Out of all the investment opportunities available today, the safest investments protect one’s capital from inflation and other fund-depleting factors.
There are many investment choices available today for investors. New, popular investment opportunities include information technology, alternative energy sources, or biotechnology, And the more traditional investments in stock markets and indices remain sound strategies. Investors are inundated with opportunities that each promise to be a better and safer place to invest one’s funds and will reward investors with higher returns.
While risk-free investments may offer more theoretical safety, with the trade-off being a lower rate of return, many investors still want the security of a safe investment. But simply investing in these offers long-term may not be the wisest choice. Record inflation has made the headlines around the world and threatened even these ‘safe’ investments.
Record Inflation and Slowdown
The global inflation rate is expected to reach as high as 8.8% by the end of 2022, from 4.7% in 2021. This means that a lot of previously considered ‘safe’ investments will be consumed by inflation if they don’t offer returns that are significantly higher than the inflation rate. It’s expected to decline to 6.5% in 2023, but for many small investors, it may be too late, and the damage may already be done.
The world is undergoing a global economic slowdown caused mainly by a slower-than-expected recovery from the pandemic, coupled with higher oil and energy prices spurred by Russia’s invasion of Ukraine. The high inflation rate and economic slowdown may lead to a financial depression in the coming year, so investments that aren’t carefully managed could become vulnerable.
Staying the Course
Many financial analysts recommend staying the course, as inflation is expected to decline in 2023, and economic activity is likely to increase as more countries and institutions recover from the pandemic. But staying the course won’t help you recover the investment capital you’ve already lost.
What’s needed is to have a safe investment choice that monitors and protects your capital. Investment plans that offer reduced risk and balance that by also offering a higher return than traditional ‘safe’ investments are the wise choices for investment when inflation rates are high.
A traditional fixed-income saving plan will yield 3.5% per annum. With inflation on average at 2.5% per annum currently, these fixed-income savings plans may not meet your investment goals over the long term.
Invest with Investors Trust
Investors Trust offers a savings plan based on the performance of the S&P 500 index, one of the most inflation-resilient indexes in the world. The S&P 500 Index tracks the performance of the top American companies. You’ll be investing in an index based on the performance of solid, world-leading companies like Microsoft, Coca-Cola, Apple, Johnson & Johnson, and Berkshire Hathaway.
Investors Trust also has other investment plans based on your individual financial needs and goals. To learn more, contact Investors Trust today.