Top 5 Ways To Balance Returns In Inflated Market Conditions

By | February 3, 2014

Inflation is the most fundamental dogma of every economy. The value of money has decreased significantly over the past few decades. In general, inflation is a gradual process but some factors can trigger its rate such as increase in spending or stock market upswing. Inflation is an unbiased phenomena and when progressing at a steady pace, it can offer better investment opportunities and salaries for the individuals. On the contrary, a rapid inflation rate can push commodities higher and might even lead to a burst in consumer product prices.

How do you cope up with inflating market conditions and still get better returns?

The answer is- Careful Investing! You cannot rely on any particular stock or commodity; you need to follow a diversified approach.

Top 5 Ways to Balance Returns in Inflated Market Conditions

Top 5 Ways to Balance Returns in Inflated Market Conditions

How should you manage your investments in an inflated economy?

  1. Invest in foreign currency: Currency is one thing that fluctuates most during inflation and its value changes constantly. A country with inflated economy will witness a loss in its currency value. You can profit by investing in foreign currencies with stable economic conditions. With improving Japanese economy, you might want to invest in Japanese Yen to get better returns. Investors have received amazing returns by investing in foreign currencies. You should invest in currencies with an excellent exchange forecast instead of investing the dollar.
  2. Penny stocks can turn the table: Timothy Sykes is a name that every penny stock investor would inspire from. Penny stocks have the capability to help you make millions with an investment of thousands, provided you are Timothy Sykes! An average investor can gain good returns by investing in penny stocks and these stocks are relatively safe.
  3. Invest in wine: Who wouldn’t love to enjoy a glass of fine wine after the dinner? However, fine wine has turned into an excellent investment option in the past two decades. Wine investments are not dependent on market conditions and you can hedge against other investment risks. The best thing about fine wine is that it is available in a limited manner and its limited supply ensures excellent appreciation in the upcoming years.
  4. Energy stocks can perform well: Energy sector has made some news towards the end of 2013. The good thing about energy stocks is that they will continue to grow as long as the energy requirements keep rising. Further, U.S. is moving towards energy independence, which means the future of energy stocks is safe. In addition to the safety, we have witnessed energy crisis moving parallel to inflation in past. So, you can get better returns with energy stocks in an inflated economy.
  5. Antiques offer safe heaven: Many people might not agree to invest in antiques, but they offer secure and highly promising returns. When it comes to invest in antiques, you have to know the right things to look for that can offer better returns in future. A negative side of investing in antiques is that you cannot go to a federal body if your investment goes wrong. You should get expert advice before investing in antiques and you have to consider any upward or downward swings in the prices.

Investing in Gold

Gold was one of the escape routes against inflation and dodgy stock market few years back. However, it has struggled a lot in the past few years and it is no longer the safest investments in the market. Moreover, gold investments do not produce any income until sold and it is pure trading where one party is losing whereas the other reaps the returns. However, it might make sense to invest for a longer period like two or three decades.

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