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4 Ways to Hedge Against Inflation

Inflation is at a 40 year high and trending upwards.

Our clients are looking for methods to mitigate the devaluation of their hard earned money. Here are some of our favorite options to hedge against this inflationary cycle.

1. Stocks

While some find success in riding the tides of random companies, the best advice we’ve uncovered when investing in the stock market is to target companies that you utilize and believe will be around in 50+ years. Think Coca Cola, Nike, Tesla etc. Investing within this framework will help you have a portfolio built for longevity and is a great hedge against inflation. Consider the following:

  • Dividend Stocks: This asset class is a great way to invest money but still retain some cash flow. Consider popular REITS. If you can, reinvest your dividends.

  • Stocks in Companies you like: For some, that means Nike, because you can’t take off your Air Force Ones, and for others, Space X because you believe the future is in Space. Think about the things you use everyday and the corresponding stock.

  • Stocks being Ignored by Wall Street: Data Service company Multex found that 65% of stocks trading on the U.S. exchange have no analyst coverage from Wall Street. So, if you have some down time to invest in researching the stock market, then find small-midsize companies with small market caps, and seek out those stocks undervalued and uncovered by Wall Street. Utilizing the ‘neglected firm effect’ can prove to be very lucrative as undiscovered gems can actually have a higher average return rate.

2. Crypto

Crypto is one of the most volatile and confusing investments. If anyone you know disagrees and says they perfectly understand crypto, ask them to thoroughly explain the blockchain and then mine a coin for you. Listed are some great cryptos to invest in.

  • Ethereum: Market Cap $327 Billion. Even though Bitcoin has a higher market cap, since Ethereum has applications like smart-contracts and NFT’s, we think it can eventually overtake Bitcoin. Due to its functionality we place it first.

  • Bitcoin: Market Cap $730 Billion, the original crypto that shocked the world, this coin is tried and true, or as tried and true as crypto can really get.

  • Tether: Market Cap $78 Billion, this coin is much less volatile than the other crypto currencies because it is backed by the U.S dollar. Interestingly enough it is hosted on the Ethereum blockchain. As a Stablecoin it’s considered to be a safer bet, although current inflation will test this theory.

  • Polkadot: Market Cap $19 Billion. What is interesting about DOT is its ability to operate across different blockchain platforms. It uses much less energy than other blockchains, and is proving to grow exponentially over time.

3. Real Estate

  • Multi-Family - Commercial Real Estate: This asset class is great for rental income and you get the additional benefit of building equity in the property. Best of all, you can finance this asset. The downside is tenants can be difficult to manage unless you have a good management team in place.

  • Airbnb: If you live in a beautiful area, or a city this is a fantastic way to generate income. Airbnb side hustles have taken TIKTOK by storm, as people are being transparent about the income it generates them.

In this current financial climate your business simply cannot afford to sit on your AR. Our goal at Witkes Law is to improve our clients bottom line. For our creditor clients we offer a suite of accounts receivable services. Hand your AR over to the pros. Reach out to see how we can help you.

The above should not be construed as financial advice and is merely provided for informational purposes.

Bitcoin Price Prediction Model Stock-to-flow (S2F) by Dutch analyst PlanB


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