There are some dark aspects in today’s investment world: inflation is skyrocketing, there is a war and possibly a recession coming. In short, an exciting time to start investing now. Freddy Forger of Stoic points out that while we are indeed in an exciting time, history repeats itself, there is plenty of material to look back on.
Check out 3 tips to keep your cool during crisis at the fair.
When drastic events such as a war or a pandemic occur, there are huge price drops in the short term. However, this need not be relevant at all, as long as you are saving for the longer term.
As for when to get in, even if you were to get in at the “highest point,” even then you will naturally return to your entry level over time. Here again, dispersion is incredibly important, though. Even if, in the darkest scenario, rates were only to fall and not rise again, the likelihood of losing out in purchasing power, relatively speaking, is still minimal.
Invest or better to put in savings account?
With current inflation and rising gas prices, for example, many people are tempted not to invest, but to keep the money “safe” in the savings account. According to Freddy, even in this day and age, investing can do no harm, as long as you do it with money you won’t need for a long time. So you need to make sure that you have enough money “left over” to cover even an increase in the gas bill, for example, without touching the money you put into investments. At the very worst, of course, you can always access your shares, which is not the case with real estate, for example.
Saving to maintain your purchasing power, an impossible battle?
In today’s turbulent times, it seems almost an impossible task to be able to maintain your purchasing power through saving, by any means. Freddy points out that this is why it is very important to take a close look at exactly what you are going to save, in order to lose as little purchasing power as possible. For example, plenty of stocks rose in value in the middle of the Covid pandemic. So saving stocks can be a way to combat inflation.
Want to know more about what expert Freddy says about investing in times of inflation? Then watch the video below.
