What To Invest In During Times Of Inflation

04
April

Good economic times can lead to the prices of good rising over time. Bad economic times can lead to printing too much currency and making a given currency weak. Both will lead to inflation and reduce the value of the currency that you have or make the items you want too expensive to have. What are some good investment options during a time of economic inflation?

Commodities

A really good idea during times of inflation is to invest in commodities. Prices increasing isn’t good when it comes to going to the pump, but you can make a nice profit off of the rising price of a barrel of oil. Commodities are great to invest in because you have a tangible asset that relies more on supply and demand as opposed to confidence in a financial system that is based on nothing more than that confidence.

Foreign Currency

The dollar is the benchmark currency around the world. However, this does not mean that the dollar is the only currency that you can invest in. When inflation occurs, the value of the dollar goes down relative to other currencies. This is because the market has too many dollars and causes the value of each dollar to drop. Therefore, you should invest in the Euro or another major foreign currency and ride out the instability in the dollar until it becomes stronger again.

Real Estate

It wouldn’t be a good idea to buy real estate at the moment, but when inflation hits the housing market it can be a good idea. Home prices can rise rather quickly when the real estate market is booming. Renting out properties can be effective, too as rental prices go up during times of inflation. Making improvements to your home can raise the value of your home even more. Good economic times can also result in banks lowering lending standards and putting more buyers in the market that can afford higher prices.

Times of inflation can mean financial uncertainty and a lower value for your dollar. However, there are some ways that your money can be grown when inflation is occurring. The best thing to do is to always look at your options no matter what the market looks like as there are always opportunities out there. If you want the safest bets, however, you should look to these sectors to find the best place for your money.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

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