Last Thursday, the latest consumer price index data revealed that the inflation rate in the US, much to no one’s surprise, has risen again, this time to 7.5%, which is a 40-year-high not expected to happen at least up until early 2023.
MarketWatch’s Jeffrey Bartash believes that this data signals that the pressure on consumer prices won’t be letting up any time soon, and with investors on their toes about what to do with their money now that the market is in chaos, experts had to weigh in with some quick tips on how to invest and save through this high-inflation period.
Look into ETFs and real estate
Naturally, the first tip is to invest your money, as investments are one of the best ways to circumvent inflation, especially now that the S&P 500 is on the rise, with its average return rate sitting at around 10%.
With this in mind, even if your company’s got a retirement account, you should maybe consider opening a second brokerage account where you’ll sink your mid to long-term savings while also taking advantage of compounding.
To pull this off, you’ll need a diverse portfolio, which implies a notable amount of stocks and bonds, but also real estate and possibly even crypto, if you’re ready to jump into those dangerous waters at this time.
On the topic of real estate, experts like Grace Yung, from Midtown Financial Group, believe that real estate and commodities shouldn’t be set aside as an option, as they offer formidable returns each year, and with a good, profitable piece of land, you’re likely to beat inflation by a longshot.
Commodities like gas, oil, and natural gas have all spiked in popularity last year as the market struggled to stay afloat, prompting year-to-date returns for those smart enough to invest in these assets early.
Optimize your investment account, and never act on emotion
You should also look out for any taxing inefficiencies in your brokerage account, as you could easily be saving large amounts of money by optimizing your investments.
The best way to combat inflation is to design tax-advantaged investment accounts, which also means that you’ll be paying less for every single dollar your investments earn you.
Roth IRA accounts are looking the most optimal right now, and maxing yours out could be the best step to combat these rising inflation rates all across the board.
Never keep cash on your person, unless you really need it, because that excess money could instead be put into an investment and let grow instead of practically making you work for it every day of the week.
The market may be looking sub-optimal at the moment, but with a big enough time frame, your investment is guaranteed to bounce back and bring you massive returns, especially given that those returns are astronomically higher than those for savings accounts, so sometimes it might just be smart to NOT play it safe.
And in the end, no matter how bad the situation may seem, remember that you tried your best, and if you did, there’s no reason to cry over spilled milk.
Inflation is at a record high, and we’re all in the same situation, but if you make responsible decisions and cut costs where they need to be cut, you’ll find yourself at least a step ahead of everyone else.