Elon Musk shares the secret of investing in times of high inflation
When it comes to how to hedge against inflation, Elon Musk and Warren Buffett have suggested similar strategies.
Recently, in a share on Twitter, billionaire Elon Musk - CEO of electric car company Tesla gave advice to investors in the current period of high inflation: "It is better to own owning physical things like a house or shares in companies that you think make good products” rather than keeping your money in cash.
In the second half of the sharing line, billionaire Elon Musk has investment advice similar to the advice that billionaire Buffett - CEO of Berkshire Hathaway - has given in the past. Back in 2009, at the end of the Great Recession, Buffett said at Berkshire Hathaway's annual shareholder meeting that one of the best ways to protect assets against inflation was to own a piece of "a great business”.
That's because no matter what happens to the value of the dollar, the business's products can still be sold as market demand remains.
Inflation has continuously increased in recent years. US consumer prices rose 7.9% year-on-year, the highest increase in 40 years. Gasoline prices rose the most among commodity groups, followed by hotels, rental cars and furniture.
The higher the inflation rate, the faster cash depreciates. On the other hand, investments typically grow over time. That's why during times of high inflation, both Musk and Buffett recommend investing in companies that own stocks that are likely to remain stable.
Financial advisor Delano Saporu, CEO of New York-based New Street Advisors Group, told CNBC: "If you're using too much cash, you're doing yourself a disservice." .
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