Money loses value over time due to inflation. While the numbers in your bank account may grow from interest, the purchasing power declines. Keeping all your cash in a savings account can burn a hole in your pocket. This article reveals 7 assets that can preserve wealth across generations. Read on to learn how to invest in things that hold value.
Gold, Silver, and Platinum: The Timeless Luster of Precious Metals
Gold, silver, and platinum are known as “God’s money.” For centuries, civilizations have prized these precious metals for their enduring worth. Ancient Egyptians adorned their royalty in gold. Conquistadors voyaged across oceans hunting for silver. Gold even backed currencies, demonstrating its trusted value.
These metals endure when paper money loses its purchasing power. While governments can print endless amounts of paper currency, the supply of precious metals is finite. During uncertain times, people flock to these safe haven assets.
You have options to invest in precious metals. Purchase physical coins, bars, or jewelry. Or diversify into funds tracking precious metal prices. Some invest in mining companies digging up these resources. New digital platforms also let you own gold and silver bullion online.
Industrial Commodities: The Raw Materials Powering Our World
Industrial commodities are the basic materials used to manufacture almost everything in our modern economy. Metals like copper and oil are essential across industries. The rise and fall of civilizations have depended upon access to these raw materials.
The Industrial Revolution that transformed society was fueled by iron and coal. Today, economic growth still depends upon key commodities. When production revs up, demand for these inputs climbs, potentially pushing up prices.
Commodities can balance investment risk. Their prices often rise when stocks decline. Ways to invest include futures contracts, commodity funds, and mining company stocks. Or use digital platforms to own commodities virtually.
Sovereign Guarantees: When Governments Promise Security
A sovereign guarantee is a pledge made by a government. If a business or infrastructure project can’t repay loans, the government steps in to cover the debts. This promise attracts investors to important sectors or developments considered too risky for purely private capital.
Governments utilize sovereign guarantees to catalyze investments, like building a new highway system. Knowing the government has your back reduces risk. These assurances are especially sought during financial instability.
One common way to benefit from sovereign guarantees is investing in government bonds. When you loan money to the state, they promise repayment plus interest. Some countries also offer sovereign-backed opportunities to attract foreign capital.
Safe Haven Currencies: Sheltering Funds When Storms Hit
When the economy turns turbulent, investors take cover in safe haven currencies. Due to stable economies and strong financial systems, currencies like the Swiss franc and Japanese yen have reputations as reliable stores of value. During crises, these currencies often hold or gain strength while others plummet.
Safe haven currencies offer security since they are less prone to suddenly lose value. Their high liquidity means they can quickly be converted to cash or other assets. They also counterbalance riskier investments in a portfolio.
To invest in safe haven currencies, utilize the foreign exchange market for direct buying and selling. Some funds also specialize in stable international currencies.
Real Estate and Land: Concrete Assets with Enduring Value
Land and property have tangibly stored and grown wealth for millennia. When you own real estate, you possess a physical piece of the world likely to increase in value over time.
Urbanization and population growth have made certain locations extremely valuable, like land in New York City or London. But even agricultural acreage or commercial real estate can appreciate substantially.
Investing in real estate comes with advantages. The finite supply combined with rising demand enhances value. Rental income provides steady cash flow. Real estate also enjoys tax perks in many countries.
While directly buying property has responsibilities, real estate investment trusts (REITs) offer exposure without the hassle. Real estate crowdfunding lets you pool resources.
Value Stocks and Mutual Funds: Uncovering Hidden Investment Potential
Beyond buzzworthy growth stocks lies another approach: value investing. This involves buying shares of sturdy businesses believed to be underpriced compared to their true value. Mutual funds also pool capital from many investors into diverse stocks, bonds, or assets.
Value investors research companies with strong financials but stock prices not reflecting real worth. This disconnect might stem from market overreactions or temporary issues. Mutual funds allow investing in stocks without picking individual companies.
The first step in value investing is identifying promising yet undervalued stocks. Many mutual funds and index funds offer simple ways to invest in value stocks or the broader market.
Art, Rare Coins, and Collectibles: Finding Value in Scarcity and Beauty
Collectibles are prized for their scarcity, aesthetic appeal, craftsmanship, and cultural significance. Ranging from fine art to antiques, rare coins, vintage items, or sports memorabilia, collectibles carry history and meaning beyond just financial value.
From ancient times to European aristocracy, collecting unique artifacts has spanned cultures. Disposable incomes and leisure time allowed hobbies like coin collecting to emerge. As collectibles become more rare over decades, their value often soars.
Collectibles provide portfolio diversification since their worth doesn’t track traditional markets. The joy of collecting also offers intrinsic rewards. In a digital world, the authenticity of vintage items carries special appeal.
- Precious metals like gold and silver endure as stores of value during inflationary times when currency declines.
- Industrial commodities like oil and metals are essential economic inputs that can hedge investment risks.
- Sovereign guarantees from governments provide security for investors in uncertain times or places.
- Land and real estate have tangibly held wealth across civilizations due to limited supply and increasing demand.
- Value stocks and mutual funds aim to uncover hidden investment potential in sturdy but underpriced companies.
- Collectibles like fine art offer scarcity value and portfolio diversification beyond just financial returns.
Protecting wealth from inflation erosion requires assets that maintain purchasing power over time. The key is investing in things that provide enduring, tangible value unaffected by monetary devaluation. Precious metals, commodities, land, underpriced stocks, and rare collectibles have preserved and grown wealth for generations. Include these real assets for stability through all economic seasons.