The global financial market is in a bit of a quandary right now. Investors have felt the brunt of this downturn as their portfolios have taken massive hits.

Right now, it seems like there’s no safe haven. The increase in consumer prices for February 2022 was 7.9 percent compared to 2021 - the highest inflation level in 40 years.

Ideally, most investors have turned to alternative assets like oil and gold whenever there has been a downturn. In recent times, cryptocurrencies have also become more of a stable source of growth when the traditional economy has taken a hit. However, even these assets have witnessed a massive fall.

Over the past week, almost $1 trillion has been wiped off the crypto markets alone. Looking at the stock market and other asset classes, it’s quite easy to see why investors are running scared.

However, the best of investors understand that downturns present a massive opportunity. The regular saying is that the best investors know when the market is on a downturn and quickly buy more units of assets where they already have exposure. However, while buying the dip is a good strategy, it is even better when you can beat the downturn while still protecting yourself.

Go for high-value cryptos

Cryptocurrencies have proven to be a great store of value and medium of hedging against inflation. However, we would recommend going for more established names like Bitcoin and Ether.

These are assets that lead the market, and they will be the first to see gains when things flip bullish. Even more, they have specific use cases. So, you can rest assured that they will remain functional even if inflation hits.

While meme coins and other mimic assets tend to see gains too, stability should be your focus. So, look for high-value digital assets alone and invest in those.

Invest in evergreen sectors

The entire point of inflation is for the prices of things to be so high that spending now becomes a problem. Essentially, most people tend to reduce the amount of money they spend on “frivolites” during inflation and instead focus on necessities. So, those necessities are where you want to keep your money.

Warren Buffett, one of the most popular investors in the current generation, has always counseled investing in products and companies that can easily increase prices during inflation. These are products and companies that would have to raise their prices but won’t be afraid of becoming “too expensive” because they are necessities. If you’re an investor, this is one of the best ways to be safe.

Short-duration fixed income can be your friend

Imagine you’re concerned about how much inflation will hit some of your assets. If the situation gets dire, one tried and tested strategy is always to move away from long-term bonds and allocate your capital to short-term treasuries or bonds.

Also, keep in mind that the fixed income you earn on many of these long-term bonds will eventually lose value in the future because inflation would have already affected the value of your currency. So, hedging with short-term fixed income can help you to benefit from the hiked interest rates while still protecting your upside.

Real estate for the win

One of the most constant things to happen during periods of inflation is that home prices always increase. Property valuations skyrocket, and landlords would also have a bigger incentive to hike rents as the market shifts to a more defensive mode.

All of these will lead to increased rental income for property owners. So, when you get landed property, you’re doing quite a good job of hedging your bets and setting yourself up to benefit from the surging rental prices.

If you’re not in the mood to deal with the stress of managing a direct real estate investment, you could instead use Real Estate Investment Trusts (REITs). These are trusts that take money from investors and allocate them to real estate properties. REITs work out the management schedule and handle everything related to maintaining the property. Your only job is to invest and earn your returns when they come.

Invest in yourself

Inflation also presents an opportunity for you to make strategic investments in yourself. By doing this, you give yourself the opportunity to increase your worth and purchasing power over time. With companies feeling the effects of layoffs, only high-value talent will be retained. If you’re such a talent, then you don’t have much to worry about.

Consider learning a new skill or advancing your resume by building on what you already know. At the end of the day, the truth is that knowledge gained can never be lost.

Buying the dip is still a great strategy

With everything that’s been said, it is worth noting that you can still ever go wrong when you buy the dip. Different assets have seen massive drops in their values recently, and it will definitely do you better to set aside some funds to invest in the dip now and prepare for future gains.

We’ve seen a perfect example with cryptocurrencies. Coin prices took massive dives over the past few days, and many investors are running scared. The Crypto Fear And Greed Index - a metric that measures investor sentiment across the market - has also been constantly low over the past few weeks.

If you’re an opportunistic investor, you’d know that this is a great time to buy the crypto dip. And, it also helps because you can easily palace funds in high-growth, high-potential coins and rest assured of gains coming back to you in the future.

Other asset classes are just like crypto. They've been down over the past few weeks, and there are signs that this downturn could remain. Buying into high-value assets right now will set you up for gains in the future, allowing you to free up more cash.

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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