Blog INVESTITIONEN

Investments during inflation – how to act to benefit your finances?

Real estate – the most popular form of investment

Undertaking investments during inflation may seem challenging. Current economic conditions are characterized by significant dynamism, and the future value of our savings is uncertain. We ponder, ‚What to invest in during inflation?‘ recognizing that saving alone is an unreliable recipe for achieving financial stability. Is there a proven way to multiply capital? The market offers so many investment products that choosing the most suitable one can be dizzying during investment decision-making. Adding to the complexity is the so-called paradox of choice, suggesting that the more options available, the greater the stress associated with committing to one of them. Additionally, there’s decisional dissonance that arises after making a choice, manifesting as the recurring question, ‚Did I make the right decision?‘. However, the effects of these phenomena can be minimized by opting for time-tested investment options that have contributed to the multiplication of capital for millions of investors – among them, real estate investments remain the undisputed leader.

Investments during inflation – because saving alone is not enough

According to the Assay Index 2022 report, which examines attitudes towards investing and saving, almost half of the respondents expressed indifference towards the topic of investing. This is a clear signal that the issue of securing a financial future is still in a distant galaxy, although we are slowly realizing that saving alone is not enough to build a stable financial future. Our approach to finances is gradually leaning towards stepping beyond the boundaries of saving, but fear still holds us back. What are we afraid of? The turbulent economic environment plays a crucial role – only 17% of respondents stated that we are currently in a good moment to invest. Unfortunately, hoarding accumulated funds in various savings ’socks‘ is not a remedy in this matter – doing so will not increase the value of our savings or maintain it at the same level. It is up to you to steer the fate of your finances – a good investment decision can change your life by 180 degrees. If you are wondering where to invest the surplus of your capital, one of the best options remains real estate investments – especially those that meet all the criteria foreshadowing financial success in the long run.

Why invest in real estate?

Over the years, foreign investments have been gaining increasing popularity, with their presence in less saturated markets that are just warming up on the global stage. We mentioned key factors influencing the fate of real estate investments in our post Real Estate Investment in 2023 (cofresihills.com). Why does real estate investment continue to be a favorite option among many of us?

  • Impact on investment value – investors deciding to allocate capital with gold or cryptocurrencies do not have a significant impact on the value of their investment. The value of these options depends on the current market situation, which is variable and unpredictable. This is particularly evident in the case of cryptocurrencies – their value can plummet to zero within a short period. Many investors also overlook the educational aspect, making investment decisions at the wrong times and often losing the earnings of a lifetime. If you are not well-versed in the rules governing the financial market and do not have enough time to monitor your portfolio and update your knowledge, such investments may do more harm than good. However, this scenario does not apply to real estate, as its value is not as dependent on changes in the financial market as the alternatives mentioned above. You might think at this point: ‚Okay, but investing in real estate comes with different types of responsibilities that also rest on my shoulders.‘ What about property management and maintenance? Not to mention the situation when these processes take place remotely… Investments in gold or other precious metals wouldn’t require such actions from you. That’s true – but only in the case if you operate independently, without collaboration with an experienced business partner. The Cofresi Hills Residence team will take care of comprehensive property management for you, and your only concern will be choosing the date of your owner’s stay – for as long as you wish!  
  • Inflation protection – investing in real estate has long been a proven method to safeguard capital against inflation. This is due to the long-term value appreciation and the specific nature of this investment option, which includes the previously mentioned lack of direct connection to changes in the financial market. It is worth mentioning the possibility of adjusting rental fees associated with real estate – as the cost of living increases due to inflation, property owners can adjust the rent for tenants, which is one of the advantages of this investment form.
  • Benefits for investors – the more welcoming a country is towards investors, the longer the list becomes. One of the undisputed leaders in this regard is the Dominican Republic, creating a friendly and secure environment towards which an increasing number of foreign investors are turning. The Dominican government consistently expands the catalog of investment incentives, including the possibility of obtaining permanent residency or a variety of tax benefits. We will provide more details about the legal and economic environment of the Dominican Republic in one of the upcoming posts.

 

If you are interested in the offer from Cofresi Hills Residence, contact our team today. Now or never – the change for the better, shining in Dominican colors, is just around the corner!

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