite for the most part. Land is still a good asset but it’s getting extremely competitive to find good deals that don’t break the bank. Then there are never-ending taxes that make it all seem worthless.
Most financial advisors advocate buying index funds and mutual funds with a majority of your holdings in stocks. Those give a median return of 6% year after year.
Now inflation rates are greater than 10%. Everyone is going to lose money.
So where do you hedge your bets?
Everything is a risky bet right now so I honestly don’t know the answer to that question. My simplified goal is to lose as little money as possible while earning as much as possible.
Most savvy investors will probably take a diversified play that includes a good mix of assets.
- Stocks & Bonds
- Gold, Silver, Nickel
- Land/Real Estate
- Money Market Accounts
- Emerging tech ( crypto, green energy, etc…)
Ironically right now commodities like oil and wheat are booming due to several issues in the states and over in Russia.
Holding cash in a checking or savings account is the last thing you should do. Both for pitiful interest reasons and security.
The government can reach into your accounts at any point and take your money so it’s troubling to feel confident leaving your hard-earned money in central banks.
Having dabbled in crypto I’m keen to put more of my net worth there but it comes with risk. This market is new and volatile but over the past few years, Bitcoin and Ethereum have grown considerably. New tech like Luna has my attention as well.
On March 9, 2022, The President announced an executive order for the responsible development of digital assets.
Overall this is a positive sign for the country. Not outright banning it is at least a solid step forward.
Where we go from here is somewhat up in the air but it’s good to get a nod of approval.
More regulation isn’t a bad thing since that standardizes the model of crypto. Only about 10% of the US population even dabbles in it so I expect that number to rise as the tech behind it gets easier and safer to use.
With crypto, there is no centralized bank controlling your money. You control your money. That’s its biggest sell.
What I hope I don’t see in the future are any announcements that deconstruct the core values of crypto like decentralization, public ledgers, and fewer dependencies on centralized institutions like banks.
Safer bets
While nothing is truly safe I do think owning a little of everything is a sound play right now. I don’t own any gold so I might look into that a bit more.
When shit hits the fan like right now it probably makes more sense to go shopping than it does to panic sell. I’ll be doing more research on where to deploy next. I’m hopeful it’s without too much risk.