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Lead
According to a recent report, China's savings rate is rising as inflation is rising, and one elderly person said: "The cost of living is getting higher and higher, and now the family's savings are not enough, so we all like to take cash and store it in case we need it." "This old man holds cash and stores it, but there is a certain risk, that is, it may depreciate the cash in his hand due to inflation, which will eventually lead to a decrease in his property.
So why does holding a lot of cash lead to a decrease in wealth?
First, low interest rates make bank deposits unable to effectively curb the depreciation of cash.
Some people may say, is it that the interest rate of banks is too low now, resulting in very little interest income on deposits, so they choose to hold a large amount of cash?
At present, the interest rate of banks is low, generally speaking, the interest rate of one-year deposits is about 1.5%, and some taxes and fees are deducted, and the interest that can actually be obtained is very small, and it is not even as cost-effective as holding a large amount of cash directly.
Many people choose to hold large amounts of cash in case they need them, but they overlook the risk of holding large amounts of cash.
With the gradual intensification of inflation, the current price is also getting higher year by year, and holding a large amount of cash, there is no way to resist inflation, which will eventually lead to the depreciation of the cash in hand, and eventually lead to the reduction of one's own property.
Why is it said that bank deposits are resistant to inflation, while large amounts of cash are more likely to depreciate?
This starts with interest rates on bank deposits and inflation.
The interest rate on bank deposits is relatively stable, and there is interest income, which is stronger than holding a large amount of cash, and the current inflation rate is not very high, so bank deposits can resist inflation, even if there is a certain depreciation, there will be no serious depreciation of cash.
Bank deposits can effectively curb the depreciation of cash, and holding a large amount of cash cannot resist inflation.
Second, the savings rate is rising, and holding a large amount of cash may lead to depreciation under inflation.
Why is the savings rate getting higher and higher? This has something to do with the current state of the economy.
The current economic situation is not very good, especially in the downturn of the real estate market, which has caused many people to depreciate their assets, so they are cashing out their assets in case of emergency.
On the other hand, due to the downturn in the real estate market, funds cannot flow efficiently, so they are reluctant to invest their assets in the real estate market.
In the stock and bond market, it is also sluggish, which leads to the fact that many people have no investment channels for their funds, so they can only store their funds in case of emergency.
Affected by the epidemic, people's lives have been greatly affected, so the funds in their hands are also limited, so they will save the funds in their hands for emergencies, so the savings rate continues to rise, and the cash in their hands is also increasing. With the gradual improvement of the epidemic, people's lives are gradually returning to normal, so the funds in their hands also have a certain liquidity, so they can gradually invest the funds in their hands to obtain more income.
Third, the investment market is sluggish, making it impossible for assets to flow effectively.
In the case of a downturn in the investment market, assets cannot be effectively flowed, so the risk of holding a large amount of cash is considerable.
On the other hand, due to inflation, the cash in their hands is also gradually depreciating, which eventually leads to the reduction of their assets.
How to effectively invest funds to obtain more returns?
First of all, it is necessary to diversify the investment, and do not invest the funds in your hands in a unified manner, so that once the investment fails, it will lead to the inability to effectively maintain the value of the funds in your hands.
On the one hand, it is necessary to formulate a set of investment strategies suitable for yourself according to your own risk tolerance and investment goals, rather than blindly following the trend or impulsive investment.
On the other hand, the risk of currency depreciation is not only for people who hold a large amount of cash, but other assets may also be affected by inflation, so diversification is an important risk management strategy.
In order to effectively resist inflation, precious metal investment is a good choice, because precious metals will not be affected in the case of inflation, and even have a certain increase in value, so you can invest in precious metals appropriately with the funds in your hands.
On the one hand, although the real estate market is down, the real estate market still has a certain amount of value-added space, so you can also invest in real estate with the funds in your hands, but you must be cautious when investing to avoid investment failure.
On the other hand, although the stock and bond market is sluggish, the stock and bond market also has a certain amount of room for appreciation, so you can also invest the funds in your hands in stocks and bonds to obtain more returns.
epilogue
The stock and bond market is also accompanied by certain risks, so investors must be cautious when investing, and do not invest blindly. When making an investment, you also need to conduct a capital assessment, understand the status of your assets in your hands, and your risk tolerance, which will help you develop a more effective investment plan.