Investments That Could Help to Hedge Inflation in 2022

Inflation is something that most consumers and investors have not worried about for decades. Since the early 1990s, governments in countries such as the United Kingdom and the United States have been able to control the rate of currency devaluation and price increase, keeping it at around 2%.

It’s a far cry from the mid-20th century when we saw inflation hitting double digits in some parts of the world. Even levels of 7-8% in the late 1980s are still a long way from those moderate levels seen for most of the 21st century.

But this is starting to change. After being less than 1% in 2020, prices increased by 6.8% in the United States in 2021.

For almost everyone, this speed of devaluation is a concern because it means that the money we have in our bank accounts is declining and our purchasing power is dwindling. For most people, this means that there has never been a more important time to find ways to hedge against the inflationary threat.

In 2022, here are some solutions you might want to consider.

gold

Gold has been a popular choice for investors for centuries. Its rarity and practical use in jewelry and manufacturing makes it a valuable commodity. Since there is only a limited amount of gold available on Earth, it increases in value instead of decreasing like fiat currencies.

The price of gold has risen over the past three years, settling at around $1,750 an ounce, 40% more than it was at the beginning of 2019. If inflation continues at current levels, the price of gold will Gold is likely to rise further.

There are several ways to buy gold, but unlike stocks, you don’t earn any dividend income on any of them. This means that gold often underperforms against investing in the stock market because you do not have the ability to earn compound interest.

iGaming

The iGaming industry is a continental tale. In Europe, companies have been offering all kinds of online betting for more than two decades. On the other side of the Atlantic, these brands have only been in business for a few years now, which leaves plenty of room for growth.

Since 2018, US states have been given the freedom to set their own rules around sports betting. It started with just a few, with New Jersey, Nevada and Pennsylvania leading the way, but many soon followed suit. This expansion is expected to help the industry expand at a compound annual growth rate (CAGR) of 17.34% between now and 2026.

Like other countries bring legal online gamblingCompetition rages among iGaming companies all striving to build a significant market share, resulting in great free bets and promotions for new customers. To help consumers take advantage of this competition, sites like OLBG have put together resources to help gamblers find the best deals for them.

For investors, double-digit growth is an attractive opportunity to hedge against inflation, provided they can find companies that appear able to translate some market expansion into increased market capitalization.

chip manufacturers

If you’ve tried to buy pretty much any type of electrical product in the past year or so, you’ve probably noticed that prices have gone up and there are fewer options to choose from. This is due to a global shortage of microchips caused by several factors, including increased demand, supply chain disruption, and lack of foundries.

It is unlikely that this deficiency will disappear any time soon. As a result, the few companies that produce silicon microchips have reported impressive financial results. For example, Taiwan Semiconductor Manufacturing Company has seen its share price increase by 265% in the past five years and is currently trading at nearly double what it did in January 2020.

you will be Investment of $44 billion It is increasing its capacity this year as it expects to grow its sales by 15-20% in the next twelve months, five percentage points higher than previous estimates.

Its competitors also have similar rosy forecasts, so it could be a good opportunity to hedge against inflation in 2022.

Cryptocurrency

Cryptocurrencies have been very fashionable among investors in the past two years or so, with some choosing to buy tokens like Bitcoin and Ethereum, while others opting for “meme coins” like Dogecoin and Floki.

Some were drawn to the hype surrounding rapidly rising prices and hopes of finding the next big trend. Others have tried a more conservative approach.

Bitcoin and Ethereum share many traits with gold, which is why some investors want to use it as a hedge against inflation. While cryptocurrencies are not overly useful for manufacturing, the Ethereum blockchain has other purposes. However, the main quality that attracts investors is the limited number of these tokens that can be mined, which makes them just as scarce as gold and other precious metals.

The problem with cryptocurrencies is that they are more volatile and therefore come with additional risks that may offset any inflation hedge.

These are some of the more popular options among investors for holding value of capital, although there are many alternatives available for those willing to take the time to investigate. If you are concerned about inflation and are not sure what is best for you, you should speak to an independent financial advisor before making any decision.

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