Pivot away from tech stocks: how to combat inflation risks

posted by Chris Valentine

When it comes to investing, there is no such thing as a standard investment rule book. Investors have their approaches and each one has its methodology. For many years, tech stocks were about as close to a sure thing for investing. Investors who put their money into them reaped healthy rewards.

But that is no longer the case. Tech stocks are no longer the safe investment they once were. There are several reasons for this, but chief among them is the fact that inflation is starting to rear its ugly head again. This is terrible news for tech stocks because they tend to be very sensitive to inflationary pressures. With inflation risks on the rise, tech stocks may not be as safe of an investment as they once were.

Few ways to combat inflation risks and protect your portfolio 

Diversify your investments

While tech stocks may have been a hot commodity in recent years, they could be at risk for inflation. Diversifying your investments can help you combat inflation and protect your money. For example, you can diversify your investments into other stocks, such as those of companies producing consumer goods. This will help to protect your wealth from the effects of inflation. Investing in a variety of sectors will help mitigate risk. You can check to know more about smart investment moves

Consider investing in commodities

Commodities have historically been one of the best-performing asset classes during periods of inflation. This is because they are physical goods used in everyday life, so their demand usually goes up when prices increase. When inflation is high, commodities tend to do well. Many people turn to investing in commodities as a way to combat inflation. However, make sure you do your research before investing in any commodity.

Take advantage of tax breaks

If your retirement portfolio is taking a hit from inflation, consider using it to offset other taxable income. Tax breaks can help you keep more of your money, which can then be used to offset the effects of inflation. Also, you can invest in something that will appreciate over time and help you keep up with the rising cost of living. And to track such investments, you can use a stock tracker app that allows for a comprehensive understanding of your investments in stocks and commodities.

Consider government bonds

 Inflation is a major concern for any investor. In such situations, Government bonds are often considered a safe investment because the government backs them. Also, government bonds tend to have lower interest rates than tech stocks. Therefore, government bonds may be a better option for investors looking to combat inflation

Invest in gold

Gold has always been seen as a haven during times of economic uncertainty. Moreover, in recent years, there has been a growing trend of people investing in gold as a way to combat inflation. It is because gold is a physical asset that is not subject to the same fluctuations as stocks, bonds, and other financial assets. Unlike stocks, it is also a tangible asset that cannot be created or destroyed. Gold is also a relatively safe investment to combat inflation, as it has maintained its value over time.

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