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Inflation Is Worrying Investors - So Where Are They Putting Their Money

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by valuewalk
Monday, Feb 21, 2022 - 22:02

Inflation has been the topic for most of 2022 so far, as consumers and investors are battling against the raging current of rising inflation that’s currently at its highest in more than 40 years.

Everything from food to cars houses, to even the world-famous Big Mac has all fallen victim to the ramped rise of goods - and it’s becoming a worrying sign for not just consumers but investors as well.

There’s no ignoring the fact that rising costs will only continue well into 2022. While not many might be able to brace for the rapid high costs of nearly everything, it’s time to start thinking and working differently with your money.

Perhaps it’s not as easy as it might seem on paper, but investing during inflation can be a tricky road to navigate, especially if you don’t have a lot of disposable cash lying around. On the other hand, many small-time or novice investors are worried that they’ll make the wrong decision, end up with a bad investment, and lose money.

Investing can mean something different for everyone. Some invest for their retirement, others invest in an opportunity for their education. An unplanned emergency such as an accident or lawsuit can become a pricey situation if you’re not well-prepared. In this case, you can pay everything yourself, or make use of insurers or finance companies to assist you financially. Daniel Digiaimo, CEO of litigation finance firm Baker Street Funding commented: “Inflation rapidly increases the cost of everyday goods. Because of this many plaintiffs in personal injury cases look to litigation financing companies to make an investment into their case. This provides the plaintiff with extra income to help with the rising costs that come with inflation and focus on their recovery and the successful settlement of their case.”

We’ve dived to see where investors are putting their money during these challenging, and seemingly risky economic times. If you’re new to the investing game, it’s good to always do your research, and consider the various risks which come with it.

Here’s where you should be putting your investments in an effort to hedge inflation.

Cryptocurrencies

Bitcoin, Ethereum, Doge and all the other coins or tokens you’ve already heard quite a lot of in the last few years have become one of the more striking and popular places investors are looking to put their cash.

By now, you’ll be well aware of the high stakes that come accompanied by investing in crypto, and that even some of the most well-taught crypto investors can still be victim to losing all their earnings.

Yes, crypto is a high-risk market, but it can also come with high rewards. Investors and avid crypto enthusiasts all use a strategy, whereby they study and monitor the market before making any last-minute decisions.

However, crypto is for investors who are looking to play around and lose money. It takes serious dedication and time to finally be able to call yourself a “crypto investor” or before you will be able to make money. There are so many interchangeable services and products that come with the crypto industry, and you must know how these work before you start.

Solar Energy and Sustainability

Many Silicon Valley solar companies have recently seen their stocks perform quite well on the market, as investors are starting to see more value in what solar and sustainable startups and corporations can offer.

From Enphase Energy, JinkoSolar, or FirstSolar Inc. these are but a few of the many different solar energy companies that are currently trending on the market. In the last few days, if you’ve been keeping an eye on the market, you would’ve noticed how stocks have been climbing, even as investors shrug with the upcoming federal meeting.

All the while these companies can offer you great returns on your investments, as demand for green-based products and services will only increase in the coming years, it takes time before you’ll be able to see your investment actually grow.

Different reasons contribute to slow investment, but the more important of it is, is that these companies are all relatively young, or new to the market. Companies don’t all perform the same on the market, and every industry-related market will most likely trend depending on consumer habits.

One should also consider that some of these companies may also be feeling the heat of rising inflation, and with labor shortages at an all-time high, and supply chain issues grappling companies - investors might end up seeing their returns, and dividends become smaller over the next few months.

Construction and Transportation

These two go hand-in-hand, to some degree, but various companies in the construction, transportation, and energy sector are currently offering high-yielding dividend stocks, at low prices.

This is perfect for any type of investor looking to get their hands on an investment opportunity that will create returns for their investment. It’s no doubt so many young investors are looking towards these major corporations as hedge investments for inflation.

Without getting too excited, we need to talk about the risks that come accompanied by these industries. For starters, supply chain issues. As already mentioned, supply chain issues are currently one of the biggest reasons why so many companies and businesses had to hike up their prices, above the current inflation rate as well.

The more strain supply chain issues are placed on these companies, the trickier it will become to navigate how they can offer investors a hedging investment opportunity.

There is a sense of quality and authenticity when investing in a company or business that works within this industry, but times have been changing and a lot of people are reconsidering how these companies can become sustainable, and modernize their practices in the coming years while still keeping up with consumer demands.

The Takeaway

Investing is no easy task, and in a time where inflation is at its highest, it changes the entire investing strategy altogether. It is however good to know that some companies are still offering a hedging opportunity for investors, but these are far and wide in between.

Seeking out the right investment will easily help you grow your portfolio, and as you learn, you’ll be able to spot lucrative opportunities a lot easier. Overall, it’s good to always do your homework before investing, and make sure you know where you’re putting your money. Investing takes time, and you need to be prepared for any sudden changes in the market.

Contributor posts published on Zero Hedge do not necessarily represent the views and opinions of Zero Hedge, and are not selected, edited or screened by Zero Hedge editors.
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