Inflation is rising out of control, interest rates are climbing in an effort to combat higher prices, and there’s a general sense that a recession is just around the corner. It’s a difficult situation for investors to be in, as opportunities to make money seem to shrink, and the opportunity cost of keeping it in cash keeps growing with inflation.
That doesn’t mean it’s impossible to make money right now, but it does mean that investors need to think outside the box and try different strategies to keep up. These investment moves can help you preserve your wealth even during tough economic times.
1. Don’t Give Up on Growth
Whenever there’s a recession or economic uncertainty, stock market volatility becomes a problem for investors. Price fluctuations are wide, and there’s no such thing as a safe bet anymore. Stock market volatility is currently having a major impact on markets, but this can also be an opportunity for investors looking for long-term growth.
This is your opportunity to buy quality stocks at a discount. Picking up stocks when prices are below average will set you up for future growth, especially with industry leaders that always have high or steady values.
2. Invest in Gold Bullion
Gold is a defensive asset of choice for investors trying to weather a difficult and unpredictable market. Getting into gold is a bit different from other investments, especially if you prefer the confidence and security that comes with owning physical gold bullion. However, that doesn’t mean that it’s difficult.
If you want to invest in gold coins and bars, gold bullion dealers are usually the best place to find them. You can usually buy them either right at the store or online.
Gold bullion is an easy commodity to invest in, and it has a number of attributes that make it a good counterpoint to stocks and bonds. It’s also widely used as a long-term inflation hedge. Gold helps provide protection during market turbulence, and it’s a good way to move out of riskier, growth-focused assets.
3. Take Advantage of Rising Interest Rates
Higher interest rates may be driving up your monthly costs if you have a variable mortgage rate, but it’s also changed the performance of interest-generating assets. After decades of languishing in a low-interest-rate world, the returns from bonds are beginning to change.
That said, bond yields are still lagging behind inflation, more so now than even in the past. But bonds do not generally put your principal at risk, and investing in bonds can be a way of controlling your losses.
4. Pay Down Debt
When it’s hard to find high-growth assets, another great financial strategy is to pay down debt. As a general rule, if you can invest at a higher rate than the interest you pay on debt, it makes more sense to put extra income toward investments rather than debt payments.
That calculation changes when high returns evaporate, and it can be much healthier for your overall finances if you direct any leftover income toward paying down lingering debts rather than investing in assets that may lose money in the short term.