Saturday, September 30, 2023

An effective investment to fight inflation?

The inflation assumes, a Price increase sustainable – it persists over a certain period of time – and generalized – it affects a significant number of goods and services. Because of this, it is one of the most repeated words in recent years high inflation rates that have been recorded and unreleased in recent decades. This price increase has consequences for everyone because it leads to a decline in the purchasing power of money. One of the keys to dealing with this could be to invest in plata or metals Nice.

That is, the increase in the general price level causes the Money lose value because if prices rise sharply, we will be able to buy fewer products with them tomorrow than we can today same amount of money. So when inflation occurs, storing money immovably – under the mattress, as they usually say – means a loss and is a mistake for personal finance.

A form of Combating inflation To avoid a loss of purchasing power, one must invest money with the aim of achieving a return that is higher than the CPI. One of the investment alternatives is gold and silver. Both gold and silver are recurring assets during times of inflation. They are recording profits “also because the increase in prices for goods and services is often accompanied by a weaker dollar,” Selfbank emphasizes.

How do you invest in gold and silver?

As with other investments, you can receive plusvalías based on the development of the price of the financial product. Specifically, you can invest in gold and silver directly through bars and coins. For this modality you must use certified companies with a guarantee on the weight and quality of the gold bar they offer.

This is the most traditional way invest in gold. However, as Raisin points out, it carries a higher risk “as it can be lost or even stolen” because precious metals have a high value. In this case, it must be taken into account that this investment involves the acquisition of a physical product that must be stored and that safe storage and its associated costs must be taken into account since they affect security Cost effectiveness.

But there are also other options for Invest in gold or silver. It is possible to buy stocks of companies that are closely linked to these markets. In this case, they would be companies dedicated to mining these minerals Precious metals. “Although it is not a direct investment in gold, the value of the stocks will be highly correlated and at the same time what happens in the gold mining mines will also have a direct impact on the value,” they explain from Raisin.

This also allows investors to earn dividends. It is the part of social benefit that is distributed among shareholders and is one of the main sources of profitability for companies. Actions. However, on occasion it may happen that the general meeting considers it appropriate not to proceed with the procedure Dividend Department.

Additionally, you can use a exchange traded fund (ETF). Specifically, it is a collective investment instrument, which is traded and settled in the same way as shares in this instrument Stock market. One of its great advantages is diversification. The CNMV states that they offer the opportunity to participate in the development of the main markets without having to invest in each individual security that makes up the markets. Reference indices.

Another option is this derivative products, financial instruments whose value results from the price movement of another asset, called the “underlying asset”. When it comes to derivative products, eToro explains that “an easy way to invest in the commodities market is by using contracts for difference – CFDs.” However, the financial regulator CNMV warns of “possible peculiarities and specific risks that could exist in each individual case”.

Nation World News Desk
Nation World News Desk
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