If you want to protect the value of your money, hedging it can be quite useful for you to do.
As a person who wants to invest their money and have it available for later use, then it is good to be aware of the fact that as long as you keep money, it tends to lose its value over time. Just think about it for a second. How much could a dollar buy you about 10 years ago? And how much can it buy you today? If you answer these questions, you will realise that you are able to buy a lot less now that a few years ago simply because money has depreciated over time and has therefore lost some value. If you want to make the same fate does not happen to your investment money, then you have to seek ways to keep more of your money or at least earn much more than the rate of inflation and you will be fine. With this in mind, below are some of the more important considerations that any investor should consider.
One of the things that you could do is to make sure that you diversify. Diversification not only protects your money but it also allows you to always have streams of incomes no matter what and this is what will grow your wealth over time. Speaking of diversification, there is no better way to diversify these days that to invest in a different countries stock market. The stock markets in different countries do not all do well but they are sometimes very safe from the local countries government which means that they don’t have to be immediately taxed. A good example of an international investment that you can profit from is a London hedge fund.
A London Hedge fund or a global micro hedge fund can allow you to invest away from home so that you are not bogged down by local circumstances that can directly affect your investment. Thera are of course several other investment vehicles that you can use to help you avoid inflation. On one of them is using a REIT or a Real Estate Investment Fund. A REIT, like any other investment in property is very likely to see a rise in value of the property and this means that you automatically make good profits that will easily hedge your investment. The other important thing about REITS is that they are not really affected by fluctuations in currency too much and this means that the value of the investment will not fluctuate too much. The other financial vehicle to consider is the ‘Treasury inflation protected securities’. Commonly known as TIPS these are investments that are specifically created to keep up with inflation. As with other investments, you can purchase TIPS at a much lower value and benefit from their increase in value over time. You should however know that they tend to be stable a lot of the time.