What are the Most Trusted Financial Assets to Invest in During this Difficult Time?
In turbulent economic periods such as this, it can be hard to know what to do with your money. Inflation can rip into savings with the high-interest accounts nowhere near the level of inflation, but it is also hard to know what to invest in with financial markets suffering. As a result of this situation, many investors do not know what to do with their money and want to find safe assets for investment that will protect their money against inflation and offer better returns that savings accounts.
How the Financial Market is Risky
Investing in financial markets will always bring risk, but it is particularly risky right now with so much instability. The broad stock market fell almost 24% between January and mid-June and it has been a long period of instability as a result of numerous external factors. These factors include the pandemic, Brexit, the war in Ukraine, the energy crisis and the cost-of-living crisis.
As a result of this, many investors are put off by investing in the stock market. While it is certainly a difficult period, it is also important to recognise that investing should be viewed as a long-term journey and there will always be ups and downs. As long as you do not need the money soon (such as approaching retirement), dips in the market can actually be beneficial if you are able to stomach it. The key is to determine what your level of risk is so that you can invest without panicking when there is a drop in the market.
If you do not want to take too much risk and/or you need access to the money within the next few years, there are a few asset classes that you should be looking at to invest in. It is often said that gold is the best hedge against inflation as demand soars during turbulent economic periods. Gold is also a great way to diversify your portfolio. Bonds are also a good asset class to invest in as they tend to be less volatile than stocks and shares, so many find that combining both provides a healthy balance. As always, investing in property is a smart financial option, but keep in mind that it is expensive and not a liquid asset, so it can be hard to get your hands on the money quickly.
It can be hard to know what to do with your money during times like this, especially as everyone has different attitudes to risk and different financial needs and goals. Therefore, you might find it best to speak with wealth managers that will be able to devise the best investment portfolio based on your appetitive to risk and financial goals.
Hopefully, this post will be useful for anyone wondering what to invest in during the current economic situation and alleviate concerns.