The inflation situation is potentially risky if you do not choose the right investment channel. Still, it is also an opportunity for potential and market-savvy investors to make a breakthrough. So let’s learn the best investment channel through the following article.
1. Inflation covers the economy in 2022
Since the beginning of 2022, with tensions related to the war in Ukraine, the world economy, which the Covid-19 pandemic has seriously damaged, has “wobbled”, causing supply chain disruptions.
Typically in the US, inflation had skyrocketed since the beginning of 2021, when the country’s economy began to recover strongly from the pandemic. US inflation rates in March and April 2022 were 8.5% and 8.3%, respectively, both record highs in more than 40 years. In Russia, the inflation rate in April also increased to 17.62%% (compared to 9.2% in February). In Vietnam, although the authorities are stepping up measures to prevent inflation and price storms, the economy is still under heavy pressure from inflation.
In particular, the price of gasoline at the end of May broke a record of more than 30,000 VND/litre, causing all other commodities to announce price increases in May, causing inflation concerns to haunt the economy. According to experts, most fields of livestock, fishing, construction and retail are greatly affected by the rapid and continuous increase in petrol prices.
According to economists, inflation erodes the profits earned on savings, whether cash or fixed-rate savings like bonds. These benefit those who invest in assets or stocks with higher returns and, of course, higher risks. In particular, investing in assets, specifically gold and real estate, is still chosen by many investors to “choose to deposit gold”.
2. The best investment channel in the inflation period – Real estate investment
With inflation rising, you can feel it affecting your daily life as gas, groceries, and more prices go up. These inflated consumer costs can take a toll on your wallet and cause you to re-evaluate any major purchases you’ve planned to ensure they’re still worth it.
If you’re considering buying a home this year, you’re probably wondering if you should continue down that path or if it makes more sense to wait. While the answer depends on your situation, here’s how homeownership can help you combat the rising costs that come with inflation.
1. Homeownership helps you stabilize one of the most significant monthly expenses
With inflation soaring, prices rise across the board, even for housing. Both rents and house prices tend to increase. So, how can you protect yourself from rising costs as a buyer? The answer lies in home ownership.
Buying a home allows you to stabilize your most considerable monthly expense: housing costs. When you have a fixed-rate mortgage on your home, you’ll lock in monthly payments for the life of the loan, typically between 5 and 10 years.
So even if other prices rise, your housing payment will be a fixed amount that can help keep your budget in check. On the other hand, if you rent, you won’t have the same benefits and won’t be protected from rising housing costs.
2. Invest in an asset that appreciates more than inflation
While rising home prices and higher mortgage rates mean buying a home today will cost more money than it did a few months ago, you still have a chance to make a profit in the long run. That’s because, during periods of inflation, you invest in an asset whose value stays the same or increases. In addition, the average annual price increase has consistently outperformed the average inflation rate in recent years. So, home ownership is a significant barrier to the impact of rising inflation.
What does that mean for you? Today, experts forecast that house prices will only go up as supply and demand remain out of balance. Once you buy a home, any home price appreciation will increase your equity and net worth. You can rest assured that the investment to buy a home in this period will bring profits. If you are ready and able, you should purchase today before the price increases.
Considering buying a home this year, you should act soon, even if inflation picks up. That way, you can stabilize your monthly housing costs and invest in a property with upside potential. So if you’re ready to start, sign up here and contact us at (+84) 948 230 033 or email: customer@gethomebase.com. The Homebase team will get back to you and provide more details as soon as possible.