How To Grow Your Money During Inflation.
Some years back, I saw a pair of my favorite sneakers in a store, I went in, saw the price tag, then went home to start saving up for it. When I had saved up the amount needed, I went back to the store and found that the price of the sneakers had doubled – in just six months! I was so pained. This experience taught me a few lessons about saving and inflation.
I learned that inflation would continue to erode my saving if the amount I need to save to attain my goals does not keep up with inflation. Secondly, I realised that my money in a bank account (or under my mattress!) provides zero protection from inflation. Lastly, I learned the hard way that investing is a must if I want to protect my money against inflation and continue to afford the lifestyle of my dreams.
Everything is rising with the heat.
Inflation is on the rise, and every Nigerian is currently feeling the heat, literally – with the worsened power cuts and rise in fuel price. The National Bureau of Statistics recently released the consumer price index report which showed that has inflation increased to 15.7% in February from where it was the same month last year.
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Can investing protect your money against Inflation?
When it comes to growing your wealth and keeping up with inflation in Nigeria, investing is a must. Inflation saps the buying power of cash over time. As a result, if you do not invest in a worthy instrument, the value of your monthly savings from salaries will diminish each day.
How to invest to beat inflation
The best strategy to position your portfolio to beat inflation is to invest in businesses that tend to benefit from rising prices, such as commodities, emerging markets, and cyclical stocks. Investing in these kinds of businesses during times of higher inflation has proven to be a lucrative strategy that can earn you good profit and balance out the weight of inflation on your finances.
Invest in Commodity Stock
Investing in commodities can provide you with diversification, a hedge against inflation, and lots of positive returns. You can invest in commodities through stock markets by buying shares of listed companies on Nigerian Exchange Limited (NGX) like Okomu Oil Palm, Nestle, Presco Plc, Total Nigeria Plc, Transcorp, Seplat, etc which produce commodities. Investing in Exchange-traded funds (ETFs) like ABSA New Gold on NGX and various indexes of commodity producers packaged as ETFs are also good commodity investments that you can benefit from during inflation.
Ready to start investing?
Well, I intend to keep up with my baby girl lifestyle -and more importantly, I have resolved not to let inflation stop me. If you’re with me on this, then it’s time for you to start with your research on investing. I will recommend that you subscribe to the Parthian Securities Newsletter to learn more about the Nigerian Stock market and receive vital investing tips right in your inbox.
If you have questions about getting started, you can contact the folks at Parthian Securities via info@parthiansecuritiesng.com..