Whether it is the continuing consequences of the COVID19 pandemic, or the Russian invasion of Ukraine and the oil surge it has caused, the whole world is now reporting higher inflation rates, amid fears of worse months if ongoing conflicts do not come to end soon.
Inflation is the economic term meant to identify the change in prices of basic goods and services consumed over a period of time, which aims at measuring the expected impact on consumers' daily lives in the long term. Long-term inflation leaves major damage on currency values, as it impacts buyers' consumption power.
Currently, the world is seeing considerable increases in inflation rates, resulting from spikes in oil prices pressured by the Russian war in Ukraine, besides shortages of basic agricultural products produced in the eastern European countries involved in the military conflict that has been going on since late February, in addition to the overall impact of the pandemic on the world economy, which lived through two years of challenges and global lockdowns.
According to numbers reported by Quartz, the global inflation rate is around 6%, which includes some of the world's biggest economies, such as the United States at (8.5%), the Eurozone at (7.5%), and the United Kingdom at (7%).
These numbers have been alarming individuals with cash assets to the pressing need for safe investment plans, also known as inflation hedges, that can help protect savings from being devalued, as inflation usually leaves a heavy toll on currencies values.
How to Protect Your Savings During Inflation?
1. Gold
We can not talk about a safe investment without mentioning gold as the historically proven safe asset. No matter what happens around the world, Gold can be an asset to help store cash and preserve its value, if not make a profit.
If you are not that excited about purchasing gold bars, you can invest your money in stocks of gold mining businesses as well.
2. Digital Gold
In recent years, cryptocurrencies have given millions of people the chance of making a profit even at the worst of times. During the first few months of the COVID19 pandemic and as millions of people lost their jobs for lockdowns, the crypto market allowed people to invest their savings and make a passive living throughout the crisis.
Similarly, the current inflation crisis can be overcome by investing in the digital currency market, particularly given its scarcity and the growing confidence in it as a means of investment.
Moreover, tech-savvy capital owners can explore other digital investment options, such as purchasing the right property in the Metaverse or trading NFTs.
3. Real Estate
Similar to gold, real estate has long been among the industries that can preserve the value of money invested. Buying a piece of land, an apartment, or a building will always win, because the property bought will only get more expensive due to inflation.
4. Safe stocks
This plan will need a little more research than the other options, since it requires studying the different dynamics per stock market, per region, and per crisis.
For example, investing in stocks amid the COVID19 pandemic paid the most back for those who invested in healthcare, technology, and pharmaceutical companies. During an oil surge similar to the ones resulting from the war in Ukraine, buying stocks in the world's leading oil-producing companies can be the right way to save the value your money.
You will need an expert opinion based on the amount of money you are looking to invest, the type of commodities impacted during a given crisis, and the specific market/country/region you are looking to invest in.
Written by Riham Darwish
