Money and money management is a sensitive topic for most people. It is precisely for this reason that many are prone to prejudices and traditional ways of thinking regarding the preservation of values. Although the majority of people like to see their wealth in "living money" or, for example, in real estate, most often, and especially now, these are not the best solutions for storing value.
At a time when most central banks in the world are "printing" fresh money and "pumping" it into the system in order to provide the necessary liquidity due to the crisis caused by the corona virus, it is expected that a larger amount of money will lead to a drop in its relative value.
This is the first time that this is the case with almost all major currencies in the world. This is one of the main reasons why, despite the economic crisis and the slowdown in the development of economies in the world, the shares of most of the world's largest companies have recorded enormous growth over the past year.
It's not just stocks - investors are panicking "running away" from money to anything more resistant to the coming inflation and a significantly higher amount of banknotes in circulation.
Recently, in addition to stocks, gold (as a traditional instrument of protection against inflation) has been leading the way, as well as cryptocurrencies, which have emerged as a potential solution and serious competition to gold.
What are the reasons to invest in safer instruments?
Precisely because of the mentioned situation, the company Limit Prime Securities, which specializes in global capital markets, lists 5 reasons why investors turn all their money into these three safer saving and investing instruments:
- Depreciation of money. Due to the huge "pumping" of almost all important currencies in the world, the total amount of money will be significantly increased, while there will be no cover for it, due to the slow economic growth. The result of all this is a drastic drop in the value of money in relation to other assets.
- Inflation. Inflation is a consequence of printing money that does not follow economic development. Gold and cryptocurrencies currently stand out as the frontrunners in the race for inflation protection.
- Budget deficit. Most of the economies in the world are expecting a large budget deficit, which will have to be covered by freshly "pumped" money, which will further increase the total amount of banknotes.
- Dividends. By buying the shares of large and stable companies, in addition to protection against the fall in the value of money, you also get the right to dividend payments, that is, every year you get a "piece of the pie" from the profits that the company distributes to share owners.
- More profitable than investing in real estate. Due to the expected inflation, banks will not be so inclined to issue long-term loans, which will hit the real estate market the most, which mostly relies on long-term loans. For this reason, converting money into real estate is not advisable at this time.
These are just some of the reasons why you should invest in safer instruments, but you should also consider others.
The recession hasn't officially started yet, although it's expected, so it's still not too late to convert your money into safer savings or investment instruments.
Many large investors argue against keeping cash and advocate investing in some of the financial instruments, such as: gold, actions or cryptocurrencies. Which instrument you choose depends on your expectations, and we remind you of Ray Dalio and the famous saying "Cash is Trash".
How to preserve the value of your money?
The great thing about financial instruments is that they are relatively easy to invest in.
If you want to save value by investing in the instrument of your choice, now you can do it in a very simple and efficient way - by opening a trading account with a licensed investment company Limit Prime Securities.
This renowned company is regulated by the Capital Market Commission of Montenegro and through its platform offers you direct access to world stock markets and trading in the most attractive financial instruments.
If you want to start trading, you can register here, and for more information you can call +382 67 242 086 and one of the employees of Limit Prime Securities will meet you.
Email address: info@limitprime.com
Website: http://www.limitprime.com/me
Phone number: +382 67 242 086
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