It is no secret that saving money is one of the most critical aspects of adulthood. If nothing, savings are essential to sustain your day-to-day life. Arguably, no one can survive without having a decent amount of money in his bank account. But recently, the trend has changed—as we live in the post-pandemic world, we are also headed towards a looming recession. This ‘financial uncertainty does not only ask for mere savings. Instead, it demands a constant cash flow. Something that can provide you with long-lasting cash flow. Even if you do not actively work, you still have money coming into your bank account.
By investing in a portfolio, you create a continuum of cash flow. Unlike the traditional 9 to 5 job and fixed salary package, you keep making money through your investment portfolio.
But there is still one bothersome factor for investors that needs to be addressed: Inflation. Being an investor does not set you free from the current inflation. Today, we are plunged into a staggering inflation rate. According to the latest updates, the inflation rate has gone up to 11% in 2022. This inflation was never seen in the last 50 years. Even during The Great Depression of 2008, there was no such high inflation rate as it is today.
Like it or not, as an investor, you will be equally bothered by this leaping inflation. You will face uncertainty. This will make you suspect if putting your money into a portfolio is a sane thing to do - given this high inflation rate.
The good news? Well, you can still buy stocks and double up your net worth by beating inflation. Here is how:
Diversify Your Portfolio
First up: If you want to beat the current leaping inflation rate with investment, diversify your portfolio. What does that mean, you ask? Well, it simply means buying multifarious stocks - for both the long and short term. Say, if you lost on one portfolio, you would gain profit on the next one - and vice versa.
The continuum of your diversified portfolios will go on and on. Consequently, you will reach the point where you no longer be bothered by inflation.
Know Your Limitations
Next up: Do not cross your boundaries. If you have a limited budget, stick with short-term portfolios. No matter how hard you try, you can never outsmart the market.
So, better identify your weakness and act accordingly; this way, you will not only succeed in the long-term game but also avoid major losses.
Don’t Pull the Trigger When it is Too Late
Lastly, do not wait for “the perfect” moment. There is no such thing as a perfect moment in investment. Be pristinely clear on your objectives and hit the mark brusquely.
Investors take risks. They are not hundred percent sure of success. Instead, they find a portfolio that interests them and dive into it fearlessly. So, if you find the hook, trust your gut feelings and put your money into it.