Deflation Risks Called Elon Musk And Cathie Wood – Which Investments Could Be Safe If They Were Right?

Deflation Risks Called Elon Musk And Cathie Wood – Which Investments Could Be Safe If They Were Right?

Deflation is a general reduction in the prices of goods and services, usually associated with a contraction in the money supply and credit available in the economy. Money tends to increase in value. It is often associated with periods of negative or stagnant economic growth – such as the Great Depression, the Japanese economy in the 1990s and the early 2000s in the U.S. It usually describes an economy in decline.

Cathy Wood, founder, CEO and CIO Ark Invest, has made news recently for a spending spree of sorts. CNBC explained that her purchases came on the heels of the stock market’s worst selloff of the year. Yahoo Finance used Bloomberg data to explain how much and what was bought.

The story is not so much about the amount and the characteristics of the expenditure; it’s more about time. The big spending came on the same day the Nasdaq-100 index posted its worst one-day decline since March 2020.

Investing can be explained as “buy low, sell high,” and Wood made a big bet that now is the time to buy low. She thinks you should act fast if you want to get the most of your money. Wood only did the walking; she is talking the talk. And she is not alone.

Tesla Inc. CEO Elon Musk he is no stranger to controversy or bold predictions. Earlier this month, he shared his thoughts via Twitter and said that “there is a risk of deflation due to a large increase in the fed rate.” He declared earlier this year that the recession was inevitable, and last year was bleak tweeted “if history is any guide, not much will get past the next recession.”

Chairman Fed Jerome Powell and Governor Fed Christopher Waller both have recently warned that people should expect some pain as interest rates continue to rise. Inflation is higher than expected, and interest rates will remain higher than initially thought a few months ago and are expected to remain there for a longer period. At the upcoming meeting, the Fed is expected to raise its key short-term rate by three quarters of a point for the third time in a row.

If this all sounds like the day of death, it might be. Fed rate hikes haven’t been seen since the pre-2008 crisis. Credit card loan rates are as high as they have been in years, and mortgage rates were at a 14-year high last week.

So, with the world in turmoil and experts like Musk and Wood agreeing that people are in for a rough time — how can you keep your money safe?

One option is to follow Wood’s own strategy, which invests in things like DraftKings Inc., Roku Inc., Zoom Video Communications Inc., Block Inc. and various healthcare and telehealth companies.

Or, you could avoid the stock market altogether. Jeffrey Gundlach — King of Bonds recommends — Treasury bonds. He sees that they look better than they have in over 10 years. The billionaire also shared how to make a portfolio of bonds that could easily deliver 12%.

Finally, you could invest in assets that are inherently limited. When things are scarce, they become even more valuable. In times of turmoil, nothing can be more valuable than land. How can you take advantage of that deal? You could do like Microsoft Corp. founder Bill Gates and invest in farmland. Likes real estate investment trusts (REITs). Farmland Partners Inc. and Gladstone Land Corp. attracting Also attractive are crowdfunded options like AcreTrader, which allow fractional ownership and offer great returns.

But land is not the same as farming. You can also clear the land of the property that is leased on it. Consider this nugget from Houses came CEO Ryan Frazierwho said that real estate investing in deflationary periods has produced “overwhelming returns for investors over time.”

Arrived Homes launched in 2021, becoming the first platform to provide SEC-qualified rental property investments to the market through fractional ownership. The company has given support Inc founder Jeff Bezos during two rounds of financing and has already fractionated more than 160 single-family homes with a total value of over $60 million.
Real estate is an option that has historically achieved good gains. Even during turbulent times, the housing market can be lucrative for patient investors. Investors can even use platforms like Homecoming to buy equity shares of rental properties for as little as $100, but enjoy the same long-term gains enjoyed by billionaires. Grant Cordone and Donald Brann to be receiving.

Photo: Courtesy of MoneyConf on flickr and Ark Investment

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