We spent a lot of time and effort and thought differently and boldly to make this money that we always believed would provide us with protection, well-being and the future for us and our children, and today, after the successive negative news of inflation from around the world, it affected our money negatively and these havens in themselves became a source of concern for us, and it occupies a large part of our time in how to protect and develop it in these circumstances.
Global inflation is more violent than what happened last time in 1980 and the raising of interest from global central banks, led by the US Federal Reserve, to fight inflation, and this in turn will lead to an increase in the unemployment rate necessarily so that central banks can control inflation, and fears by more than 80% of global financial experts of an economic recession all over the world, led by Jamie Dimon, Chairman and CEO of JPMorgan Chase Bank and Holding Company, which manages assets worth close to 4 trillion dollars.
Inflation means an increase in prices due to the high demand for all products and services. Recession is the most dangerous because it means price stability, but a significant decrease in demand and therefore in manufacturing, which in turn will increase unemployment rates and negatively affect liquid funds.
Hence, we find that liquid funds will be subject to losing their purchasing power due to high inflation rates, and their purchasing power will decrease with the passage of time. Therefore, a solution must be found that protects our liquid funds:
- Some will say stock markets and well-known international companies are the solution.
We will share a detailed chart of the S&P 500 stock which represents the top 500 US companies.
Within one year, Microsoft lost about 33% of its market value, as did Google, as for Tesla, which is loved by everyone, each share lost 44.25% within one year. As for Meta, which represents Facebook, Instagram, and WhatsApp, led by the young Mark Zuckerberg, the loss of its shares reached to 62% within one year, and its owner, Mark, lost half of his fortune (equivalent to $71 billion) in the last year alone.
All this happened in just one year. Can you accept losing a third or half of your money if you want to invest in stocks in just one year?!
- Some say that we have a safe haven, which is gold.
In fact, at first, this idea seems really convincing. It has been known since ancient times that gold is a safe haven in periods of wars, conflicts and instability, but today's problem is a completely different problem, which is global inflation, which is dragging behind it more strength for the US dollar, and it is known that the price of gold is inversely proportional to the US dollar, the higher the value of the dollar, the lower the price of gold, and this is exactly what we got during the past six months, as the chart shows:
The drop in the price of an ounce of gold from about $1,950 to $1,660 during the past six months means a loss equivalent to about 15%, and this is a disaster in itself for investment.
And even those who say that we invest in gold in the long term is sure to win we would like to share the following chart to make it clear that this idea is really not the answer:
Gold prices in late 2011 are higher than the current gold price in 2022 means that long-term investment is not feasible in the last ten years.
- Some little fans of modernity say that digital currencies are the best solution to keep your money from inflation
Despite the great disagreement over the credibility of digital currencies and doubts about their ability to actually prove themselves on the ground without having fixed assets and no clear representative to represent them, they proved their complete failure in confronting inflation and achieved a truly frightening decline, as we will explain below:
A drop in one year for the most prominent digital currencies, Bitcoin, from 57 thousand dollars to below 20 thousand dollars per piece, which means a loss of 66% within one year!!
There is no doubt in this result that the relationship between it and the dollar is an inverse relationship.
So, what is the solution? And how can I preserve my money in these mysterious circumstances in the world?
The right direction in these ambiguous circumstances should focus first on maintaining the value of money without losing basically, and then trying to develop it even in a simple way, and if we think about the safest type of investment, we will immediately find that buying investment properties is the best solution...
Evidence that real estate is the best option to keep money when you want to mortgage property in the bank for a loan, for example, it accepts real estate and does not accept financial stocks or digital currencies.
Also, if you asked for a loan from the bank and you justified the reason by wanting to buy shares in the same bank! You will not get the loan, but if the reason is to buy a property, your application will be processed more favorably.
Today, there is no need to doubt the ability of real estate to keep our money liquid. It is BlackRock, which manages assets worth $21 trillion (more than the US GDP of $20 trillion, more than the combined GDP of European countries of $15 trillion, and more). Several times the gross domestic product of the Arab countries combined, which amounts to 2.7 trillion dollars) focus on buying real estate at discounted prices at the present time due to the pressures caused by inflation on the efficiency of bank loans to buy a property after high interest rates.
If BlackRock is oriented to real estate and it is known that it includes an intelligent algorithmic system for selecting investment (which is used by the US Federal Reserve itself), then this means that real estate today is the best option on the table in light of inflation and possible recession.
Tips for choosing investment properties in the time of inflation:
1- It is known that investing in projects under construction is the most profitable, but in light of inflation and possible stagnation, it is better to go to ready-made or semi-finished projects to ensure the completion of the project soon.
2- Choosing the location of the property correctly, regardless of its area, and focusing primarily on being a site for rent and most importantly, reselling later.
3- Stop prejudging that the price of any real estate has actually reached its peak. Study supply and demand with the help of a reliable real estate advisor and then conclude correctly.
There are real estates after their value increased by 100%. The investors thought it was the top, but with time it has now reached a 300% increase and the future is still waiting for it.
4- Buying an investment property at this time is essential to preserve your money. Do not leave Istanbul before choosing the property that you think is suitable for investment and do not postpone.
5- Consult a professional broker who not only has knowledge of real estate projects, but also has accurate and useful economic information for you in your investment, which will help you discover the future of the property you have chosen.
