Inflation is a basic tenet of any economy. That dollar in your pocket might not buy you a lot now, but fifty years ago, it could buy a lot. Moreover, while inflation is usually a slow process, some things can trigger a significant rise, like an upswing in the stock market or exponentially increased spending. While rapid inflation can spell trouble – higher gas prices and more expensive groceries – a little inflation can be a good thing – higher wages and more investment opportunities, especially in commodities trading and the real estate market. Here are five tips to help you profit from inflation.
- Invest in gold. If you asked a seasoned investor whether or not investing in precious metals is actually investing, he or she will tell you it isn’t. However, investing in precious metals can be an amazing way to take advantage of inflation – whether the inflation is moderate or exponential. Gold, especially, never depreciates and as money becomes worth more over time, so will the worth of your gold. You can think of gold as the safest bet there is. In thirty or so years, your gold stock could be worth three times, or more, than you initially put into it.
- Put your money in foreign currencies. Each country has their fluctuations when it comes to the national currency. Against the US dollar, however, foreign currencies could become worth twice as much, or more, in the future. So, putting your money into foreign currencies could yield amazing returns, especially if the forecast for the exchange rate of that currency is good. When it comes to the dollar, the mighty greenback isn’t worth as much as it used to be, which can be a boon to those investing in inflation.
- Invest in antiques. Antiques can appreciate in value, especially if the antique is rare or has a growing demand. More than that, though, when it comes to inflation, your antiques could be worth much more money in ten to twenty years down the line. A piece of antique furniture you bought yesterday for a $100 could be worth $10,000 in a decade or two. When it comes to antiques, look for historical collectables, like stamps and toys, which always fare well at auctions and antique road shows.
- Put your money in penny stocks. Professional investors, like Timothy Sykes, have put only a couple thousand dollars into penny stocks and have made millions in returns. This amazing return on your investment is due to the relatively safe nature of penny stocks and the fact that you don’t need to put down a lot of money – they are called penny stocks after all.
- Invest in energy. Energy and electricity stocks will only rise as the population gets bigger and bigger. With every person born on planet earth, there is a new demand for energy. This can be hugely advantageous for individuals looking to profit from inflation. Because there isn’t enough supply for all the demand, prices for energy will sky rocket. Those who get on the ground level now can make out like bandits later.