As we navigate an uncertain economic climate, it’s more important than ever to protect your investments. While there are no guarantees in the stock market, there are some steps you can take to help safeguard your portfolio. Inflation and recession can have a major impact on the value of your money and the investments instruments you hold, so it’s important to be aware of these risks. Here are three ways to help protect your money from inflation and a recession.
3 ways to protect your money from inflation.
Weatherproof your money and portfolio with this 3 tips:
- 1. Diversify investments across different asset classes. This will help protect your money if one sector takes a hit.
- 2. Consider investing in inflation-protected securities to keep up with rising cost of living, and
- 3. Rollover retirement accounts to an Insurance based indexed account to avoid market loss.
Diversify your investments
From all the ways to protect your money from inflation and mitigate risk of investments; diversification is king. You have heard the old adage of not putting the eggs in only one basket, because if the basket falls all the eggs will be broken. Well, in investing, one of the best strategies to avoid losing all investments is diversification. Diversifying investments across different asset classes will mitigate risk because if one asset class underperforms, your overall portfolio will still have the chance to grow. And as we have seen throughout history, when one asset class grows it often outperforms others.
Invest a portion of your money in Treasurey Inflation-Protected Securities
There may not be better ways to protect your money from inflation than with a product that have been created specifically to do just that. If you’re looking for a way to safeguard your money from rising cost of living, then investing in Treasury Inflation-Protected Securities (TIPS) is a great way to do that. TIPS are bonds issued by the U.S. government that are designed to keep pace with inflation. The principal of a TIPS bond increases with inflation, and the interest payments also increase with inflation. You can buy TIPS thru a broker or directly from the U.S. Treasury Department.
Protect your retirement from market loss thru Insurance Based Indexed Accounts.
Unlike TIPS, Insurance Based Indexed Accounts offer the opportunity to participate in the market growth while protecting you from market losses. These Policies can be purchased as an stand alone account or be combined with life insurance. Combining with life insurance allows you to contribute small amounts while protecting your family in case of death or chronic illness, however a stand alone Indexed account will require you higher contributions but have no cost of insurance. These Insurance products can be obtained thru independent licensed insurance agent or brokers. Not all insured indexed offer the same benefits and growth potential, so speak to a Licensed Financial Professional to learn more.
There are various other ways to protect your money from inflation and recession, and the one’s share in this article are not the only one’s but may be the most unique. It is important to diversify investments, and to not put all the eggs in one basket. Inflation can erode the value of investments, so it is important to invest in assets that will hold their value or increase in value over time. If a recession hits, it is important to have cash on hand to cover expenses and to avoid selling investments at a loss.
At Prosperity Leaders we train and develop independent licensed financial professionals to expand FREE financial education in our community. To get connected with a Professional that can help you with strategies and wayst to protect your money from inflation, email us at firstname.lastname@example.org