The beginning of the year always lands with new challenges, and this was no exception: Argentina welcomed 2024, ranking as the country with the highest rate of inflation of the world. With a Consumer Price Index (CPI) of 211.4%, it reached Lebanon and Venezuela and became the only country with a figure higher than 200%. Faced with this scenario, the question that occupies the minds of Argentines is how to protect your income and savingsand the decision to invest emerges as a solid alternative to ensure long-term economic stability.
For those who want to start an investment plan this year, the first step is to be clear about your financial objectives and your risk tolerance. It is important to formulate a strategic and well-informed approach to improving the profitability of savings, and the following four points should be considered:
1- National and international markets
Complementing domestic investments with investments in historically stable markets is one way to protect investments against fluctuations. Among the advantages of directing investments to foreign markets are exposure to stronger currencies, a more competitive and business-friendly environment, as well as protection against economic crises that could accelerate the devaluation of the peso.
Despite the initial investment considered high, the profitability rates in the European and American markets, for example, exceed the profits observed in Argentina due to the return in dollars and euros. On average, the profitability of an individual investor in the US is between 8.4% and 9.6% per year.
2- Financial education
Having a solid understanding of financial principles is essential. This includes not only knowing different asset classes, but also understanding basic economic concepts such as supply and demand, inflation, interest rates, and other factors that influence financial markets.
In addition, it is important to know your investment profile by evaluating your investment objectives. More conservative investors can bet on fixed income assets to avoid risks. Those who have a moderate profile can divide their investments between fixed and variable income, and those who seek greater profits, despite assuming more risks, tend to bet on more volatile investments. To do this, it is necessary to understand and evaluate the risk associated with each asset.
3- Diversification
Spreading investments across different assets also remains an effective strategy to reduce risks. Each asset class has different characteristics in terms of performance, volatility, and purpose, so knowing these differences will help you create a balanced investment strategy.
This means not concentrating all resources on a single type of application to offset any losses in one investment with gains in others. For example, stocks, bonds, real estate and other instruments can be part of a diversified portfolio. Using online platforms can also offer convenience and access to a wider range of investment options for beginners.
4- Investment in real estate
Adding property to your investment portfolio is also one of the safest bets for those investing specifically for income. For example, in the United States, most properties promoted on crowdfunding platforms offer an expected annual return of 8% to 10% on rentals, while the average annual dividend yield of the S&P 500 index has not exceeded 3% since the 1980s.
Currently, the real estate market offers multiple types of financing, from specialized brokers to digital platforms that enable and assist the purchase of a property, in the “turnkey” model, in countries such as the United States and Europe. Furthermore, the practice of crowdfunding allows investors to distribute their assets across different properties and, in this way, diversify their portfolio.
For beginner investors, the path to financial success is not linear, but with the right preparation it is possible to obtain a good return. In an ever-evolving financial world, the ability to adapt, stay up-to-date, and seek advice from trusted sources are essential steps to achieving financial goals this year and beyond.
Graduate in Business Administration from the University of San Andrés and master’s degree in Economics from Esaade
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
