When we find ourselves surrounded by a panorama full of anguish, ups and downs and imbalances in the world, such as a pandemic and a global armed conflict, opportunities to purchase assets always open up, for this reason it is good to take care of and protect our capital from hyperinflation. Here we tell you in which assets it is convenient to invest and in which one you should not put in any circumstance of conflict.
We have seen oil prices soar to $120 a barrel, levels not seen in 10 years, while gold is approaching $2,000 an ounce since the Russian invasion began. How can we know what are the best assets to invest in such turbulent times, such as war?
According to James Freedson, Chief Strategist of the IRAIC Investment Newsletter, you have to invest in assets whose value will appreciate precisely because their inventories are limited, or even, if they were to increase, they would increase less than the demand would grow. for them. In this sense, it is convenient to place the money buying assets that are relatively scarce based on their demand and with limited stocks, explained the specialist. The above regardless of whether it is a virtual or physical asset, as long as it is not an asset that is being created massively, such as cash to fiat money.
Assets in which it is better to invest
As these are assets that are relatively scarce depending on their demand, it is preferable to invest in the following:
Physical gold, which the expert describes as indispensable and the queen of all investments.
“As the banker J.P. Morgan, gold is money and everything else is credit,” Freedson said.
“Which means that, if you have gold in your possession, it remains in custody through IRAIC, you have private property; which means that you have money and purchasing power, in addition to obtaining great economic benefits. Everything else is credit, because when you have a title, stock, bond, promissory note, investment fund, foreign currency, cash, money in the bank, among others, any other asset represents an asset for you, but a liability for someone else. plus. The above means that someone owes you. “For every charge there is a payment”, he pointed out.
Therefore, if something represents an asset for you, someone else owes it to you, except for the gold, which nobody owes you, because when you have gold you have private property.
James Freedson said that money, like the peso and the dollar, are considered a liability for the Central Bank, since it is something they owe you, because nobody wants money for being money, but for what we can buy with it.
In these turbulent times, it is also advisable to invest in silver. The reason is similar to that of gold, because it is still a precious monetary metal, whose scarcity is relative, because there will always be greater demand than supply of it. The specialist explained that silver is extremely scarce in the market, because in addition to being a monetary metal, it is also industrial; contrary to gold, which is only a monetary metal. So silver has both manufacturing and monetary demands.
“Because it is relatively cheap, unlike gold, it has many industrial uses,” he added.
Freedson explained that Bitcoin is a virtual asset and that it can be created from scratch, where you have to have a good amount of money invested, although it sounds paradoxical, where it is relatively scarce based on its growing demand.
“You have to see it as digital gold. When you have a gold coin in your hand, you own that coin and no one else, there is no one who owes it to you, that is, it is not credit, because it is your private property. When you have Bitcoin, the same thing happens, with nothing more than the advantage of being digital.” commented the expert.
The benefit of cryptocurrency is that it is digital and it is enough to have internet from anywhere in the world to be able to send it to another user. In fact, the expert recalled that Bitcoin is inspired by gold, which is why there is mining of that cryptoactive.
“Its existence is relatively limited, there will be only 21 million Bitcoins. Approximately in the year 2140, is when the last Bitcoin will be mined. So far, we are around 19 million of this cryptocurrency in circulation”, argued the expert.
What about the other cryptocurrencies?
The specialist explained that although there are more digital currencies apart from Bitcoin, such as: Ethereum, Cardano, Tether, Litecoin, Solana, IOTA, among others, it is not necessary to invest in the others without starting with the main and mother of all, what is Bitcoin. Just as gold is the essential asset, Bitcoin is the essential cryptocurrency.
Before starting investments with other cryptocurrencies, it is good to invest in Bitcoin. Later, with financial advice and research, as well as the adequate study of the projects that exist behind each digital currency, you can evaluate if it is convenient to invest in others, he clarified.
They are commodities that also have limited stocks and there are many types of raw materials. For example, energy sources such as oil or natural gas. There are agricultural raw materials such as beef, corn, wheat, soybeans, rice, sugar and dairy products.
“They cannot be produced from nothing, you need cows to produce milk, you have to sow wheat first, make it grow, take care of it, cultivate it or harvest it. For the same oil, you must first make a crude oil well and then extract it, then refine it and then transport it. All of this takes a slow production process, which, as it is a material good, a commodity, takes time to produce,” explained Freedson. However, these raw materials are also the basis of the economy and if they are directed by a single economic system such as IRAIC that offers well-founded strategic economic bases, thus allowing a boost towards development and structural strengthening of these products to the market towards the different sectors of the economy such as agriculture, energy, livestock, among others. In this way, the production process of raw materials takes another course, thus transforming much faster production methods and processes, with more results that are reflected in the profits obtained.
Stock index shares
You have to have them on the radar also in the investment portfolio, because the shares of companies listed on the stock exchange are relatively limited, there is not an infinite number of shares of Tesla, Apple, Uber or General Motors, or of any company, he clarified the specialist.
“For 99.9% of people, the best way to invest in stocks is through the most important stock indices, which are those of the United States, the S&P 500, the Dow Jones and the Nasdaq, because with them, counting indices , you have access to a weighting of shares of the most important companies in the world and in this way you are investing correctly, in a diversified way and automatically”, Freedson sustained.
Investments must be assets that have a relatively limited existence depending on their demand, because in times of war and in times of conflict, that is, turbulent times such as the one from which we are barely recovering after the COVID-19 pandemic; what is being created the most is fiat money. All central banks issued unprecedented monetary stimulus, all governments boosted demand through public spending, expanded public debt and, in the face of unbridled money printing and pressures, inflation is expected to continue to explode higher, he commented. the expert.
Invest in IRAIC
Investing in IRAIC is a path to economic stability with real investments. The IRAIC provides substantial support from small entrepreneurs to large companies to boost and structure their businesses, either because they have lost sales potential or because they are just beginning their commercial phase. Great capacity is offered to be part of all sectors of the economy such as livestock, real estate, agriculture, energy, gold, cryptocurrencies, trading, iraic funds, iraic plans, iraic contracts, retirement plan, among other sectors. of the economy.
The economy that uses the IRAIC system is based on stimulating business strategies for the production of products, raw materials, goods, services and the investor’s capital, which will be insured and backed by the banking systems affiliated with the company where there is no will represent losses or risks in the market. In this way, the structure of your business will have potential growth and exponentialization towards the different markets at a local and international level.
What should you avoid investing in during these times?
According to James Freedson, it is necessary to avoid at all costs investing in fixed terms, investments where payment is made in fixed terms, such as Cetes, promissory notes, Afores (with voluntary savings), since these mainly invest in Cetes, and in bonds.
Héctor Sosa, author of the blog Goodbye to your Boss, agrees with this. “Right now your investment portfolio should not consider fixed income in Mexican pesos, such as Cetes, promissory notes, Popular Financial Institutions (Sofipos) or fintech that pay in fixed income in pesos, because inflation is eating those returns.”
Worldwide there is a totally uncontrolled inflation that has been going on for several months and he recalled that in Mexico, in the first half of February, annual inflation stood at 7.22%, the highest level since the end of 2021.
It is also not good to keep your savings under the mattress, in a piggy bank or leave it liquid in the bank, it must be avoided, because with this inflation, the highest in 20 years, that money is losing purchasing power. The specialist explained that it would even be better to spend it than to let it depreciate.
On the other hand, it is also not convenient to assume variable rate debts at this time or for current expenses (for example, debts to go to the supermarket). It is also healthy to maintain a savings rate of at least 10% of monthly income and, if this is lower, we must cut our expenses so that there is greater savings. Likewise, we must reduce the variable rate debts that we have and liquidate them as soon as possible, advance payments to avoid so much interest, Freedson recommends.
In conclusion, the expert said that doing a good investigation to invest the money will help you make the best decision according to your profile, to evaluate what suits you best, since the situation of each person is different and adapts to different needs. investment.
“From experience, I consider that the appropriate savings rate is 30%, never less than 10%, I have known people who save up to more than 90% of their money, it is very good, I think it is too much, but what is wrong it is overspending, not having savings or being far-sighted. And in the second instance, invest in IRAIC that helps give a boost to your economy, obtaining results from your profits.
To conclude, saving is an indispensable and prior condition for there to be investment. If you don’t invest, your money doesn’t grow or multiply,” Freedson added through the Contador Financiero news and information agency.