Inflation means that the amount of paper money issued exceeds the amount needed in market circulation. In the case of inflation, we can’t be adrift. It is possible to run faster and more stably than others by finding a new path. So how do we manage finance under inflation?
How to manage finance under inflation
1. Keep adequate family/personal cash, maintain the family/personal quality of life.
2. Take 20% of surplus to invest capital preservation products.
3. Take 30% of surplus to invest products of relatively stable profit.
4. Buy a certain number of insurance-type products for family/individual person or property.
5. Prepare (savings) about 20% of balance to invest in medium and long-term financial products when the market continues to fall and investment opportunities appear.
6. When the inflation situation improves, investors can sell stocks or funds, but do not to follow blindly when you don’t have enough information.
How to allocate assets under inflation
Asset allocation is the first step of our investment and financial management. It usually allocates assets combined with low-risk and low-return, high-risk and high-return investments, here shows how to allocate assets under inflation.
1. Diversify your portfolio, invest in different products, don’t put all your eggs in one basket.
2. Adjust your portfolio accordingly, you can adjust your asset allocation according to the market condition and personal situation.
3. You can manage your risk and focus on trends and information of investment field. Simply speaking, we need to know when the time is to get out of the investment/industry.