There is no feast in the world that will not be dispersed, and the same is true of the economy, and there will be gloom after prosperity.
Halfway through 2024, insiders are already smelling inflation.
What exactly is inflation? How will it change our lives? In the face of inflation, how can we prepare in advance?
Inflation is coming, what is the impact?
Inflation refers to an economic phenomenon in which the overall price level of goods and services continues to rise across the board for a period of time, resulting in a decrease in the purchasing power of money.
It is like an invisible hand, sucking the money out of the people's pockets little by little. When the prices of goods and services generally rise, the same money can only buy fewer goods, and life becomes more constrained.
The dangers of inflation are multifaceted and pervasive.
It not only affects the lives of individuals, but also endangers the entire national economy.
For ordinary people, inflation is undoubtedly a "nightmare".
When prices skyrocket and wages stand still, the quality of life inevitably declines. The Financial Times once reported that in the era of high inflation, an elderly European pension was depreciated due to inflation, and he ended up picking up garbage to get by.
This embarrassing story vividly illustrates the "harm" of inflation to the disadvantaged in society.
For the national economy, inflation is also a major "hidden danger".
Economist Friedman once said, "Inflation is like a drug that feels good at first, but it gets worse and worse over time."
A high inflation rate can lead to a depreciation of the national currency, a decrease in international competitiveness, and even a full-blown recession. In the 70s of the last century, the United States experienced a decade-long period of "stagflation", with economic growth stagnating, unemployment and inflation rates remaining high, and people's lives in trouble.
In the face of inflation, money cannot be idle.
Idle money is like ice cream in the refrigerator that "melts" over time. Warren Buffett, a famous investor, once said: "Hiding money under a mattress is one of the stupidest practices."
So, how should we fight inflation and protect our "purse strings"? According to an insider, from 2024 onwards, it is particularly important to hold three things in hand! What are the three things? Let's wait and see.
Insider's tip: Hold these 3 things in your hands from 2024
According to insiders, from 2024 onwards, it will be crucial to hold gold, real estate and technology stocks. These three things are like "body armor" and can effectively resist the "attack" of inflation.
Let's start with gold. Gold has been regarded as a "safe haven" since ancient times, and it can maintain and increase its value in the face of inflation. Historically, gold has always shone when the economy is in turmoil and the currency is depreciating.
In the 70s of the last century, severe inflation broke out in the United States, prices skyrocketed, and the dollar depreciated sharply. Between 1971 and 1980, the price of gold soared from $35 to $850 an ounce, a 24-fold increase! It can be seen that gold is a "sharp weapon" to fight inflation.
Look at the property again. The house is a "reassuring pill" and a "ballast stone" to resist inflation.
A bigwig in the investment industry once quipped: "It is better to speculate in stocks than in real estate, and speculation in real estate is profitable and sheltery." Not only does the property retain its value, but it also brings stable rental income, which is equivalent to "insuring" your money.
Taking Shanghai as an example, according to the Shanghai Municipal Bureau of Statistics, from 1998 to 2018, the average annual growth rate of housing prices in Shanghai reached 13.1%, far exceeding the inflation level in the same period. It can be seen that when inflation hits, the house is your most loyal "bodyguard".
Finally, let's talk about technology stocks. Science and technology is the "locomotive" that leads economic development, and technology companies represent the future and have broad room for growth.
Investing in technology stocks is a "train to the future". Warren Buffett once said, "If you don't want to hold a stock for 10 years, don't think about holding it for 10 minutes." Tech giant Amazon is a prime example of this.
If you had invested $10,000 in Amazon stock in 2009 and held it for now, the investment is now worth more than $300,000, a 30-fold increase in 10 years! Even in the face of inflation, tech stocks can protect your wealth.
To fight inflation, these three "weapons" alone are not enough, but also need the "cheats" taught by insiders. How can you maximize these three assets and protect your wealth?
How to allocate these three assets?
With the three "magic weapons" of gold, real estate and technology stocks, coupled with the "cheats" of insiders, you will definitely be invincible in inflation. This "cheat" is: rational allocation of asset ratio, regular adjustment of asset portfolio, pay attention to policy and market trends.
Asset allocation is a matter of course, just like cooking, the proportion of ingredients determines the taste of the dish.
The famous investor Rey Dalio is the "originator of asset allocation", and his "all-weather investment strategy" is a classic.
This strategy advocates dividing assets into four categories: "up", "inflation", "down" and "tightening", and allocating them flexibly according to the economic cycle. In his words, "Don't put your eggs in one basket." For ordinary investors, in gold, real estate, and technology stocks, they can allocate 20%-50% according to their own risk appetite.
But the market is changing rapidly, and today's "darling" may become "outcast" tomorrow.
As a result, the portfolio needs to be adjusted on a regular basis, just as a car needs regular maintenance. Warren Buffett also said, "If you don't want to hold a stock for a long time, don't hold it." His longtime partner Charlie Munger also said, "If you're successful in the stock market, the most important thing is not to get carried away."
Regularly adjust the asset portfolio, which can "cut leeks" in time and avoid market risks. Every six months or every year, you should revisit your investments and make adjustments to market changes.
In addition, it is necessary to keep an eye on policy and market trends, just as old farmers should pay attention to weather changes.
Policies are like "weather vanes", and markets are like "barometers".
The tightening of monetary policy and the guidance of fiscal policy will have a significant impact on asset prices. In 2015, China's stock market experienced a major bull run, but then tighter regulations led to a sharp downturn.
In 2020, in the face of the impact of the new crown epidemic, countries have introduced easing policies, and the global stock market has rebounded strongly. Therefore, investors should become "policy control" and "market access", keep an eye on policy trends, and grasp the pulse of the market.
The insider also revealed an "ultimate trick": never stop learning.
Warren Buffett is 90 years old this year, but he still reads a lot of books and newspapers every day to learn new knowledge. He once said, "The most important quality of investment is the thirst for knowledge."
For ordinary investors, learning more financial knowledge and understanding the characteristics of various assets can prevent them from panicking and calmly deal with inflation.
Inflation, an "uninvited guest", will always come unexpectedly. It silently erodes our wallets and makes life difficult. But fortunately, we are not without solutions. Gold, real estate, and technology stocks are like "guardian saints" that protect our wealth.
Insiders also taught us the "cheats" on how to rationally allocate assets, adjust portfolios regularly, and keep an eye on the policy market. These valuable experiences are worthy of serious study by each of us.
In the face of inflation, we don't need to panic, let alone let it go.
As long as you prepare in advance and arm yourself with knowledge, you can calmly deal with it and turn "crisis" into "opportunity".
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